Key Points (Jan. 19, 2015) December 22, 2014 Balance Sheet Preservation Press Release: Balance sheet Dividend decreased to 0.03/month -Saves 11 million in 2015 protected Hamilton Lake property sale closed -Provided 22.5 million…
Core Attributes Pressure Supported (Waterflood and Waterdrive): 35+ prospective oil exploitation Oil locations in pressure supported (low decline) properties. Exploitation Tertiary (ASP): Little Bow ASP tertiary recovery project…
Asset Description Waterflood Properties account for approximately 95% of oil production after the Hamilton Lake sale; very predictable with low declines of 15 percent per year. and Waterdrive Inventory of low risk oil exploitation…
Zargon Overview (Jan. 16, 2015) Capitalization Toronto Stock Exchange: Symbols: ZAR; ZAR.DB Common Shares Outstanding: 30.25 million (basic) Market Capitalization: 115 million (3.80 per share) (1) Net Debt at Dec. 31, 2014…
2015 Corporate Objectives Little Bow Operate efficiently and cost-effectively while delivering 2015 ASP production targets. ASP Deliver phase 1 exploitation modifications and phase 2 pre-construction objectives for less than 8…
Waterflood/drive Well Inventory Drilling Inventory of 35+ net wells The Q4 2014 conventional oil exploitation drilling program included 3 Williston Basin and 2 Taber wells. Future drilling will be deferred until oil prices…
Long-Life, Low-Decline Oil Volumes Average Annual Decline Rate (%) 0 10 20 30 40 50 Zargon Corporate Decline Analysis - Total Oil Production Rate 6,000 Gross W.I. Oil Production Rate ( bbl/day ) 5,000 Zargon 4,000 3,000…
Canadian ASP Projects Alberta Sask. Grande Prairie Mooney 10 Canadian ASP Projects in (Black Pearl) 2011 operation. 2 additional projects have regulatory approval. Edmonton Major operators: Husky, CNRL, Cenovus, Crescent…
Little Bow ASP: Proven Technology EOR in a mature, southern Alberta waterflood Little Bow ASP: Phase 1&2 Development Phased Development Phase 1 ASP injection commenced March 2014 15-18W4 Capital (Non Chemical): Phase 1: 50…
Little Bow ASP Project Milestones Recent Highlights ASP facility, oil battery and field construction complete and online in March 2014 (50 million: construction & startup). July 2014 - Revisions to Conventional Enhanced Oil Recovery…
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. a) Water Injection:…
ASP Injection Sequence 1) ASP Injection 2) Polymer Push 3) Terminal Waterflood A blend of Alkali, Surfactant & Polymer displaces mobilized Return to waterflood to Polymer mobilizes trapped oil oil to producing wells complete oil…
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…
Phases 1 & 2 Optimization Study ASP Oil Recovery (mbbl) Zargon 2013 Optimized: 6,500 ASP Oil Recovery 1,276 cases run Zargon 2013 Economics: 5,200 Reservoir simulation model McDaniel 2013 Year End: 4,500 developed to optimize…
Early Oil Responses Near Injectors Little Bow ASP Phase 1 50 02/10-32-014-18W4/0 Oil Cut: 6.0 % 45 40 35 Oil (bbl/d) 30 25 Oil Cut: 2.0 % 20 15 10 Oil Cut: 0.8 % 5 0 Oil Producer Mar Apr May Jun Jul Aug Sep Oct Nov…
Phase 1 Response Actual vs. Forecast Little Bow ASP: Phase 1 Oil Production 1400 Updated Zargon Forecast 1200 2015 Avg. = 400 bbl/d Ultimate: 5.2 million barrels 1000 800 bbl/d 600 Daily Actuals McDaniel TP+P 400 2015…
Phases 1-4 Development Plan 15-19W4 15-18W4 Zargon W.I. W.I. DOIIP* (%) (mmbbl) Phases 1&2 Phases 1 & 2 Area LB I Pool 100 31 LB P Pool 100 8 14-19W4 14-18W4 Phases 3&4 Phases 3 & 4 Area U&W Unit 97 26 G Unit 95 10 G, U&W…
