Core Attributes Pressure Supported (Waterflood and Waterdrive): 35+ prospective oil exploitation Oil locations in pressure supported (low decline) properties. Exploitation Tertiary (ASP): Little Bow ASP tertiary recovery project…
Asset Description Waterflood Properties account for approximately 95% of pre-ASP oil production (3,700 bbl/d); very predictable with low declines of 15 percent (or less) per year. and Waterdrive Inventory of low risk oil…
Zargon Overview (April 16, 2015) Capitalization Toronto Stock Exchange: Symbols: ZAR; ZAR.DB Common Shares Outstanding: 30.27 million (basic) Market Capitalization: 131 million (4.33 per share) (1) Net Debt at Dec. 31, 2014: 113…
Recent Developments 2014 February 19, 2015 Annual Reserves Review Press Release: Year End Proved and Probable Oil Reserves 19.67 million barrels (13.0 year rli), Reserves Proved Developed Producing Oil Reserves 10.05 million…
2015 Corporate Objectives Little Bow Efficiently/effectively operate the Little Bow ASP project; maintain chemical injections ASP and optimize phase 1 production. Optimize phase 2 timing and scope to conserve 2015 capital. Conclude…
Waterflood/drive Well Inventory Drilling Inventory of 35+ net wells. The Q4 2014 conventional oil exploitation drilling program included 3 Williston Basin and 2 Taber wells. Future drilling will be deferred until oil prices…
Long-Life, Low-Decline Oil Volumes Average Annual Decline Rate (%) Zargon Corporate Decline Analysis - Total Oil Production Rate 0 10 20 30 40 50 6,000 Gross W.I. Oil Production Rate ( bbl/day ) 5,000 Zargon 4,000 3,000…
Canadian ASP Projects Alberta Sask. Grande Prairie Mooney 10 Canadian ASP Projects in (Black Pearl) 2011 operation. 2 additional projects have regulatory approval. Edmonton Major operators: Husky, CNRL, Cenovus, Crescent…
Little Bow ASP: Proven Technology EOR in a mature, southern Alberta waterflood Little Bow ASP: Phase 1&2 Development Phased Development Phase 1 ASP injection commenced March 2014 15-18W4 Capital (Non Chemical): Phase 1: 52…
Little Bow ASP Project Milestones Recent Highlights ASP facility, oil battery and field construction complete and online in March 2014 (50 million: construction & startup). July 2014: Revisions to Conventional Enhanced Oil Recovery…
ASP Enhanced Oil Recovery Process Dilute concentrations of chemicals (Alkali, Surfactant and Polymer) in water are injected into an existing oil pool to scrub out oil that waterflooding alone will not recover. a) Water Injection:…
ASP Injection Sequence 1) ASP Injection 2) Polymer Push 3) Terminal Waterflood A blend of Alkali, Surfactant & Polymer displaces mobilized Return to waterflood to Polymer mobilizes trapped oil oil to producing wells complete oil…
Little Bow ASP Project Analog Little Bow Mannville I Taber Mannville B ASP Analog and P Pools (Zargon) Most mature Canadian ASP Project; Husky Operated Same geological setting, oil quality, reservoir size and pre- ASP depletion…
Early ASP Oil Response Varies by Area 200 8 Southeast: 150 7 Chemical Injection: 20% complete Oil (bbl/d) Increased Oil Cut Oil Cut increase: 1 to 3% 100 6 Oil Rate increase: 100 bbl/d 50 5 6 of 7 producers with oil cut…
Phase 1 (Only) Response vs. Forecast Little Bow ASP Oil Production 1800 Revised Zargon Forecast 1600 2015/16 increment = 260 / 970 bbl/d Ultimate: 2.78 million barrels 1400 1200 December 2014 Zargon Forecast 2015/16 increment =…
Phases 1-4 Development Plan 15-19W4 15-18W4 Zargon W.I. W.I. DOIIP* (%) (mmbbl) Phases 1&2 Phases 1 & 2 Area LB I Pool 100 31 LB P Pool 100 8 14-19W4 14-18W4 Phases 3&4 Phases 3 & 4 Area U&W Unit 97 26 G Unit 95 10 G, U&W…
ASP Phase 1 Phases 1 & 2 Project Economics Little Bow ASP: Phases 1&2 Production Full Cycle Go Forward 2500 IRR (%) 17 63 Phases 1&2: PV10 (million) 53 124 12% Recovery (5.2 mmbbl) 2000 F&D (/bbl) (1) 30 18 Phase 1 1500…
