Investment Highlights Operated High operatorship (89%) characteristics. Light High light/medium oil and liquids weighting (84%). and Medium Low production decline (13% for oil and liquids). Oil Proved and Probable Oil Reserves…
Core Areas Q4 2015 production of 1,679 bbl/d and 0.28 mmcf/d. Williston Basin Proved and probable reserves of 7,659 mbbl and 1.21 bcf at Dec 31, 2015. Proved and probable producing reserves of 6,431 mbbl and 1.16 bcf at Dec 31,…
Zargon Overview (March 7, 2016) Capitalization Toronto Stock Exchange: Symbols: ZAR; ZAR.DB Common Shares Outstanding (Dec. 31, 2015): 30.366 million (basic) Market Capitalization: 19 million (0.63 per share) (1) Net Debt at…
Waterflood/drive Well Inventory Drilling Inventory of 75+ net horizontal wells. Over the last couple of years, conventional oil exploitation drilling activities have been curtailed as the Company has been allocating available…
Williston Basin Locations Drilling Inventory Since summer 2014, Zargon has drilled only three (fall 2014) Williston Basin wells, as essentially all discretionary capital has been redirected to the Little Bow ASP project. Zargon has…
Long-Life, Low-Decline Oil Production Average Annual Decline Rate (%) Zargon Corporate Decline Analysis - Total Oil Production Rate 6,000 0 10 20 30 40 50 Gross W.I. Oil Production Rate ( bbl/day ) 5,000 Zargon 4,000…
Little Bow ASP EOR in a mature Southern Alberta Waterflood Little Bow ASP Phase 1 Winter Drilling Phase 1 Scheme Boundary Oil Producer ASP Injector Waterflood Injector 2015 Program Summer Drilling Location Conversion…
Phase 1 Response and Updated Forecast McDaniel YE 2016 2p forecast 2016 Avg. 655 bbl/d Recent production impacted by pipeline Zargon Forecast break; repairs expected by mid-March 2016 (Reflects AS Deferral) 2016 Avg. 600…
Capital Expenditure Forecast (all in millions) 2015 2016 2016 Capital Program (Audited) (Nov. 15 forecast) (Jan. 16 forecast) ASP Phase 1 Exploitation 7.4 - 1.0 ASP Phase 1 Chemical Costs 12.1 12.0 5.0 Total ASP Capital 19.5 12.0…
Cost Reductions - Progress Made Conventional Oil Exploitation Capital (defer all non-discretionary costs): Capital 38.1 million (2014), 6.0 million (2015), 3 million (2016 budget). Costs ASP Capital (defer Little Bow Phase 2;…
Williston Basin 2016 Cash Flow Parameters (No Drilling Case) Conv. Oil 1,530 bbl/d in 2016; compares to Q4 2015 rate of 1,679 bbl/d. Production Gas 0.40 mmcf/d; compares to Q4 2015 rate of 0.28 mmcf/d. Equiv. 1,600 boe/d in 2016;…
Williston Basin 2016 Cash Flow Estimates (No Drilling Case 1,600 boe/d) Free Cash Flow After All Capital, US WTI Pricing FX (US/Cdn.) Field Pricing Field Cash Flow Tax, Abandonments & Reclamations 35 US/bbl 0.69 38.70 Cdn./bbl 6.6…
Alberta Plains 2016 Cash Flow Parameters Includes ASP, Alberta Plains North & South (No Drilling Case) Conv. Oil 1,420 bbl/d in 2016. Production ASP Oil (Phase 1) 600 bbl/d; 400 bbl/d incremental to waterflood. Total Oil 2,020…
Alberta Plains 2016 Cash Flow Estimates Includes ASP (No Drilling or AS Injections Case 2,550 boe/d) No Drilling Case) Free Cash Flow After All Capital, WTI Pricing FX (US/Cdn.) Field Pricing Field Cash Flow Abandonments &…
Corporate 2016 Cash Flow Parameters (No Drilling Case 3,550 bbl/d and 3.6 mmcf/d) Conv. Oil 2,950 bbl/d in 2016. Production ASP Oil (Phase 1) 600 bbl/d; 400 bbl/d incremental to waterflood. Total Oil 3,550 bbl/d compares to 3,635…
Corporate 2016 Cash Flow Estimates (No drilling or AS inj. Case 3,550 bbl/d and 3.6 mmcf/d) No Drilling Case) Field G&A, US Taxes, Corporate Cash Flow After WTI Average Oil Cash Flow Hedges & Corporate All Capital, Abandonments…
