Core Attributes Oil Pressure Supported (Waterflood and Waterdrive): Stable low-decline properties Exploitation augmented by 35+ prospective oil exploitation locations. 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 (June 18, 2015) Capitalization Toronto Stock Exchange: Symbols: ZAR; ZAR.DB Common Shares Outstanding: 30.28 million (basic) Market Capitalization: 88 million (2.92 per share) (1) Net Debt at March 31, 2015: 114…
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…
Waterflood/drive Well Inventory Drilling Inventory of 35+ net wells. Future drilling will be deferred until oil prices improve (70+ US/bbl WTI prices). Property Project Net Wells Comments Bellshill Lake Increase fluid…
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 ) Zargon 5,000 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…
Little Bow ASP Phase 1 Production Despite encouraging oil cut improvements, Little Bow ASP: Phase 1 Production oil production growth stalled in Q2. Oil Rate Oil Avg Oil Cut Oil Cut Avg 350 7 Northwest Region: subsequent to Q4…
ASP Oil Response Varies by Area Northwest: Southeast: Chemical Injection: 23% complete Improved Oil Cuts Chemical Injection: 24% complete Injection conformance challenges From ASP Injections Summer/fall work plan: four workovers…
Phase 1 Response vs. Forecast Little Bow ASP Oil Production 1800 Updated April 2015 Zargon Forecast 1600 2015/16 increment = 260 / 970 bbl/d Ultimate: 2.78 million barrels 1400 1200 1000 bbl/d Sustained at this 800…
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…
Phases 1 & 2 Model Economics at 75 WTI Little Bow ASP: Phases 1&2 Production Full Cycle Go Forward 2500 IRR (%) 14 61 Phases 1&2: PV10 (million) 30 101 12% Recovery (5.2 mmbbl) 2000 F&D (/bbl) (1) 30 18 Phase 1 1500 Netback…
Phases 3 & 4 Model Economics at 75 WTI ASP Development Forecast - Phases 1-4 Go Forward Economics 3000 Phases 3 & 4 Phases 1 - 4 Zargon W.I. Production IRR (%) 33 55 2500 Phases 3&4 PV10 (million) 50 150 Phases 1&2 11% Recovery…
Modeled Netbacks and Recycle Ratios With much of the Little Bow ASP project capital behind us, further project reinvestment provides attractive half cycle returns (even at the current low oil prices). Future Development Costs Phase…
Capital Budgets and 2015/16 Cash Flows Capital Program 2015 Preliminary 2016 ASP Phase 1 Exploitation Capital 5 million 2 million ASP Phase 2 (modified) Development Capital nil million 6 million ASP Phase 1 Chemical Costs 12 million…
Production, Price and Cost Forecasts Production Q1/15 Oil 3,878 bbl/d conventional and 50 bbl/d ASP (actuals) Guidance Cal. 2015 Oil 3,700 bbl/d conventional declining at 14 percent per year ASP Oil Use more conservative McDaniel 2P…
Commodity Hedges Zargon uses hedges to help fund dividends and capital programs during periods Hedging of lower commodity prices. Our oil hedging policies allow for the forward sale of Strategy up to a 70 percent maximum of…
McDaniel 2014 Yr. End Net Asset Value Waterflood Waterdrive Q1/15 Oil Q1/15 Gas Production McD. Oil Res. McD. Gas PV10 Asset Value Properties Production (bbl/d) (mmcf/d) (mmbbl) Res. (bcf) (million) Williston Basin 1,834 0.37 7.95…
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 Protected We are committed to protecting our balance sheet through cost containment initiatives, 2015-16 capital…
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…
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…
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