Welcome!

News Feed Item

Zargon Oil & Gas Ltd. Discusses Alberta Energy's Enhanced Oil Recovery Royalty Changes and Provides a Little Bow ASP Flood Project Update

CALGARY, ALBERTA -- (Marketwired) -- 07/28/14 -- Zargon Oil & Gas Ltd. (TSX:ZAR)(TSX:ZAR.DB) ("Zargon") reports that the revisions to the Enhanced Oil Recovery ("EOR") royalty program announced last week by Alberta Energy will have a positive impact on the economics of Zargon's Alkaline Surfactant Polymer ("ASP") enhanced oil recovery project at Little Bow in Southern Alberta.

Zargon is currently reviewing the details of Alberta's modified EOR Crown royalty program (see announcement at www.qp.alberta.ca/documents/orders/orders_in_council/2014/714/2014_335.html for further details), which effectively bring the Alberta conventional oil EOR royalties more in line with existing Alberta oil sands (in-situ) and Saskatchewan conventional oil EOR royalty programs.

Zargon's initial estimates indicate the terms of the revised EOR program could increase Zargon's full cycle rate of return of the first two phases of the Little Bow ASP project by up to 5 percent (to 22 percent) and increase the discounted cash flow (PVBT 10 percent) of phases 1 and 2 of the Little Bow project by up to $30 million. In Zargon's most recent year end 2013 reserve report, Zargon's independent reserves evaluator McDaniel & Associates Consultants Ltd., assigned 4.48 million barrels of proved and probable oil and liquids reserves and an incremental discounted cash flow (PVBT 10 percent) of $66.3 million to phases 1 and 2 of the Little Bow project. Subsequent to the effective date of the McDaniel report, Zargon has spent more than $12 million of McDaniel future development capital for project construction, commissioning and more than three months of injection.

Since initial ASP injection commenced in late March, Zargon has injected approximately 1 million barrels of ASP solution into the phase 1 area of the Little Bow Mannville I Pool, at an average injection rate of 102 percent of design capacity. Encouragingly, pattern injection rates are balanced and are meeting or exceeding reservoir models, and we have observed no evidence of premature breakthrough.

ASP injection to date constitutes nearly 4 percent of the reservoir hydrocarbon pore volume ("HCPV"). We are targeting an ASP injection volume of 30 percent of the HCPV followed by a polymer only injection volume of 40 percent of the HCPV. Our analysis predicts a 12 percent ASP incremental oil recovery factor and peak incremental oil rates of 1,700 barrels of oil per day in 2017 for the Little Bow phases 1 and 2 project area. Phase 2 ASP injection is scheduled to begin in the summer of 2016.

The early project data pertaining to injection rates, voidage replacement and the lack of breakthrough (and related early oil production volumes) imply encouraging reservoir conformance and support our estimates of incremental oil recovery and peak production rates. However, with no sign of early breakthrough, the timing of first oil volumes is delayed. We are now predicting negligible Little Bow phase 1 volumes in 2014 with a year end 2014 rate of 150 barrels of oil per day (previously 350 barrels of oil per day). Incremental production is expected to average 700 barrels of oil per day in 2015 (previously 900 barrels of oil per day) and then increase to an unchanged 1,550 barrels of oil per day in 2016, once phase 2 production begins. Follow up phases 3 and 4 will commence after phase 1 and 2 injections are completed. Without further plant debottlenecking or expansions, Zargon's combined Little Bow project (phases 1 though 4) total production is expected to stabilize at more than 2,200 barrels of oil per day in the 2021 through 2023 period. The long-life stable production profile of the ASP project is well suited for Zargon's dividend-paying business model. For further information regarding the Little Bow ASP project, please refer to the company's corporate presentation, which is available at the www.zargon.ca.

Based in Calgary, Alberta, Zargon's securities trade on the Toronto Stock Exchange and there are currently 30.134 million common shares outstanding.

