Zargon Oil & Gas Ltd. Announces 2014 Year End Reserves and Provides a Little Bow ASP Project Update
(firmenpresse) - CALGARY, ALBERTA -- (Marketwired) -- 02/19/15 -- Zargon Oil & Gas Ltd. (the "Company" or "Zargon") (TSX: ZAR)(TSX: ZAR.DB) announces 2014 year end reserves and provides a Little Bow Alkaline Surfactant Polymer ("ASP") tertiary oil recovery project update. Zargon intends to release its 2014 audited financial results on March 10, 2015, after market close.
2014 YEAR END RESERVES:
DETAILED RESERVE INFORMATION:
Reserves included herein are stated on a gross company working interest basis unless otherwise noted. All reserves information has been prepared in accordance with National Instrument 51-101 Standards of Disclosure ("NI 51-101"). In addition to the detailed information disclosed in this press release, more detailed information will be included in Zargon''s 2014 Annual Information Form to be filed on SEDAR () and posted on our website () in March 2015.
Based on the independent reserves evaluation conducted by McDaniel effective December 31, 2014, and prepared in accordance with NI 51-101, Zargon had proved and probable reserves of 22.29 million barrels of oil equivalent.
A reconciliation summary of the 2014 year end reserve assignments with the reserves reported in the 2013 year end report based on McDaniel''s forecast prices and costs is presented below:
Reserve Reconciliation (All Categories)
On a total proved basis, Zargon added 1.50 million barrels of oil and liquids from revisions and field activities. This gain was partially offset by 0.48 million barrels of property dispositions and the net result was an increase of 1.02 million barrels of oil and liquids reserves. For total proved natural gas reserves, Zargon added 1.65 billion cubic feet from revisions and field activities. This gain was entirely offset by 13.05 billion cubic feet of property sales. On a total proved combined basis Zargon''s 2014 net reserve additions declined by 0.88 million barrels of oil equivalent as a result of 2014 property disposition program. The McDaniel year over year change in the future proved development capital was a $9.8 million reduction ($45.4 million at December 31, 2014, compared with $55.2 million at December 31, 2013).
On a total proved and probable basis, Zargon added 1.05 million barrels of oil and liquids from revisions and field activities. This gain was partially offset by 0.82 million barrels of property dispositions and the net result was a small increase of 0.23 million barrels of oil and liquids reserves. For total proved and probable natural gas reserves, Zargon added 0.87 billion cubic feet from revisions and field activities. This gain was more than offset by 21.21 billion cubic feet of property sales. On a total proved and probable combined basis Zargon''s 2014 net reserve additions (after dispositions) resulted in a decrease of 3.17 million barrels of oil equivalent. The McDaniel year over year changes in the future proved and probable development capital was a $17.7 million reduction ($103.6 million at December 31, 2014, compared with $121.3 million at December 31, 2013).
Reserve Reconciliation (Developed Producing)
Zargon''s reserves are characterized by a high developed producing component and a corresponding high confidence level. Proved developed producing reserves represent 82 percent of total proved reserves and 52 percent of the total proved and probable reserves. The Little Bow ASP project reserves of 4.77 million barrels of oil equivalent represents 68 percent of Zargon''s total proved and probable undeveloped and non-producing reserves of 7.00 million barrels of oil equivalent.
NET ASSET VALUE:
Zargon''s oil, liquids and natural gas reserves were evaluated using McDaniel''s price forecasts effective January 1, 2015, prior to provisions for income taxes, interest, debt service charges, transaction costs and general and administrative expenses. The estimated values of future net revenue disclosed do not represent the fair market value of the reserves.
The following net asset value table shows what is customarily referred to as a "produce-out" net asset value calculation under which the current value of Zargon''s reserves would be produced at McDaniel''s forecast future prices and costs. The value is a snapshot in time as at December 31, 2014, and is based on various assumptions including commodity prices and foreign exchange rates that vary over time. In this analysis, the present value of the proved and probable reserves is calculated at a before tax 10 percent discount rate. In the net asset value calculation, Zargon''s 90 thousand net acres of land is valued at $11.9 million based on the independent firm of Seaton-Jordan & Associates Ltd. valuation as at December 31, 2014.
The following table provides net asset value estimates at December 31, 2014 for all four reserve categories.
LITTLE BOW ASP PROJECT UPDATE:
Forward-Looking Statements - This press release contains forward-looking statements relating to our plans and operations as at February 19, 2015. Forward-looking statements typically use 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 relating, but not limited to: our business strategy, plans and management focus; the timing of release of our 2014 financial results and 2014 Annual Information Form, plans with respect to our Little Bow ASP project, other costs associated with the ASP project and the anticipated results from this project, and sources of funding for our conventional and ASP project capital expenditure program. In addition, all statements relating to reserves, including ASP reserves, in this press release are deemed to be forward-looking as they involve an implied assessment, based on certain assumptions and estimates, that the reserves described, can be properly produced in the future.
By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond our control, 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 will be available on sedar and our website. 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.
Other Advisories - Boe''s may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In addition, given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion ratio on a 6:1 basis may be misleading as an indication of value. The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation.
FURTHER INFORMATION:
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 where you will find a current shareholder presentation, financial reports and historical news releases.
Contacts:
Zargon Oil & Gas Ltd.
C.H. Hansen
President and Chief Executive Officer
403-264-9992
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Datum: 19.02.2015 - 16:01 Uhr
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