Zargon Oil & Gas Ltd. reported production results for the fourth quarter of 2015. For the quarter, the company reported production averaged 3,635 barrels of oil and liquids per day, essentially unchanged from the preceding quarter rate of 3,633 barrels of oil and liquids per day. During the quarter, increased Little Bow ASP tertiary oil volumes offset declines from Zargon's conventional properties. Reflecting the economic shut-ins of minor non-operated natural gas properties, fourth quarter 2015 natural gas production averaged 4.23 million cubic feet per day, a 20% decline from the preceding quarter's rate of 5.28 million cubic feet per day. Total production averaged 4,340 barrels of oil equivalent per day, a 4% decrease from the preceding quarter. During the quarter, oil and liquids production represented 84% of total production on a 6:1 equivalent basis. Actual fourth quarter volumes essentially met guidance and were 3,635 barrels of oil and liquids per day and included 223 barrels of oil per day of incremental ASP oil production, up from 100 and 75 barrels of oil per day in the 2015 third and second quarters, respectively.

For 2015, the company reported unaudited capital expenditures totaled approximately $25 million (excluding $0.6 million relating to final statement of adjustments for prior year dispositions) and was allocated 76% to the Little Bow ASP project with $12 million (unaudited) allocated to ASP chemical costs and $7 million (unaudited) to ASP exploitation costs. The remaining $6 million (unaudited) of capital expenditures were allocated to minor waterflood and facility modifications that continue to enable Zargon to have an industry low base oil production decline of 13% per year.

For 2016, the company expects capital budget will be reduced to $9 million and will comprise of $3 million of conventional expenditures, $1 million of ASP exploitation expenditures and $5 million for ASP chemical (mostly Polymer) costs. Natural gas volumes are forecasted to average 3.90 million cubic feet per day in 2016.