FORWARD-LOOKING STATEMENTS

This press release offers our assessment of Zargon's future plans and operations as at July 28, 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 interpretation of the revised Alberta EOR royalty scheme; 
    
--  our estimates of economics, reserves, production and timing thereof, and
    costs for the Little Bow ASP project; 
    
--  our plans for our Little Bow ASP project and the results therefrom; and 
    
--  our business plans and strategy. 

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.

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 www.zargon.ca where you will find a current shareholder presentation, financial reports and historical news releases.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Fact is, enterprises have significant legacy voice infrastructure that’s costly to replace with pure IP solutions. How can we bring this analog infrastructure into our shiny new cloud applications? There are proven methods to bind both legacy voice applications and traditional PSTN audio into cloud-based applications and services at a carrier scale. Some of the most successful implementations leverage WebRTC, WebSockets, SIP and other open source technologies. In his session at @ThingsExpo, Da...
"Once customers get a year into their IoT deployments, they start to realize that they may have been shortsighted in the ways they built out their deployment and the key thing I see a lot of people looking at is - how can I take equipment data, pull it back in an IoT solution and show it in a dashboard," stated Dave McCarthy, Director of Products at Bsquare Corporation, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
@DevOpsSummit taking place June 6-8, 2017 at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @DevOpsSummit at Cloud Expo New York Call for Papers is now open.
Predictive analytics tools monitor, report, and troubleshoot in order to make proactive decisions about the health, performance, and utilization of storage. Most enterprises combine cloud and on-premise storage, resulting in blended environments of physical, virtual, cloud, and other platforms, which justifies more sophisticated storage analytics. In his session at 18th Cloud Expo, Peter McCallum, Vice President of Datacenter Solutions at FalconStor, discussed using predictive analytics to mon...
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
@GonzalezCarmen has been ranked the Number One Influencer and @ThingsExpo has been named the Number One Brand in the “M2M 2016: Top 100 Influencers and Brands” by Onalytica. Onalytica analyzed tweets over the last 6 months mentioning the keywords M2M OR “Machine to Machine.” They then identified the top 100 most influential brands and individuals leading the discussion on Twitter.
"We are an all-flash array storage provider but our focus has been on VM-aware storage specifically for virtualized applications," stated Dhiraj Sehgal of Tintri in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
In IT, we sometimes coin terms for things before we know exactly what they are and how they’ll be used. The resulting terms may capture a common set of aspirations and goals – as “cloud” did broadly for on-demand, self-service, and flexible computing. But such a term can also lump together diverse and even competing practices, technologies, and priorities to the point where important distinctions are glossed over and lost.
All clouds are not equal. To succeed in a DevOps context, organizations should plan to develop/deploy apps across a choice of on-premise and public clouds simultaneously depending on the business needs. This is where the concept of the Lean Cloud comes in - resting on the idea that you often need to relocate your app modules over their life cycles for both innovation and operational efficiency in the cloud. In his session at @DevOpsSummit at19th Cloud Expo, Valentin (Val) Bercovici, CTO of Soli...
"We're a cybersecurity firm that specializes in engineering security solutions both at the software and hardware level. Security cannot be an after-the-fact afterthought, which is what it's become," stated Richard Blech, Chief Executive Officer at Secure Channels, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
"IoT is going to be a huge industry with a lot of value for end users, for industries, for consumers, for manufacturers. How can we use cloud to effectively manage IoT applications," stated Ian Khan, Innovation & Marketing Manager at Solgeniakhela, in this SYS-CON.tv interview at @ThingsExpo, held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
Join Impiger for their featured webinar: ‘Cloud Computing: A Roadmap to Modern Software Delivery’ on November 10, 2016, at 12:00 pm CST. Very few companies have not experienced some impact to their IT delivery due to the evolution of cloud computing. This webinar is not about deciding whether you should entertain moving some or all of your IT to the cloud, but rather, a detailed look under the hood to help IT professionals understand how cloud adoption has evolved and what trends will impact th...
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, discussed the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.