Valuation based on 2016 Cash Flow Estimates (No Drilling Case 3,550 bbl/d and 3.6 mmcf/d) No Drilling Case) Calculated WTI Field Cash Flow Six Times Field Zargon YE 2015 Attributed to Zargon Share Pricing (excl. hedges) Cash Flow…
Audited Tax Pools (Dec. 31, 2015) Category Amount Annual Deductibility Canadian Exploration Expense 42 million 100% Non Capital Losses 143 million 100% Canadian Development Expense 31 million 30%, declining balance Canadian Oil &…
McDaniel Net Asset Value NAV Calculation (Dec 31, 2015) Proved + Prob. McDaniel Est. (BT DCF 10%) 259 million Undeveloped Land (Seaton Jordan evaluation) 9 million Deduct Net Working Capital & Bank Debt - 121 million Net Asset…
Enterprise Value (March 4 trading price) Zargon Valuation with Discounted Debentures (March 4 pricing) Common Shares (30.4 million 0.63 March 4, 2016) 19 million Debentures (0.575 million 32.58 March 4, 2016) 19 million Add Net…
McDaniel 2015 Year End Net Asset Value Proved & Probable Reserves Basis Waterflood & 2015/Q4 Production McDaniel Reserves McDaniel McDaniel Waterdrive Oil & Liquids Gas Oil & Liquids Gas PV10 Asset Value Future Capital Properties…
Key Takeaways Balance Zargons unique low-decline asset provides stable volumes in this challenging low price Sheet (OK period. Due to these asset attributes, Zargon can navigate 2016 with 40 US/bbl WTI oil prices while delivering…
Property Appendices zargon.ca
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. Surfactants:…
Analog ASP Performance (The Prize) Husky Taber Mannville B ASP Husky Gull Lake ASP The Taber Mannville B and Gull Lake ASP projects are good analogs to our Little Bow ASP project. Successful ASP projects provide stable…
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…
Original (2014) Development Plan 15-19W4 15-18W4 Project timing has been delayed; oil prices are sharply lower and full cycle economics are Phases 1&2 challenged. Area However, Zargons ASP plant facilities can ultimately provide…
Steelman Free Cash Flow Stable Production Exploration, Optimization, Waterflood Midale & Frobisher Production Conventional Large OOIP & low recovery factors Net Operated Frobisher & Midale Production 450b/d Oil Net Non-Op Production…
Ralph Midale - Twp 7, Rge 13 W2 Waterflood Optimization Opportunities Water Injection Wells Established waterflood Future Winj Conv. Strong stratigraphic trap Mapped OIP 15MMbbl PUD Locations Infill Locations Current RF 12%…
North Dakota - Overview Large OOIP Haas Upside, bypass pay potential Stable production; 15.1 MMbbls oil produced to date Infrastructure & disposal in place WI 97.6% to 100% ownership Gross/Net Acreage 18.78/18.43 Sections…
Bellshill Lake Oil Rate (bbl/day) 900 800 700 600 500 400 300 200 100 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 Medium gravity oil in high permeability Dina sands Continued development has produced a platform of…
Killam Glauconite Property Oil Rate (bbl/day) 1,000 100 10 2010 2011 2012 2013 2014 2015 Data to May 31, 2015 Significant oil-in-place medium gravity Glauconite oil property Significant infill development potential…
Taber South Sunburst Oil Horizontal Development 31 Horizontal wells drilled since 2007 - current production 600 bbls/d Waterflood expanding to north - currently 5 horizontal injectors 5 additional locations identified -…
Taber South Sunburst Hz Oil OOIP and Recoveries OOIP South Pool 15.5 million bbls North Pool Recovery to date 9.7% API 20 deg Forecast ultimate recovery PDP-15.8%, PDP+P-18.3% OOIP North Pool 6.7 million bbls Recovery to date…
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