Zargon Oil & Gas Ltd. Announces 2012 First Quarter Cash Dividends

CALGARY, ALBERTA--(Marketwire - Jan. 12, 2012) - Zargon Oil & Gas Ltd. (TSX:ZAR) ("Zargon") today announced that its Board of Directors has approved the current dividend policy of $0.10 per common share per month for the first quarter of 2012, based on the current economic conditions of our business. The monthly cash dividend for the month of January in the amount of Cdn. $0.10 per common share will be paid on February 15, 2012 to shareholders of record on January 31, 2012. The ex-dividend date is January 27, 2012.

Our dividend policy is reviewed monthly and is based on a number of factors including current and future commodity prices, foreign exchange rates, our commodity hedging program, current operations, financial and legal requirements and other conditions existing at such future times. We will continue to carefully monitor the impact of all these issues and adjust our monthly dividend as conditions dictate.

Zargon's 2012 first quarter cash dividend to shareholders of $0.10 per common share per month based on our 2012 guidance is as follows:

Record Date		Ex-Dividend Date		Dividend Payment Date		Dividend Per Share
January 31, 2012		January 27, 2012		February 15, 2012		$0.10
February 29, 2012		February 27, 2012		March 15, 2012		$0.10 (*)
March 31, 2012		March 28, 2012		April 16, 2012		$0.10 (*)

(*) The above reflects an anticipated dividend based on Zargon's current projected commodity prices, commodity hedge positions and production volumes. Dividends are subject to change should there be a material change in expected cash flow for the respective periods.

Unless otherwise indicated, all dividends paid by Zargon are "eligible dividends" for Canadian tax purposes.

Zargon has a Dividend Reinvestment Plan (the "DRIP") which allows eligible shareholders to reinvest their cash dividends in additional common shares which, when issued from treasury, will be issued at 95 percent of the "Average Market Price" (as defined in the DRIP) on the applicable dividend payment date. A complete copy of the DRIP is available on Zargon's website or by calling the Account Manager for Zargon at Valiant Trust Company at [phone] or [phone].

Based in Calgary, Alberta, Zargon's securities trade on the Toronto Stock Exchange and there are currently 29.329 million common shares outstanding.

FORWARD-LOOKING STATEMENTS

This press release offers our assessment of Zargon's future plans and operations as at January 12, 2012, and contains forward-looking statements. All statements other than statements of historical fact may be forward-looking statements. Such statements are generally identified by the use of words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "should", "plan", "intend", "believe" and similar expressions (including the negatives thereof). In particular, this press release contains forward-looking statements pertaining to the following:

• our business plans and strategy;
• projections of market prices and costs and the related sensitivities of dividends;
• supply and demand for oil and natural gas;
• risk management strategy;
• our dividend policy and payment of dividends;
• the sources of funding of our dividends.

By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond our control, including such as 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 and competition from other industry participants for, among other things, capital, services, acquisitions of reserves, undeveloped lands and skilled personnel. Risks are described in more detail in our Annual Information Form, which is available on our website and at .

Forward-looking statements are provided to allow investors to have a greater understanding of our business. You are cautioned that the assumptions, 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, our ability to obtain financing on acceptable terms; and our ability to add production and reserves through our development and acquisition activities used in the preparation of such information, 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 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.

FURTHER INFORMATION

Zargon Oil & Gas Ltd. is a Calgary based oil and natural gas company working in the Western Canadian and Williston sedimentary basins that has delivered a long history of returns, dividends (distributions) and value creation. Zargon's business is focused on oil exploitation projects where we employ a careful reservoir engineering inspired technical approach to profitably increase oil recovery factors from existing oil reservoirs.

In order to learn more about Zargon, we encourage you to visit Zargon's website at where you will find a current shareholder presentation, financial reports and historical news releases.