Zargon Oil & Gas Ltd Provides Production Guidance for the First Quarter and Full Year of 2015 and Capital Expenditure Guidance for 2015
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.