CALGARY, ALBERTA–(Marketwired – Jan. 19, 2015) – Zargon Oil & Gas Ltd. (TSX:ZAR) (TSX:ZAR.DB) (“Zargon” or the “Company”) announces fourth quarter 2014 production volumes, provides a Little Bow Alkaline Surfactant Polymer (“ASP”) project update and reaffirms 2015 production guidance.
Fourth Quarter 2014 Production Volumes
Zargon’s fourth quarter 2014 oil and liquid production volumes averaged 4,150 barrels per day and slightly exceeded guidance levels of 4,100 barrels per day. Zargon’s fourth quarter 2014 natural gas production volumes averaged 6.43 million cubic feet per day and essentially matched guidance levels of 6.50 million cubic feet per day.
The oil and liquid production volumes were positively impacted by the fourth quarter 2014 drilling program of three Williston Basin wells located at Steelman, Saskatchewan and Mackobee Coulee, North Dakota and two Alberta Plains South wells at Taber, Alberta. Fourth quarter 2014 production volumes were reduced by the mid-December sale of the Hamilton Lake property that had been 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.
Little Bow ASP project update
In March 2014, Zargon commenced injection of large volumes of dilute chemical solution into the partially depleted Little Bow Mannville I pool to recover substantial incremental oil reserves. To date, 3.0 million barrels of ASP solution has been injected into the first phase of the project. This injection volume is equal to about 10 percent of the targeted reservoir pore volume, and represents 14 percent of the total chemical bank (ASP and polymer only) scheduled to be injected in the phase 1 operations.
Zargon continues to be encouraged by the injection and production data for the Little Bow ASP project. Current phase 1 production volumes have increased to approximately 280 barrels of oil per day and now exceed the pre-ASP waterflood baseline rate of 250 barrels of oil per day. For further information regarding the Little Bow ASP production, reserves and ultimate potential, please refer to the updated corporate presentation available on the Company’s website.
Production Guidance Reaffirmed
In the December 22, 2014 press release, Zargon provided first quarter 2015 and year average 2015 conventional production (non-ASP) production guidance of 4,000 and 3,800 barrels of oil and liquids per day, respectively. ASP production was forecast to ramp up in 2015 by producing 100, 250, 500 and 750 in the successive 2015 quarters with an average rate of 400 barrels of oil per day during the year. Natural gas volumes were forecast to average 5.0 and 4.8 million cubic feet per day in the 2015 first quarter and 2015 year, respectively. These production guidance levels are reaffirmed.
Based in Calgary, Alberta, Zargon’s securities trade on the Toronto Stock Exchange and there are currently 30.253 million common shares outstanding.
This press release offers our assessment of Zargon’s future plans and operations as at January 19, 2015, 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;
- our expectations for our plans with respect to our Little Bow ASP project;
- our expectations for Q4 2014 production volumes; and
- our expectations for future production volumes.
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