Zargon Oil & Gas Ltd. ("Zargon" or the "Company") (TSX:ZAR)(TSX:ZAR.DB.A) -
FINANCIAL AND OPERATING HIGHLIGHTS (THREE MONTHS ENDED MARCH 31, 2017)
In a December 12, 2016 capital budget press release, Zargon provided 2017 guidance levels of 2,500 barrels of oil equivalent per day. Actual first quarter volumes of 2,579 barrels of oil equivalent per day exceeded guidance levels by three percent, and guidance levels are maintained at 2,500 barrels of oil equivalent per day for the remainder of the year. These guidance levels are predicated on our $7.80 million 2017 capital program, of which $2.51 million was spent in the 2017 first quarter.
Strategic Alternatives Process Update
In 2015, Zargon announced the formation of a Special Board Committee (the "Committee") to examine alternatives that would maximize shareholder value in a manner that would recognize the Company's fundamental inherent value related to Zargon's long-life, low-decline conventional oil assets and the significant long term oil potential related to the Little Bow ASP project.
Last year's $92.04 million of property sales and this year's partial repayment and amendment of Zargon's convertible debentures were a partial outcome of this process. With the debenture restructuring and elimination of bank debt now completed, the strategic alternatives process is continuing. and may include a sale of the Company or a portion of the Company's assets, a restructuring of the Company's current capital structure, the addition of capital to further develop the potential of the assets, a merger, a farm-in or joint venture, or other such options as may be determined by the Company's Board of Directors to be in the best interests of the Company and its stakeholders. Zargon's Special Board Committee has engaged Macquarie Capital Markets Canada Ltd. ("Macquarie") as its exclusive financial advisor related to this component of its strategic alternatives process. The Company has not set a definitive schedule to complete its evaluation and no decision on any particular alternative has been reached at this time. Zargon does not intend to disclose developments with respect to this process unless and until the Board of Directors has approved a definitive transaction or other course of action or otherwise deems disclosure of developments is appropriate or otherwise required by law. There are no guarantees that the process will result in a transaction of any form or, if a transaction is entered into, as to its terms or timing.
Zargon is a Calgary-based oil and natural gas company working in the Western Canadian and Williston sedimentary basins and is focused on oil exploitation projects (water floods and tertiary ASP) 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
SOURCE: Zargon Oil & Gas Ltd.
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