Alberta Modified EOR Crown Royalty Program Highlights and its Impact on Zargon Announced July 2014. Now, Alberta conventional oil EOR royalties in line with Alberta oil sands and Saskatchewan conventional oil EOR programs. 5 percent…
Project Netbacks and Recycle Ratios The Little Bow ASP project provides attractive half cycle returns (even at the current low oil prices), that will provide profitable reinvestment programs throughout the rest of the decade. Future…
2014 Property Disposition Program Objective: Conclude property dispositions that high-grade and concentrate the Companys properties on our core oil exploitation business: Completed 2014 property sales: 1.5 million of Q1 proceeds…
2014 and 2015 Capital Budgets Capital Program 2014 2015 (revised) ASP Phase 1 Construction Capital 8 million nil ASP Phase 1 Exploitation Capital 2 million 2 million ASP Phase 2 Development Capital nil 6 million ASP Phase 1…
Production Guidance and Cost Targets Oil and Q4 2014 4,100 barrels per day (reflects completed property sales) Liquids Q1 2015 4,100 barrels per day (4,000 bbl/d conventional and 100 bbl/d ASP) Guidance Cal. 2015 3,800 barrels per…
McDaniel 2013 Yr. End Net Asset Value Waterflood Waterdrive Q3/14 Oil Q3/14 Gas Prod. McD. Oil Res. McD. Gas PV10 Asset Value Properties Prod. (bbl/d) (mmcf/d) (mmbbl) Res. (bcf) (million) Williston Basin 1,673 0.56 7.65 0.95 171…
Key Takeaways Balance Balance sheet has been protected by dividend reduction, 2015 capital budget reduction, property sales, and cost containment initiatives. Sheet Protected Unaudited bank debt (& net working capital deficiency)…
Appendices zargon.ca
Williston Basin Property Summary Historical - Current Assets 2008 2009 2010 2011 2012 2013 2014 The Williston Basin assets are characterized by waterflood and waterdrive 2900 2800 2700 2600 2500 properties. Significant oil…
Williston Basin Activity Summary Ongoing Activities Exploit long life low decline pools Saskatchewan Manitoba with horizontal wells and waterflood enhancements. 2014 Activities Drilled 8 exploitation horizontal wells at Steelman,…
Taber South Property Summary Taber S - Production Contribution by Drilling Program Date (29 hz wells) 1,000 Pre 2008 2008 2009 2010 Q1 2011 Q3 2011 Q4 2012 Q4 2013 Q2 2014 900 800 700 600 Oil Rate (bbl/d) 500 400…
Little Bow (pre-ASP) Property Summary Little Bow Core Area Production 800 700 600 Oil Rate (bbl/d) 500 Zargon Operated Oilwells 400 No Drilling Activity - Well Reactivation/Optimization Projects 300…
Bellshill Lake Property Summary Bellshill Lake property includes a Bellshill Lake waterdrive and Killam Glauconite waterflood property. The Bellshill Lake waterdrive property has been developed with vertical producers and high…
McDaniel 2013 Yr. End Net Asset Value NAV Calculation (Dec 31, 2013) Proved + Prob. McDaniel Est. (PVBT 10%) 469 million Undeveloped Land 17 million Less Est. Net Working Capital & Bank/Debenture Debt ( 116 million) Net Asset Value…
Current Commodity Hedges Zargon uses hedges to help fund dividends and capital programs Hedging during periods of lower commodity prices Strategy Q4 2014: 2,600 bbl/d at 90.92 US/bbl (WTI) and 400 bbl/d at 99.60 Current…
Estimated Tax Pools Category June 30, 2014 Canadian Exploration Expense 55 million Non Capital Losses 113 million Canadian Development Expense 51 million Canadian Oil & Gas Property Expense 2 million Canadian Undepreciated…
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