Zargon Oil & Gas Ltd.

Zargon Oil & Gas Ltd.
Masters Energy Inc.

Masters Energy Inc.

April 29, 2009 16:27 ET

Zargon Energy Trust and Masters Energy Inc. Complete Plan of Arrangement

CALGARY, ALBERTA--(Marketwire - April 29, 2009) - Zargon Energy Trust ("Zargon") (TSX:ZAR.UN) (TSX:ZOG.B) and Masters Energy Inc. ("Masters") (TSX:MSY) today closed the previously announced Plan of Arrangement (the "Arrangement"). Under the Arrangement, approximately 1.475 million Zargon trust units were issued and $5.7 million in cash was paid for the acquisition of all the issued and outstanding Masters common shares. Including the assumption of approximately $13.2 million of net debt (inclusive of adjustments and transaction costs), the total cost of the acquisition was approximately $41.4 million.

The acquisition provides Zargon approximately 1,230 barrels of oil equivalent per day, consisting of 630 barrels per day of oil and 3.60 million cubic feet per day of natural gas, of which approximately 55 per cent is from the operated Little Bow oil property in Southern Alberta. Most importantly, the acquisition provides Zargon a significant Alkaline Surfactant Polymer (ASP) tertiary oil recovery opportunity at the Little Bow property.

Based on Zargon's internal evaluation effective December 31, 2008, Zargon plans on booking 2.60 million barrels of oil equivalent of proved and probable reserves consisting of 1.55 million barrels of oil and 6.3 billion cubic feet of natural gas. These Zargon internal reserve estimates do not include any recognition for the probable and possible reserves relating to the proposed Little Bow ASP tertiary flood. The Masters acquisition also provides Zargon more than 100 thousand net acres of undeveloped Alberta land.


This press release contains statements that are forward-looking, including statements relating to Masters estimated net debt, future ASP opportunities and reserve estimates. These forward-looking statements are based on various assumptions including future capital spending and commodity prices. 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 April 29, 2009 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.


Based in Calgary, Alberta, Zargon's securities trade on the Toronto Stock Exchange and there are currently approximately 20.070 million trust units (ZAR.UN) (after giving effect to the Arrangement) and 1.849 million exchangeable shares (ZOG.B) outstanding. After giving effect to the conversion privilege of the exchangeable shares and the April 15, 2009 revised exchange ratio there would be a total of approximately 22.853 million trust units outstanding.

In order to learn more about Zargon, we encourage you to visit Zargon's website at 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
    Mr. B.C. Heagy
    Executive Vice President and Chief Financial Officer
    (403) 264-9992