ZARGON ENERGY TRUST
TSX : ZAR.UN

ZARGON ENERGY TRUST
Zargon Oil & Gas Ltd.
TSX : ZAR

Zargon Oil & Gas Ltd.
Rival Energy Ltd.
TSX VENTURE : RGY

Rival Energy Ltd.

January 23, 2008 13:08 ET

Zargon Energy Trust Completes Plan Of Arrangement With Rival Energy Ltd.

CALGARY, ALBERTA--(Marketwire - Jan. 23, 2008) - Zargon Energy Trust ("Zargon") (TSX:ZAR.UN) (TSX:ZOG.B) and Rival Energy Ltd. ("Rival") (TSX VENTURE:RGY) today closed the previously announced Plan of Arrangement (the "Arrangement"). Under the Arrangement, approximately 573,276 Zargon trust units were issued and $16.4 million in cash was paid for the acquisition of all the issued and outstanding Rival common shares.

Currently, Rival's production is approximately 1,020 barrels of oil equivalent per day ("boe/d") which consists of 650 barrels per day of crude oil and 2.22 million cubic feet per day of natural gas. Approximately 63 percent of Rival's current production is from the operated Bellshill Lake oil property which is located within Zargon's Alberta Plains core area, just south of Jarrow, Zargon's largest producing property. The Rival acquisition brings oil development drilling opportunities at Bellshill Lake, seismically defined oil exploration opportunities at the Bellshill Lake and Morinville, Alberta properties, natural gas exploration locations at Robsart, Saskatchewan, and high volume lift oil exploitation projects at Bellshill Lake. In support of this acquisition, Zargon hedged 500 barrels per day of crude oil production for calendar 2008 and 2009 at an average price of US$87.01 per barrel.

With the closing of the Arrangement, Zargon reconfirms its 2008 guidance at 9,750 boe/d, which is premised on a $60 million capital budget that is currently allocated $29 million to the Alberta Plains, $17 million to the Williston Basin and $14 million to the West Central Alberta core areas.

FORWARD-LOOKING STATEMENTS

This press release contains statements that are forward-looking, such as those relating to results of operations and financial condition, capital spending, financing sources, commodity prices, costs of production and the magnitude of oil and natural gas reserves. By their nature, forward-looking statements are subject to numerous risks and uncertainties that could significantly affect anticipated results in the future and, accordingly actual results may differ materially from those predicted. The forward-looking statements contained in this press release are as of January 23, 2008 and are subject to change after this date. Readers are cautioned that the assumptions 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. 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.

Boes 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.

ABOUT ZARGON

Based in Calgary, Alberta, Zargon's securities trade on the Toronto Stock Exchange and there are currently approximately 17.662 million trust units (ZAR.UN) (after giving effect to the Arrangement) and 2.071 million exchangeable shares (ZOG.B) outstanding. After giving effect to the conversion privilege of the exchangeable shares and the January 15, 2008 revised exchange ratio there would be a total of approximately 20.367 million trust units outstanding.

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 unitholder presentation, financial reports and historical news releases.

Contact Information

  • Zargon Energy Trust
    Mr. C.H. Hansen
    President and Chief Executive Officer
    (403) 264-9992
    or
    Mr. B.C. Heagy
    Executive Vice President and Chief Financial Officer
    (403) 264-9992
    Email: zargon@zargon.ca
    Website: www.zargon.ca