Zargon Oil & Gas Ltd ZARFF

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

[stockfy]

Some posters here are novice investors without understanding the basics in the sector. Don't let these posters/sellers who sell because ZAR is a tax loss selling candidate cloud your judgement.

 

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

So ZAR's convertible notes can be refinanced before December 2019. ZAR does not need to re-invent the wheel here. Refinancing happens every day in the corporate world. Numerous companies refinance their convertible debt buying time in order to sell some of their assets at premium prices and record significant profits.

 

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 these notes into shares), so it can buy time this way.

 

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

 

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.

 

[ppp]

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 these notes into shares), so it can buy time this way. You think notes that are selling at 50 cents on the dollar are going to get replaced. If management had a brain they would have borrowed a few more dollars and started buying them back starting now. But no

[Philbert77]

Thanks for the post, stockfy. I appreciate the clarification. I have no problem admitting I am a novice in the area of debentures (and oil and gas debentures). So, correct me if I am wrong, converting the debentures into shares is a worst case scenario as it will completely dilute the shares. They would only do this if they were unable to pay the distribution on the debentures?

[Method]

They can pay the interest by issuing shares for the trustee to sell who would then pay the debenture holders. Otherwise they will do it at maturity if they can't get a deal with debenture holders for an extension  or if they don't get purchased by then. I don't agree that the debs are impaired unless they trade at par. Lots of companies debs trade below par. That being said, with

[rad10]

agreed method - the debs are the no brainer in this environment

[ppp]

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. Read more at https://www.stockhouse.com/companies/bullboard?symbol=t.zar&postid=28929407#YdJmat48FY7kVs0H.99 Funny that's not what I read. better go to their outdated presentation and read it. Zargon

[stockfy]

Obviously, you don't understand what you read. Your excerpt talks about ALL their oil properties, including North Dakota. But you ignore the basics. FYI,  North Dakota is located in the U.S., so it receives premium pricing that has nothing to do with the Canadian oil spreads. NO Canadian oil spreads in North Dakota, moron. 

[rad10]

Here is the reality of the situation - we all know how it unfolded............. https://zargon.ca/wp-content/uploads/2019/01/Zargon-Corporate-Presentation-January-24-2019.pdf The ridiculous nature of the posting below is shameful............