| Zargon Oil & Gas Ltd. - ZAR.t core competency is oil exploitation. The application of technology to increase the recovery of oil in existing reservoirs. It is a technically complex business and each oil reservoir is treated differently depending on the interrelationships of the reservoir rock, fluids, pressures, wells and surface facilities. Zargon works in all three phases of oil reservoir exploitation: primary, secondary and, more recently, tertiary recovery projects. |  |
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On December 2, 2013 the company reported News
Zargon Oil & Gas Ltd. (TSX:ZAR)(TSX:ZAR.DB) ("Zargon") has closed an additional $12.0 million of dispositions in two separate transactions since our November 13, 2013 press release. Production from these properties totaled approximately 240 barrels of oil per day and 0.50 million cubic feet of natural gas per day. The oil properties are located in the Grand Forks area of southern Alberta, and the natural gas properties are located in the Peace River Arch area of northern Alberta. Both properties are mature assets and are not included in the five high-graded conventional (non-Alkaline Surfactant Polymer ("ASP")) oil exploitation projects that will form the basis of our conventional exploitation drilling programs during the next few years.
With these property dispositions, Zargon has closed approximately $35 million (cash) of property dispositions in 2013, a level that considerably exceeds the $20 million of property dispositions originally budgeted for 2013. Subsequent to the closing of these additional property sales, Zargon has reaffirmed that committed syndicated credit facilities remain unchanged with a borrowing base of $165 million. Including Zargon's $57.5 million convertible debenture (face value), available credit totals $222.5 million. At September 30, 2013, Zargon's debt, net of working capital (excluding unrealized derivative assets/liabilities) but including the convertible debenture was $117.6 million.
For the foreseeable future, Zargon will continue to actively pursue property dispositions that improve our profitability and operational focus by selling (or trading away) non-strategic properties. Over time, we anticipate that these dispositions will enable Zargon to realize a lower cost structure through a disciplined focus on a growing tertiary ASP oil recovery business and the stable production volumes coming from the measured exploitation of five conventional long-life low-decline core oil properties.
 
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