Oil Exploitation

Zargon's core business is the exploitation (increasing recovery factors) of existing oil reservoirs through enhanced recovery methods, development drilling or production optimizations. We focus on smaller and technically complex, but very profitable oil exploitation projects that tend to be overlooked by our larger competitors. In particular, we are excited about the Little Bow Alkaline Surfactant Polymer ("ASP") tertiary recovery project. Click here to view our ASP presentation.

Oil Production Weighting

Since Q4 2007, Zargon has been focused on oil weighted acquisitions and exploitation projects and has successfully increased its oil production weighting from 42 percent to 62 percent as reported in Q1 2012 (6:1 equivalency). This trend is expected to continue in 2012.

Zargon's Dividend Policy

Zargon is committed to deliver a steady, but supportable dividend. Dividend payout levels are ultimately targeted to be 35% of cash flow and should not exceed 50% of cash flow for an extended period of time.

•   By retaining at least 50% of our cash flow for capital programs, we can efficiently develop long term oil exploitation projects at the Little Bow, Hamilton Lake, Killam, Taber and Williston Basin properties that have been partially de-risked and clearly justify significant additional capital.

•   Consistent with this dividend policy, Zargon reduced the October 2011 monthly dividend to $0.10 per common share. At this new level and at current prices we have the resources to maintain our dividend and fund our ongoing oil exploitation programs.