Zargon Oil & Gas Ltd. provided production guidance for the third and fourth quarter of 2014 and full year of 2015. The company provided third and fourth quarter 2014 oil and liquids production rate guidance of 4,200 barrels per day. These production guidance levels are reaffirmed.

The fourth quarter 2014 oil volumes are expected to reflect a minor contribution from the Little Bow ASP production volumes. The company continue to forecast a 2014 year end ASP exit production rate of 150 barrels per day. Third and fourth quarter natural gas production guidance was set at 10.2 million cubic feet per day and 6.4 million cubic feet per day, respectively.

These third and fourth quarter volumes have now been adjusted to 10.8 million cubic feet per day and 6.8 million cubic feet per day, respectively. Company's 2015 oil and liquids production guidance is set at 4,700 barrels of oil and liquids per day. These volumes are comprised of a stable 4,000 barrels per day from conventional (non-ASP) properties and 700 barrels per day of incremental tertiary recovery production from the Little Bow ASP property.

The Little Bow incremental ASP production volumes are expected to grow significantly throughout the year and are forecast to average 250,500,850 and 1,200 barrels per day for the sequential 2015 quarters. Natural gas volumes are forecast to average 6.4 million cubic feet per day in 2015. Company's 2015 capital budgets has been set at $46 million and includes $13 million of Little Bow ASP chemical costs, $2 million of phase 1 optimization costs, $6 million of Little Bow ASP phase 2 development costs, plus $25 million of conventional (non-ASP) field capital expenditures directed to existing oil exploitation projects.

Depending on the corporate cash flows realized throughout the 2015 calendar year, the conventional capital program may be increased or decreased in order to maintain stable debt levels after the payment of dividends. Zargon's 2014 total capital budget has been increased from $52 million to $57 million (before net dispositions of $12 million). This budget includes $11 million of Little Bow ASP chemical costs, $8 million of ASP phase 1 construction and sanctioning costs, $2 million of ASP phase 1 optimization costs, plus $36 million of conventional (non-ASP) field capital expenditures directed to existing oil exploitation projects.

Following $34 million of capital expenditures in the first half of the year, the remaining second half expenditures of $23 million are anticipated to be roughly equally divided between the third and fourth quarters. The increase in the 2014 capital program reflects additional costs for phase 1 ASP optimizations and the acceleration of some conventional projects into the lower cost pre-winter period. For the upcoming winter months, non-ASP field activities will be kept to a minimum.