ASP Phase 1 Phases 3 & 4 Project Economics ASP Development Forecast - Phases 1-4 Phases 1 - 4 Go Forward Economics 3000 Phases 3 & 4 Phases 1 - 4 Zargon W.I. Production IRR (%) 42 59 2500 Phases 3&4 PV10 (million) 75 199 Phases…
Project Netbacks and Recycle Ratios The Little Bow ASP project provides attractive half cycle returns (even at the current low oil prices), that will provide profitable reinvestment programs throughout the rest of the decade. Future…
2015 Capital Budget Revised Capital Program April 2015 update December 2014 (Prior) ASP Phase 1 Exploitation Capital 5 million 2 million ASP Phase 2 Development Capital nil million 6 million ASP Phase 1 Chemical Costs 12 million 12…
Production Guidance and Cost Targets Production Q1 2015 Oil 3,930 barrels per day (3,900 bbl/d conventional and 30 bbl/d ASP) Guidance Cal. 2015 Oil 3,960 barrels per day (3,700 bbl/d conventional and 260 bbl/d ASP) Q1 2015 Gas…
McDaniel 2014 Yr. End Net Asset Value Waterflood Waterdrive Q1/15 Oil Q1/15 Gas McD. Oil Res. McD. Gas PV10 Asset Value Properties Guidance (bbl/d) Guidance (mmcf/d) (mmbbl) Res. (bcf) (million) Williston Basin 1,850 0.40 7.95 1.23…
McDaniel 2014 Yr. End Net Asset Value NAV Calculation (Dec 31, 2014) Proved & Probable McDaniel Est. (BT DCF 10%) 407 million Undeveloped Land 12 million Deduct Net Working Capital & Bank Debt - 114 million Net Asset Value 305…
Key Takeaways Balance Zargons unique low-decline asset provides stability in this challenging low price period. Sheet Balance sheet will be protected by cost containment initiatives, 2015 capital budget Protected reductions and…
Appendices zargon.ca
Williston Basin Property Summary The Williston Basin assets are characterized by waterflood and waterdrive properties. Significant oil exploitation work remains. Since 2010, these properties have provided 199 million of property…
Williston Basin Activity Summary Ongoing Activities Exploit long life low decline pools Saskatchewan Manitoba with horizontal wells and waterflood enhancements. 2014 Activities Drilled 8 exploitation horizontal wells at Steelman,…
Taber South Property Summary Taber S - Production Contribution by Drilling Program Date (29 hz wells) 1,000 Pre 2008 2008 2009 2010 Q1 2011 Q3 2011 Q4 2012 Q4 2013 Q2 2014 900 800 700 600 Oil Rate (bbl/d) 500 400…
Little Bow (pre-ASP) Property Summary Little Bow Core Area Production 800 700 600 Oil Rate (bbl/d) 500 Zargon Operated Oilwells 400 No Drilling Activity - Well Reactivation/Optimization Projects 300…
Bellshill Lake Property Summary Bellshill Lake property includes a Bellshill Lake waterdrive and Killam Glauconite exploitation property. The Bellshill Lake waterdrive property has been developed with vertical producers and high…
Little Bow Phase 1 & 2 Optimizations ASP Oil Recovery (mbbl) Zargon 2013 Optimized: 6,500 ASP Oil Recovery 1,276 cases run Zargon 2013 Economics: 5,200 Reservoir simulation model McDaniel 2013 Year End: 4,500 developed to…
Alberta Modified EOR Crown Royalty Program Highlights and its Impact on Zargon Announced July 2014 - Alberta conventional oil EOR royalties in line with Alberta oil sands and Saskatchewan conventional oil EOR programs. 5 percent oil…
Estimated Tax Pools Category Dec. 31, 2014 Canadian Exploration Expense 58 million Non Capital Losses 102 million Canadian Development Expense 34 million Canadian Oil & Gas Property Expense nil million Canadian Undepreciated…
Current Commodity Hedges Zargon uses hedges to help fund dividends and capital programs Hedging during periods of lower commodity prices Strategy Current Q1 2015: 1,600 bbl/d at 93.44 US/bbl (WTI) Forward Oil Sales Q2 2015:…
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