CALGARY, Alberta, Jan. 10, 2019 (GLOBE NEWSWIRE) -- Zargon Oil & Gas Ltd. ("Zargon" or the
"Company") (TSX:ZAR; ZAR.DB.A) announces that 82.64% of holders ("Debentureholders") of its 8.00%
convertible unsecured subordinated debentures due December 31, 2019 (the "Debentures") voting at the extraordinary
meeting of the Debentureholders held today (the "Meeting") have voted in favour of an extraordinary resolution
pursuant to which all of the Debentures will be settled and all claims of the Debentureholders thereunder will be extinguished in
exchange for approximately 428,878,324 common shares ("Common Shares") in the capital of Zargon, including the
payment, in the form of Common Shares, of the accrued and unpaid interest owing on the Debentures (the "Exchange
Transaction"). The report on voting for the Meeting will be available under Zargon's profile on the SEDAR website at
www.sedar.com. Closing of the Exchange Transaction is scheduled for January 11, 2019 (“Closing”).
Immediately before the Exchange Transaction, approximately 30,932,912 Common Shares will be issued and
outstanding. Following the completion of the Exchange Transaction, approximately 459,811,236 Common Shares will be issued and
outstanding.
The Exchange Transaction significantly enhances the prospects and flexibility of the Company to pursue
strategic, value-enhancing transactions which may include a corporate merger, sale, recapitalization or reorganization. Following
Closing, the Company will have reduced its overall debt by $41.94 million and its annual interest burden by $3.36 million,
resulting in a simplified capital structure with only US$3.5 million of term debt remaining outstanding (see Nov 2, 2018 press
release).
As a result, Zargon’s Board of Directors has renewed its strategic alternatives process to seek outcomes that
will maximize value for the Company and its stakeholders. Zargon’s long-life, low-decline oil exploitation assets have significant
upside potential in a period of prolonged higher oil prices. In addition, Zargon brings a TSX listing and more than $155 million of
non-capital losses that could have significant value in a more favourable Canadian energy investment climate. Zargon also
previously commenced marketing its North Dakota assets in December 2018, assisted by Energy Advisors Group (formerly PLS).
For further information, please contact:
C.H. Hansen
President and Chief Executive Officer
Zargon Oil & Gas Ltd.
Telephone: 403-264-9992
E-mail: zargon@zargon.ca
Website: www.zargon.ca
FORWARD LOOKING STATEMENTS
This news release contains certain forward-looking information and statements within the meaning of applicable
securities laws. The use of any of the words "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project",
"should", "plan", "intend", "believe" and similar expressions (including the negatives thereof) are intended to identify
forward-looking information or statements. In particular, but without limiting the foregoing, this news release contains
forward-looking information and statements pertaining to the Company's strategic initiative process and the effect of the Exchange
Transaction on Zargon's prospects and flexibility to pursue strategic, value-enhancing transactions.
The forward-looking information and statements included in this news release are not guarantees of future
performance and should not be unduly relied upon. Such information and statements involve known and unknown risks, uncertainties
and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking
information or statements including, without limitation: those relating to results of operations and financial condition; general
economic conditions; industry conditions; changes in regulatory and taxation regimes; volatility of commodity prices; escalation of
operating and capital costs; currency fluctuations; the availability of services; imprecision of reserve estimates; geological,
technical, drilling and processing problems; environmental risks; weather; the lack of availability of qualified personnel or
management; stock market volatility; the ability to access sufficient capital from internal and external sources; competition from
other industry participants for, among other things, capital, services, acquisitions of reserves, and undeveloped lands and skilled
personnel. Risks are described in more detail in our Annual Information Form and other public documents, which are available on
www.zargon.ca and on www.sedar.com. Forward-looking statements are provided to allow investors to have a greater understanding of
our business.
You are cautioned that the assumptions used in the preparation of such information and statements, including,
among other things: future oil and natural gas prices; future capital expenditure levels; future production levels; future exchange
rates; the cost of developing and expanding our assets; our ability to obtain equipment in a timely manner to carry out development
activities; our ability to market our oil and natural gas successfully to current and new customers; the impact of increasing
competition; the availability of adequate and acceptable debt and equity financing and funds from operations to fund our planned
expenditures; our ability to add production and reserves through our development and acquisition activities; and the receipt, in a
timely manner, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance
should not be placed on forward-looking statements. Our actual results, performance, or achievement could differ materially from
those expressed in, or implied by, these forward-looking statements. We can give no assurance that any of the events anticipated
will transpire or occur, or if any of them do, what benefits we will derive from them. The forward-looking information and
statements contained in this document is expressly qualified by this cautionary statement. Our policy for updating forward-looking
statements is that Zargon disclaims, except as required by law, any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
