Zargon Oil & Gas Ltd. provided production guidance for the first quarter and full year of 2015 and capital expenditure guidance for 2015. The company provided first quarter 2015 and year average 2015 conventional (non-ASP) production guidance of 4,000 and 3,800 barrels of oil and liquids per day, respectively. With the reduced 2015 conventional capital budgets, these estimates are revised to average 3,900 and 3,700 barrels of oil and liquids per day in the 2015 first quarter and 2015 year average, respectively. Natural gas volumes were forecast to average 5.0 and 4.8 million cubic feet per day in the 2015 first quarter and 2015 year, respectively, and are now adjusted slightly to average 5.2 and 4.9 million cubic feet per day in the 2015 first quarter and 2015 year, respectively. Similarly, incremental Little Bow ASP production had been forecast to ramp-up in 2015 by producing 100, 250, 500 and 750 in the successive 2015 quarters with an average rate of 400 barrels of oil per day during the year. This forecast has now been revised to 30, 150, 330 and 520 in the successive 2015 quarters with an average rate of 260 barrels of oil per day during the year.

The company provided an updated 2015 capital budget of $32 million, which allocated $20 million to ASP related expenditures and $12 million to conventional capital expenditures. Recognizing the continuing challenges presented by the 2015 oil price environment, the company have completed a capital budget reassessment and have reduced the total 2015 capital budget from $32 million to $25 million. Specifically, Zargon's conventional projects are more price dependent and consequently, the 2015 conventional capital budget has been decreased from $12 million to $8 million and will focus on projects related to waterflood expansions and modifications plus operating cost reductions. The company analysis continues to show strong returns and recycle rates for ASP chemical injections at current and lower oil prices. Consequently, the 2015 phase 1 ASP budget has now been set at $17 million and is comprised of $12 million of chemical costs and the above mentioned $5 million of remedial and optimization costs. Phase 2 construction costs of $12 million have been deferred by six months and are projected to commence in early 2016.