Corporate Presentation September 1, 2016 zargon.ca
Strategic Review Asset Sales Zargon has concluded the sale of all of its Southeast Saskatchewan assets for cash Southeast consideration of Saskatch- 89.5 million cash, subject to 2.7 million of transaction and severance costs. ewan…
Impact of Asset Sales on Zargon Production: 2,749 barrels of oil equivalent per day (H1 2016) Remaining 81 percent oil and liquids Assets Proven plus probable reserves: 15.09 million barrels of oil equivalent 88 percent oil and…
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 (Post SE Saskatchewan & Killam Sales) Capitalization(1) Asset Profile Share Price (08/31/16) 0.93 Last Quarter Production (Q2 2016) Gas (MMcf/d) Liquids (bbl/d) % Liquids Total (boe/d) % of Production Fully Diluted…
Conventional Properties zargon.ca
Alberta Plains (excluding ASP & Killam) Zargon has maintained a low production decline despite restricted capital programs Q2 2016 production of 1,702 boe/d 74% liquids-weighted (16 - 32 API) Average WI 72%, 98% operated Oil…
Alberta Plains Properties Overview (Excluding Little Bow ASP and Killam) Operating Summary Q2/2016 Production 1,256 bbl/d (1,702 boe/d) Royalty Rate 5.6% Forecast Quarterly OPEX 3.05 million (12.2 million in 2016) Reserves:…
Alberta Plains Bellshill Lake Bellshill Lake produces low-decline oil with remaining infill drilling potential Q2 2016 production of 502 boe/d (95 % oil) Low production declines; OPEX 12.80/boe Historical capital programs have kept…
Alberta Plains Taber Mannville Taber is Zargons main oil producing asset outside of the ASP project, and offers low- decline production with remaining development potential Sunburst development is seismically defined with 30 horizontal…
North Dakota Properties Undercapitalized area with high working interest, undeveloped land and horizontal drilling opportunities Long life conventional oil properties - Stable production, more than 15 MMbbl oil produced to date -…
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 Little Bow ASP Plan View 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 Q2/2016 Production 530 bbl/d (569 boe/d) Oil Prodn Decline Rate n/a (increasing rates) Royalty Rate 2.9% Forecast Quarterly OPEX 1.25 million (5 million in 2016)…
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…
Cash Flow Projections & Valuations zargon.ca
Zargon H2 2016 Cash Flow Parameters (Pro forma SE Saskatchewan and Killam Sales) Production Oil 2,170 bbl/d (includes 560 bbl/d ASP and 400 bbl/d North Dakota) Gas 2.75 mmcf/d Equiv. 2,630 boe/d; compares to H1 2016 rate of 2,686…
Zargon H2 2016 Cash Flows (Annualized) (Pro forma SE Saskatchewan and Killam Asset Sales) No Drilling WTI Case) Annualized Field Annualized Annualized Free Cash Pricing FX Field Pricing Cash Flow Corporate Cash Flow After All…
Valuation from H2 2016 Cash Flow (Annualized) (Pro forma SE Saskatchewan and Killam Asset Sales) No Drilling WTI Case) 4.5 Times Field Zargon Pro Attributed to Calculated Pricing Field Cash Flow Cash Flow Forma Net Debt Zargon…
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 6,057 4,636 65 6,895 89% 91.9 Developed Non-Producing 186 2,004 5 526…
Zargon Enterprise Value August 31, 2016 Price (Incorporating the completed SE Sask. Asset Sale Only) Zargon Valuation with Discounted Debentures (August 31 pricing) Common Shares (30.5 million 0.93 August 31, 2016) 28.4 million…
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 At current prices, little or no value…
Corporate Presentation September 1, 2016 zargon.ca
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