CALGARY, ALBERTA–(Marketwired – Nov. 25, 2014) – Zargon Oil & Gas Ltd. (TSX:ZAR)(TSX:ZAR.DB) (“Zargon”) announces that it has entered into a definitive purchase and sale agreement to sell its Hamilton Lake property for $25 million.
Zargon has entered into an agreement to sell its petroleum and natural gas assets in Hamilton Lake for a total consideration of $25 million that is comprised of $22.5 million in cash (before adjustments) and $2.5 million in marketable securities.
This transaction is scheduled to close prior to December 31, 2014 and is subject to customary industry closing conditions. The cash proceeds of the disposition will initially be used to reduce bank indebtedness. The Hamilton Lake property has been recently producing approximately 170 barrels of oil per day and 1.40 million cubic feet per day (400 barrels of oil equivalent per day) to Zargon’s interest. In their 2013 year end reserve appraisal, McDaniel & Associates Consultants Ltd. had assigned the Hamilton Lake property proved and probable reserves of 704 thousand barrels of oil and liquids and 3.02 billion cubic feet (1,208 thousand barrels of oil equivalent). Upon the closing of this transaction, updated production guidance for the fourth quarter of 2014 and 2015 will be provided.
Based in Calgary, Alberta, Zargon’s securities trade on the Toronto Stock Exchange and there are currently 30.175 million common shares outstanding.
This press release offers our assessment of Zargon’s future plans and operations as at November 25, 2014, and contains forward-looking statements. All statements other than statements of historical fact may be forward-looking statements. Such statements are generally identified by the use of words such as “anticipate”, “continue”, “estimate”, “expect”, “forecast”, “may”, “will”, “project”, “should”, “plan”, “intend”, “believe” and similar expressions (including the negatives thereof). In particular, this press release contains forward-looking statements pertaining to the following:
- our business plans and strategy;
- the Hamilton Lake production and reserve volumes;
- the closing date of the Hamilton Lake property disposition; and
- our use of the disposition proceeds.
By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond our control, including such as those relating to results of operations and financial condition, general economic conditions, industry conditions, changes in regulatory and taxation regimes, volatility of commodity prices, escalation of operating and capital costs, currency fluctuations, the availability of services, imprecision of reserve estimates, geological, technical, drilling and processing problems, environmental risks, weather, the lack of availability of qualified personnel or management, stock market volatility, the ability to access sufficient capital from internal and external sources and competition from other industry participants for, among other things, capital, services, acquisitions of reserves, undeveloped lands and skilled personnel. Risks are described in more detail in our Annual Information Form, which is available on our website and at www.sedar.com.
Forward-looking statements are provided to allow investors to have a greater understanding of our business. You are cautioned that the assumptions, including among other things, future oil and natural gas prices; future capital expenditure levels; future production levels; future exchange rates; the cost of developing and expanding our assets; our ability to obtain equipment in a timely manner to carry out development activities; our ability to market our oil and natural gas successfully to current and new customers; the impact of increasing competition, our ability to obtain financing on acceptable terms; and our ability to add production and reserves through our development and acquisition activities used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Our actual results, performance, or achievement could differ materially from those expressed in, or implied by, these forward-looking statements. We can give no assurance that any of the events anticipated will transpire or occur, or if any of them do, what benefits we will derive from them. The forward-looking information contained in this document is expressly qualified by this cautionary statement. Our policy for updating forward-looking statements is that Zargon disclaims, except as required by law, any intention or obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise.
Zargon Oil & Gas Ltd. is a Calgary based oil and natural gas company working in the Western Canadian and Williston sedimentary basins that has delivered a long history of returns and dividends (distributions). Zargon’s business is focused on oil exploitation projects that profitably increase oil production and recovery factors from existing oil reservoirs.
In order to learn more about Zargon, we encourage you to visit Zargon’s website at www.zargon.ca where you will find a current shareholder presentation, financial reports and historical news releases.
Zargon Oil & Gas Ltd.
President and Chief Executive Officer