Zargon Oil & Gas Ltd.
TSX : ZAR

Zargon Oil & Gas Ltd.

April 07, 2011 09:09 ET

Zargon Oil & Gas Ltd. Announces Closing of $39 Million Bought Deal Financing

CALGARY, ALBERTA--(Marketwire - April 7, 2011) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES

Zargon Oil & Gas Ltd. ("Zargon") (TSX:ZAR) is pleased to announce that it has closed its previously announced offering (the "Offering") of 1,725,000 common shares on a bought deal basis (including 225,000 common shares issued pursuant to the exercise in full of the over-allotment option granted to the underwriters) at $22.60 per share for total gross proceeds of $38,985,000. The syndicate of underwriters was co-led by Scotia Capital Inc., CIBC World Markets Inc. and Peters & Co. Limited and included TD Securities Inc. and FirstEnergy Capital Corp.

The net proceeds of the Offering will be used by Zargon to reduce outstanding borrowings under its existing credit facilities, to partially fund its 2011 capital expenditure program, including potential corporate and asset acquisitions and for general working capital purposes.

Purchasers of common shares under the Offering, who continue to hold such common shares, will be eligible to receive the dividend anticipated to be paid on May 16, 2011 to holders of record on April 30, 2011.

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 an applicable exemption from the registration requirements of such Act. 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 use of the net proceeds of the Offering and payment of and eligibility to receive dividends. 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. You are cautioned that the assumptions, including among other things, future oil and natural gas prices; future capital expenditure levels; future production levels; future exchange rates; the cost of developing and expanding Zargon's assets; ability to obtain equipment in a timely manner to carry out development activities; ability to market Zargon's oil and natural gas successfully to current and new customers; the impact of increasing competition; ability to obtain financing on acceptable terms; and Zargon's ability to add production and reserves through development and acquisition activities, 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 such forward-looking statements. Zargon's actual results, performance, or achievement could differ materially from those expressed in, or implied by, these forward-looking statements Zargon can give no assurance that any of the events anticipated will transpire or occur, or if any of them do, what benefits will be derived therefrom. The forward-looking information contained in this document is expressively qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date hereof and Zargon's policy for updating forward-looking statements is that 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.

ABOUT ZARGON

Based in Calgary, Alberta, Zargon's securities trade on the Toronto Stock Exchange and there are currently approximately 29.0 million common shares (ZAR) (after completion of the Offering) outstanding.

Zargon Oil & Gas Ltd. is a Calgary based oil and natural gas company working in the Western Canadian and Williston sedimentary basins with a long history of earnings and distributions/dividends. Zargon's smaller size and technical focus provides a unique opportunity to deliver profitable oil exploitation results from smaller oil projects that may be overlooked by larger competitors.

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
    J.B. Dranchuk
    Vice President, Finance and Chief Financial Officer
    403-264-9992
    zargon@zargon.ca
    www.zargon.ca