Zargon Oil & Gas Ltd.
TSX : ZAR

Zargon Oil & Gas Ltd.

February 18, 2011 16:03 ET

Zargon Oil & Gas Ltd. Announces Canadian Tax Treatment of 2010 Distributions

CALGARY, ALBERTA--(Marketwire - Feb. 18, 2011) - Zargon Oil & Gas Ltd. ("Zargon") (TSX:ZAR) successfully completed the plan of arrangement pursuant to which Zargon Energy Trust (the "Trust") converted from an income trust into a dividend-paying corporation on December 31, 2010. Zargon today releases information for the Trust that, for Canadian tax reporting purposes, all distributions paid to unitholders with Record Dates in the 2010 taxation year are taxable.

The information contained herein is based on Zargon's understanding of the Canadian Income Tax Act and is provided for general information purposes only. Unitholders should consult their tax advisors with respect to their particular circumstances.

UNITS HELD WITHIN AN RRSP, RRIF, RESP, TFSA OR DPSP

With respect to units of the Trust held in an individual's Registered Retirement Savings Plan (RRSP), Registered Retirement Income Fund (RRIF), Registered Education Savings Plan (RESP), Tax Free Savings Account (TFSA) or Deferred Profit Sharing Plan (DPSP) during 2010, no amount should be reported on the individual's 2010 Income Tax Return ("T1").

UNITS HELD OUTSIDE AN RRSP, RRIF, RESP, TFSA OR DPSP

Unitholders who held their trust units outside an RRSP, RRIF, RESP, TFSA or DPSP will receive a T3 Supplementary Slip for 2010 ("T3") that will report all such distributions as "other income" in Box 26 of the T3. Registered unitholders will receive a T3 slip from Zargon's transfer agent, Valiant Trust Company, while beneficial unitholders who held units through intermediaries will receive a T3 slip from the intermediary.

FOR CANADIAN TAXPAYERS

The following table summarizes, on a monthly basis, distributions with record dates in 2010 to unitholders, indicating that the full amount is taxable and no portion is considered to be a return of capital.

Record Date   Payment Date   Taxable Amount (Other Income)   Return of Capital   Total Cash Distribution
                       
January 31, 2010   February 15, 2010   $ 0.18   $ 0.00   $ 0.18
February 28, 2010   March 15, 2010   $ 0.18   $ 0.00   $ 0.18
March 31, 2010   April 15, 2010   $ 0.18   $ 0.00   $ 0.18
April 30, 2010   May 17, 2010   $ 0.18   $ 0.00   $ 0.18
May 31, 2010   June 15, 2010   $ 0.18   $ 0.00   $ 0.18
June 30, 2010   July 15, 2010   $ 0.18   $ 0.00   $ 0.18
July 31, 2010   August 16, 2010   $ 0.18   $ 0.00   $ 0.18
August 31, 2010   September 15, 2010   $ 0.18   $ 0.00   $ 0.18
September 30, 2010   October 15, 2010   $ 0.18   $ 0.00   $ 0.18
October 31, 2010   November 15, 2010   $ 0.18   $ 0.00   $ 0.18
November 30, 2010   December 15, 2010   $ 0.18   $ 0.00   $ 0.18
December 31, 2010   January 17, 2011   $ 0.18   $ 0.00   $ 0.18
                       
    Total   $ 2.16   $ 0.00   $ 2.16

Based in Calgary, Alberta, Zargon's securities trade on the Toronto Stock Exchange (TSX) under the symbol "ZAR". 

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 shareholder presentation, financial reports and historical news releases.

Contact Information

  • Zargon Oil & Gas Ltd.
    C.H. Hansen
    President and Chief Executive Officer
    403-264-9992
    or
    Zargon Oil & Gas Ltd.
    J.B. Dranchuk
    Vice President, Finance and Chief Financial Officer
    403-264-9992
    zargon@zargon.ca
    www.zargon.ca