Zargon Oil & Gas Ltd ZARFF

RE:ZAR can sell nat gas assets (AECO at C$2.50) & RF the notes

[rad10]

stockfy wrote: I see some cluless posts on this board that show that some posters are novice investors without understanding the basics in the sector.

First ZAR's debt is not bank debt, ZAR's debt is in convertible notes that mature in December 2019, not this year.

Also ZAR's convertible notes can be refinanced before December 2019. ZAR does not need to re-invent the wheel here. Numerous companies refinance their convertible debt buying time in order to sell some of their assets at better prices and record gains.

ZAR can refinance its convertible notes in early 2019 and replace them with new notes maturing in 2021 (if it does not want to convert it into shares) and buy time.

When the oil spreads in Canada narrow by early 2019, it can sell some of its assets at premium assets.

Note that its Noth Dakota  oily asset has been printing cash because it is not  affected by the Canadian oil spreads but receives premium Bakken pricing.

Note also that AECO jumped at C$2.50 per mcf yesterday because the pipeline damage at Prince George was fixed by ENB yesterday. ZAR produces more than 10% dry natural gas, so it can sell its natural gas weighted properties at  good prices now with the stabilization of AECO. Outlook for natural gas in Canada is very positive too, so AECO will remain at these levels. Henry Hub hit $3.50 in the U.S. yesterday and we are still at the very beginning of the winter.

OK so if they have so much wiggle room - how come there is a new tranche of secured debt against the US assets - the only one with inherent value in this environment? and how come the convertible secured is selling at 50 cents on the dollar? If they are going to be refinanced in the conventional way - at parity - the debentures are the bargain of the century and should be scooped up like home baked cooking. I am respectful of all posters here - but the fact is the convertible debentures can't be refinanced and Zargon will soon be unable to make the interest payments. I can assure you there will be a recapitalisation - hence the insider selling of the common shares. Only CH holds the convertibles and he released some into the dutch auction last year. PS - if you are right and I am wrong I will buy you a steak dinner in December of 2019 because I will have made out like a bandit......