Zargon Statistical Overview Capitalization(1) Asset Profile Share Price (March 14, 2017) 0.68 Last Quarter Production (Q4 2016) Gas (MMcf/d) Liquids (bbl/d) % Liquids Total (boe/d) % of Production Basic Shares Outstanding 30.67…
Zargon Key Investment Highlights Zargon is a Canadian oil and gas producer that provides exceptional torque to higher oil prices, in addition to offering a variety of attractive oil exploitation opportunities including oil…
Debenture Restructuring Proposal Approved Zargon has received approval to amend Zargons 57.5 million of 6% Convertible Debentures by: Proposal extending the maturity date of the Debentures from June 30, 2017 to December 31, 2019…
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…
Alberta Plains (excluding Little Bow ASP) The Alberta Plains properties provide low decline oil volumes with the Alberta Plains potential for further development Q4 2016 production of 1,662 boe/d T 40 71% liquids-weighted (16 32o…
Alberta Plains Properties Overview (Excluding Little Bow ASP) Alberta Operating Cost Trend (excluding ASP) 5,000 Quarterly Expense (M) Forecast 2017 Op. cost of 11.6 million 4,000 Operating Summary Q4/2016 Production 1,175…
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 EOR in a mature Southern Alberta Waterflood ASP Modified Phase 2 Area ASP Facility & Gas Plant Zargon constructed an Alkaline Surfactant Polymer (ASP) facility at ASP Phase 1 Little Bow, Alberta, which enables…
Little Bow ASP Project Zargons Little Bow ASP project has shown good oil banking, but the combination of low Upper Mannville P Pool oil prices and Zargons weakened financial condition forced Zargon to idle the project in a manner that…
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 production…
McDaniel Reserves Review Future Oil & Gas Production Oil Production Forecast (PDP & P+PDP) 2,000 McDaniel Oil Reserves & Production Characteristics RLI (yrs) & 2017 Decline Rate (%/yr) 1,750 Oil Production Rate (bbl/d) 1,500…
2016 Year End Reserves Summary Oil & Liquids Sales Gas Total B.Tax PV 10% Reserve Category (mbbl) (mmcf) (mboe) ( million) PDP 6,284 4,753 7,076 84.3 Total Proved 7,152 6,381 8,215 93.2 P+PDP 8,360 6,184 9,391 111.4 Proved &…
Net Asset Value Comparison McDaniel Year End Pricing NAV Calculation (Dec 31, 2016 Reserves) Proved + Prob. McDaniel Est. (BT DCF 10%) 132 million Undeveloped Land (Seaton Jordan evaluation) 2 million Deduct Net Working Capital &…
Cash Flow Projections & Valuations zargon.ca
Calendar 2017 Cash Flow Parameters Oil 1,980 bbl/d Production Gas 3.10 mmcf/d Equiv. 2,500 boe/d (79% oil and liquids). Royalties 9% Alberta, 24% North Dakota (includes state and severance taxes) Oil Prices WTI WCS diff.:…
Calendar 2017 Projected Cash Flows (excluding hedges) Free Cash Flow WTI Pricing Field Pricing Field Cash Flow Corporate Cash Flow After All Capital (US/bbl) (Cdn./bbl) (million) (million) (million) 45 40.58 9.9 0.7 (7.1) 50 47.28…
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…
Enterprise Value under Strip Pricing Comparison to Mar 14, 2017 Market Prices NAV Calculation (Dec 31, 2016 Reserves) Feb 3, 2017 STRIP PRICING (NO COST INFLATION) Proved + Prob. Strip Pricing (BT DCF 10%) 100 million Undeveloped…
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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