ZARGON ENERGY TRUST
TSX : ZAR.UN

ZARGON ENERGY TRUST

May 14, 2009 15:24 ET

Zargon Energy Trust to Issue $32 Million of Trust Units

CALGARY, ALBERTA--(Marketwire - May 14, 2009) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Zargon Energy Trust ("Zargon" or the "Trust") (TSX:ZAR.UN) today announced that it has entered into an agreement with a syndicate of underwriters, led by CIBC, (the "Underwriters"), under which the Underwriters have agreed to purchase on a bought deal basis, and Zargon has agreed to issue from treasury, 2,150,000 trust units (the "Trust Units") at a price of $15.00 per Trust Unit for total gross proceeds of $32.25 million (the "Offering"). The Trust has also granted the Underwriters an over-allotment option to purchase up to an additional 10% of the total issue of Trust Units, at the same price, exercisable in whole or part at closing or until 30 days following closing of the Offering.

The net proceeds of the Offering will be used by Zargon to reduce outstanding borrowings under existing credit facilities, to partially fund the 2009 capital expenditure program, and for general corporate purposes.

The Trust Units will be offered to the public via short form prospectus in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia and Newfoundland. Closing of the Offering is expected to occur on or about June 5, 2009.

The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

ADVISORY: This press release contains forward looking statements. More particularly, this press release contains statements concerning the anticipated closing date of the offering and the anticipated use of the net proceeds of the offering. Although Zargon believes that the expectations reflected in these forward looking statements are reasonable, undue reliance should not be placed on them because Zargon can give no assurance that they will prove to be correct. Since forward looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. The closing of the offering could be delayed if Zargon is not able to obtain the necessary regulatory and stock exchange approvals on the timelines it has planned. The offering will not be completed at all if these approvals are not obtained or some other condition to the closing is not satisfied. Accordingly, there is a risk that the offering will not be completed within the anticipated time or at all. The intended use of the net proceeds of the offering by Zargon might change if the board of directors of Zargon determines that it would be in the best interests of Zargon to deploy the proceeds for some other purpose, such as an acquisition.

The forward looking statements contained in this press release are made as of the date hereof and Zargon undertakes no obligations to update publicly or revise any forward looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

ABOUT ZARGON

Based in Calgary, Alberta, Zargon's securities trade on the Toronto Stock Exchange and there are currently approximately 20.07 million trust units (ZAR.UN) and 1.849 million exchangeable shares (ZOG.B) outstanding. After giving effect to the conversion of the exchangeable shares and the May 15, 2009 revised exchange ratio there would be a total of approximately 22.88 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
    Craig H. Hansen
    President and Chief Executive Officer
    (403) 264-9992
    or
    Zargon Energy Trust
    Brent C. Heagy
    Executive Vice President and Chief Financial Officer
    (403) 264-9992
    zargon@zargon.ca
    www.zargon.ca