Debenture Restructuring Proposal Zargon is seeking approval to amend Zargons outstanding 57.5 million of 6% Convertible Debentures by: Proposal extending the maturity date of the Debentures from June 30, 2017 to December 31, 2019…
Debenture Restructuring Proposal (Cont.) Pursuant to debenture holder approval of the proposed debenture restructuring amendment, Zargons capital structure will be (as of March 31, 2017): Pro Forma Bank debt nil (Zargon will…
2017 Outlook Zargons 7.8 million 2017 capital budget is allocated to 2.7 million for Little Bow polymer chemical 2017 purchases, 1.5 million of non discretionary land retention costs and 3.6 million to property/well Capital…
Key Investment Highlights Zargon provides exceptional torque to higher oil prices, in addition to offering a variety of attractive oil exploitation opportunities including oil exploitation horizontal infill drills and a long term…
Corporate Overview (Excluding SE Saskatchewan & Killam Sold Assets) Capitalization(1) Asset Profile Share Price (Jan 5, 2017) 0.83 Last Quarter Production (Q3 2016) Gas (MMcf/d) Liquids (bbl/d) % Liquids Total (boe/d) % of Production…
Conventional Properties zargon.ca
Alberta Plains (excluding Little Bow ASP) The Alberta Plains properties provide low decline oil volumes with the Alberta Plains potential for further development Q3 2016 production of 1,648 boe/d T 40 73% liquids-weighted (16 - 32…
Alberta Plains Properties Overview (Excluding Little Bow ASP) Alberta Operating Cost Trend (excluding ASP) Operating Summary Q3/2016 Production 1,208 bbl/d (1,648 boe/d) 5,000 Quarterly Expense (M) Forecast Q4 2016 Op. cost of…
Alberta Plains Bellshill Lake Bellshill Lake produces low-decline oil with remaining infill drilling potential Low production declines Historical capital programs have kept production flat since 2010 Yearly programs have continued…
Alberta Plains Taber Mannville Taber is Zargons largest oil producing asset outside of the ASP project, and offers low-decline production with remaining development potential Sunburst development is seismically defined 30 horizontal…
North Dakota Properties Undercapitalized area with high working interest, undeveloped land and horizontal drilling opportunities Long life conventional oil properties, average of 27 API gravity oil - Stable production, more than 15…
Little Bow ASP (Tertiary EOR) zargon.ca
Little Bow ASP EOR in a mature Southern Alberta Waterflood Future ASP Phase ASP Modified Phase 2 Area ASP Facility & Gas Plant Zargon constructed an Alkaline Surfactant Polymer (ASP) facility at ASP Phase 1 Little Bow,…
Little Bow ASP Project Zargons Little Bow ASP project has shown good oil banking, but the combination of low oil prices and Zargons weakened financial condition has forced Zargon to idle the project in a manner that preserves future…
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 Calendar 2017 Cash Flow Parameters Oil 2,050 bbl/d Production Gas 2.70 mmcf/d Equiv. 2,500 boe/d (82 % oil and liquids). Royalties 8% Alberta, 24% North Dakota (includes state and severance taxes) Oil Prices WTI WCS…
Zargon Calendar 2017 Projected Cash Flows Free Cash Flow WTI Pricing Field Pricing Field Cash Flow Corporate Cash Flow After All Capital (US/bbl) (Cdn./bbl) (million) (million) (million) 45 40.50 11.2 3.9 (3.9) 50 47.17 15.7 6.8…
Valuation Using Forecast 2017 Field Cash Flows Field 4.5 Times Zargon Pro Attributed to Calculated WTI Pricing Cash Flow Field Cash Flow Forma Net Debt Zargon Shares Zargon Value (US/bbl) (million) (million) (million) (million) (per…
Zargon Enterprise Value Jan. 5, 2017 Prices Zargon Valuation with Discounted Debentures (Jan. 5 pricing) Common Shares (30.61 million 0.83 Jan. 5, 2017) 25.4 million Debentures (57.5 thousand 890 Jan 5, 2017) 51.2 million Subtract…
Key Considerations Investors buy Zargon at a discount to the proved developed producing net asset value when evaluated at prices at (or above) current strip. Exceptional Zargons long-life oil reserves provide investors exceptional…
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