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Zargon Oil & Gas Ltd ZARFF

Zargon Oil & Gas Ltd is a producer of oil and gas. It is engaged in the exploration, development, and production of oil and natural gas in Canada and the United States. The company works on three phases of oil reservoir exploitation which include Primary recovery, Waterflood recovery, and Tertiary recovery. Its portfolio includes Alberta plains north, Alberta plains south and Williston basin projects.


GREY:ZARFF - Post by User

Comment by PetroExploreron Nov 13, 2018 8:19pm
69 Views
Post# 28969287

RE:ZAR and Facts (debentures, oil spreads, AECO at new highs)

RE:ZAR and Facts (debentures, oil spreads, AECO at new highs)I agree that the outlook for AECO, is looking a bit brighter, which might be enough to give the extra cashflow boost.  Still a difficult time with the low oil price, but hopefully things will sort themselves out, if there are some cutbacks like Cenovus wants.

Let's be careful with the fear-mongering out there, that shareholders are done.  There still is a chance here, depending on what the oil prices do.  And let's consider some facts about the debentures:

1.  $41.94 million outstanding, is big, but not insurmountable, provided there is value with higher prices.  There could still be room for some shareholder equity.

2.  Craig Hansen owns $470K of debentures, as well as shares, so he will look for a win-win scenario, for both sides (hopefully).

3.  The last extension, was proposed on February 14, 2017, for the debentures expiring on June 30, 2017.  Expiry was exteded till December 31, 2019.  I just don't see a proposal coming out, in the first half of 2019, based on the previous extension's tiiming.

4.  Next interest payment isn't due until March 31, 2019. Looks difficult right now, but the next two months could give some hope, if oil prices increase.  Even if they don't make the interest payment, it isn't a sure bet that they'll send a restructuring proposal, at that time.

So let's see how this plays out, including the overall viability of the Canadian oil-patch.  At current prices, all companies would be done, so this can't last, for too long.
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