Corporate Summary Zargons assets offer low-decline, operated oil production with significant oil exploitation opportunities Zargons assets provide exceptional torque to higher oil prices (financial, operational, and exploitation)…
Key Investment Highlights 4
Corporate Overview Capitalization (1) Asset Profile Share Price (05/06/16) 0.56 Last Quarter Production (Q1 2016) Gas (MMcf/d) % Gas Liquids (bbl/d) % Liquids Total (boe/d) % of Production Fully Diluted Shares Outstanding 31.4…
Corporate Production Zargon has maintained a low conventional oil production decline despite minimal non-ASP 2015 capital expenditures Q1 2016 production of 4,176 boe/d (84% liquids) Conventional oil production decline of 12% over the…
Conventional Properties zargon.ca
Zargon Conventional Properties Overview (Excluding Little Bow ASP) Operating Summary Q1/2016 Production 3,024 bbl/d (3,641 boe/d) Oil Prodn Decline Rate 12% / year Royalty Rate 11.6% Forecast Quarterly OPEX 6.25 million (25…
Williston Basin Zargons Williston Basin is an under-capitalized asset with several development opportunities. Q1 2016 production of 1,629 boe/d 97% liquids-weighted (26-36 API) Zargon Williston Basin Properties Average WI 85% 94%…
Williston Basin (Continued) The Williston Basin properties provide operated, low decline light oil production with significant exploitation potential (1) Zargon Williston Basin Historical Production Oil Production (bbl/d) Zargon…
Williston Basin Properties Overview Operating Summary Q1/2016 Production 1,572 bbl/d (1,629 boe/d) Oil Prodn Decline Rate 7% / year Royalty Rate 14.8% Forecast Quarterly OPEX 2.75 million (11 million in 2016) Reserves: McDaniel…
Alberta Plains (excluding ASP) Zargon has maintained a low production decline despite restricted capital programs Zargon Alberta Plains (excluding ASP) Historical Production(1) Q1 2016 production of 2,012 boe/d Oil Production…
Alberta Plains Properties Overview (Excluding ASP Little Bow ASP) Operating Summary Q1/2016 Production 1,452 bbl/d (2,012 boe/d) Oil Prodn Decline Rate 16% / year Royalty Rate 3.1% Forecast Quarterly OPEX 3.50 million (14 million…
Little Bow ASP (Tertiary EOR) zargon.ca
Little Bow ASP Project Zargons Little Bow ASP project is showing good oil banking and production gains. Phase 1 of the Little Bow ASP project was implemented in Little Bow ASP Plan View March 2014 in the heart of the Mannville I Pool…
Little Bow ASP EOR in a mature Southern Alberta Waterflood ASP Capital Forecast (Phase 1 Polymer Injection Only) Polymer Costs: 0.3 million per month through Q1 2019 Production Forecast (Phase 1 Polymer Injection Only) 600+…
Little Bow ASP (Tertiary EOR) Overview Operating Summary Q1/2016 Production 479 bbl/d (536 boe/d) Oil Prodn Decline Rate n/a (increasing rates) Royalty Rate 2.9% Forecast Quarterly OPEX 1.25 million (5 million in 2016)…
Phase 1 Response and Updated Forecast Zargon Forecast (Polymer only injection) 2016 H2 Avg: 600+ bbl/d Daily Production Annual Decline: 11% Injection Pipeline Outage Base Waterflood Daily Production to May 9,…
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…
Cash Flow Projections zargon.ca
Cost Reductions - Progress Made Conventional Oil Exploitation Capital (defer all non-discretionary costs): Capital 38.1 million (2014), 6.0 million (2015), 2 million (2016 updated budget). Costs ASP Capital (defer Little Bow Phase…
Williston Basin 2016 Cash Flow Parameters (No Drilling Case) Conv. Oil 1,530 bbl/d in 2016; compares to Q1 2016 rate of 1,572 bbl/d. Production Gas 0.40 mmcf/d; compares to Q1 2016 rate of 0.34 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, WTI Pricing FX (US/Cdn.) Field Pricing Field Cash Flow Abandonments & Reclamations 35 US/bbl 0.72 36.61 Cdn./bbl 6.2 million…
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 compares to 3,024 bbl/d in Q1 2016. Production ASP Oil 600 bbl/d compares to 479 bbl/d in Q1 2016 Total Oil 3,550 bbl/d…
Corporate 2016 Cash Flow Estimates (No drilling Case 3,550 bbl/d and 3.6 mmcf/d) No Drilling Case) G&A, Hedges, Average Oil Field Cash Flow Abd. & Interest Corporate Cash WTI Pricing Production (excl. hedges) Costs Flow 35 US/bbl…
Valuations zargon.ca
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 Q1 2016 Attributed to Zargon Share Pricing (excl. hedges) Cash Flow…
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…
Reserves Summary Reserve Summary(1) Gross Reserves (as at December 31, 2015) Light and Heavy Crude Natural Gas Medium Crude Oil Natural Gas Liquids Total % Liquids Mbbl Mbbl MMcf Mbbl Mbbl % Proved Developed Producing 6,366 2,950…
Enterprise Value (May 6 trading price) Zargon Valuation with Discounted Debentures (May 6 pricing) Common Shares (30.5 million 0.56 May 6, 2016) 17 million Debentures (0.575 million 35 May 6, 2016) 20 million Add Net Working Capital…
Key Takeaways Investors buy Zargon at a large discount to the proved and probable (or proved Deep developed producing) net asset value when evaluated at prices above current strip. Discount to Despite recent encouraging production…
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