Sale of Southeast Saskatchewan Assets Zargon has entered into a definitive agreement for the sale of all of its Southeast July 25, Saskatchewan assets for cash consideration of 2016 89.5 million cash, subject to normal closing…
Impact of Asset Sale on Zargon The proceeds of the transaction will initially be used to pay down Zargons bank debt. As Balance outlined below, Zargons net debt (including debentures) will be approximately 35.0 Sheet million…
Key Investment Highlights Zargon offers a variety of attractive oil exploitation opportunities ranging from horizontal exploitation infill drills to a long term Southern Alberta tertiary recovery project Zargon is an oil-weighted…
Corporate Overview Capitalization(1) Asset Profile % of Share Price (07/22/16) 0.455 Last Quarter Production (Q1 2016) Gas (MMcf/d) % Gas Liquids (bbl/d) % Liquids Total (boe/d) Production Fully Diluted Shares Outstanding 31.5 Market…
Conventional Properties zargon.ca
Alberta Plains (excluding ASP) Zargon has maintained a low production decline despite restricted capital programs Q1 2016 production of 2,012 boe/d 72% liquids-weighted (16 - 32 API) Average WI 72%, 98% operated Oil production…
Alberta Plains Properties Overview (Excluding Little Bow ASP) Operating Summary Q1/2016 Production 1,452 bbl/d (2,012 boe/d) Oil Prodn Decline Rate 14% / year Royalty Rate 3.1% Forecast Quarterly OPEX 3.25 million (13 million in…
Little Bow ASP (Tertiary EOR) zargon.ca
Little Bow ASP Project Zargons Little Bow ASP project is showing good oil banking and production gains. Little Bow ASP Plan View Phase 1 of the Little Bow ASP project was implemented in March 2014 in the heart of the Mannville I…
Little Bow ASP EOR in a mature Southern Alberta Waterflood Alberta Crown July 11 Announcement Extends EOR royalty program to polymer projects At higher oil prices, the existing ASP infrastructure can be utilized for multiple ASP…
Little Bow ASP (Tertiary EOR) Overview Operating Summary Q1/2016 Production 479 bbl/d (535 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 Forecast 14
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 Taber Mannville B ASP Analog Little Bow Mannville I 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 & Valuations zargon.ca
Zargon H2 2016 Cash Flow Parameters (Pro forma SE Saskatchewan Sale) Production Oil 2,240 bbl/d Gas 3.05 mmcf/d Equiv. 2,750 boe/d; compares to H1 2016 rate of 2,882 boe/d. Oil Prices WTI oil price to Zargon average field…
Zargon H2 2016 Cash Flows (Annualized) (Pro forma SE Sask. Asset Sale) WTI No Drilling Case) Annualized Field Annualized Annualized Free Cash Pricing FX Field Pricing Cash Flow Corporate Cash Flow After All Capital (US/bbl)…
Valuation based on H2 2016 Cash Flow (Pro forma SE Sask. Asset Sale) WTI No Drilling Case) Five Times Field Zargon Q1 2016 Attributed to Calculated Pricing Field Cash Flow Cash Flow Net Debt Zargon Shares Zargon Value (US/bbl)…
Reserves Summary Reserves Summary(1) Natural Gas B.Tax Crude Oil Natural Gas Liquids Total % Liquids PV 10% Mbbl MMcf Mbbl Mbbl % MM Proved Developed Producing 6,184 5,254 65 7,125 88% 93.7 Developed NonProducing 186 2,004 5 526…
Zargon Enterprise Value July 22, 2016 Price (Prior to SE Sask. Asset Sale Announcement) Zargon Valuation with Discounted Debentures (July 22 pricing) Common Shares (30.5 million 0.455 July 22, 2016) 13.9 million Debentures (0.575…
Zargon Enterprise Value July 22, 2016 Price (Incorporating the SE Sask. Asset Sale Announcement) Zargon Valuation with Discounted Debentures (July 22 pricing) Common Shares (30.5 million 0.455 July 22, 2016) 13.9 million Debentures…
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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