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Little Bow ASP Project Update

September, 2013

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Advisory – Forward-Looking Information

Forward-Looking Statements - This presentation offers our assessment of Zargon's future plans and operations as at September 1, 2013, and contains 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 presentation contains forward-looking information as to Zargon’s corporate strategy and business plans, Zargon’s ASP oil exploration project inventory and development plans, Zargon’s capital expenditure program and the allocation and the sources of funding thereof, ASP production and other guidance and the assumptions contained therein, Zargon’s reserve estimates, Zargon’s drilling, development and exploitation plans and projects and the results there from and Zargon’s ASP project plans, capital expenditures, costs and the results therefrom. 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. 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 presentation 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. Barrels of Oil Equivalent - Natural gas is converted to a barrel of oil equivalent (“Boe”) using six thousand cubic feet of gas to one barrel of oil. In certain circumstances, natural gas liquid volumes have been converted to a thousand cubic feet equivalent (“Mcfe”) on the basis of one barrel of natural gas liquids to six thousand cubic feet of gas. Boes and Mcfes may be misleading, particularly if used in isolation. A conversion ratio of one barrel to six thousand cubic feet of natural gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion ratio on a 6:1 basis may be misleading as an indication of value. The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation. Estimated reserve values disclosed in this presentation do not represent fair market value. Discovered Petroleum Initially-In-Place (“DPIIP”) is that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of discovered petroleum initially in place includes production, reserves, and contingent resources; the remainder is unrecoverable.The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserves additions for that year.

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Little Bow ASP Zargon Development Vision

The ASP Facility being constructed at Little Bow is the hub of a phased Enhanced Oil Recovery program, targeting multiple oil pools, and

providing significant oil reserves and investor returns.

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Little Bow Alkaline Surfactant Polymer (“ASP”) Project

Enhanced Oil Recovery Using Proven Technology

• EOR in a mature, southern Alberta Waterflood• Project Capital: $60 Million (excludes chemical)

o $18.8 million incurred through Q2 2013 (From 2012/01)

o $29 million in H2 2013 to Phase 1 Startupo 2015: $12 million (Phase 2)

• Current Little Bow Oil 400 bbl/d• First ASP Injection Q1 2014

• Zargon Forecast Incremental Oil Rate:2014 Exit: 500 bbl/d2016 avg: 1,350 bbl/d 2018 avg: 1,600 bbl/d

• Zargon Forecast Incremental Oil Recovery: 4.9 Million Barrels (12% DPIIP)

Little Bow ASP: Phase 1&2 Development

Little Bow

Alberta 15-18W4

Zargon Land

Zargon Wells

Zargon Land

Zargon Wells

Phase 1 Area

Phase 2 Area

Phase 1 Area

Phase 2 Area

Little Bow Mannville “P” Pool

Little Bow Mannville “I” Pool

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2009 Little Bow assets acquired from Masters Energy Inc.2010 Reservoir Studies2011 Lab Work, Facilities Scoping Studies2012 Well workovers, Detailed Engineering,

Key Equipment Orders; Reservoir Study Update2013 Construction: Facilities and Pipelines, Chemical Supply2014 ASP Injection Commences

Little Bow ASPProject Evolution

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Little Bow ASPPhases 1 & 2 Capital Costs

• Phase 1 costs: $6.5 million in 2012 and $42.0 million in 2013.• Phase 2 costs occur in 2014 and 2015.• Capital reported in “as spent” dollars.

Phase 1 Phase 2 Total($ millions) ($ millions) ($ millions)

ASP Facility 30.0 1.7 31.7

Battery 9.5 3.2 12.7

Pipelines 2.2 3.2 5.4

Water Disposal/Source 1.5 0.0 1.5

Subsurface/Surface/other 4.3 4.2 8.5

47.5 12.3 59.8

ASP Chemical 32.6 34.0 66.6

Total 80.1 46.3 126.4

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Little Bow ASPKey Project Services and Suppliers

Lab work and SimulationASP formulation SURTEK Colorado, USA ASP formulation Weatherford Labs Calgary, AlbertaReservoir modeling and simulation CMG Calgary, Alberta

EngineeringEngineering, Procurement & Construction Mgmt Wood Group PSN Calgary, Alberta

Major Equipment Supplier ExamplesWater Treatment Equipment (De-oiling) Ecodyne Ltd. Burlington, OntarioWater Treatment Equipment (De-oiling) Siemens Energy Inc. Louisiana, USAWater Treatment Equipment (Softening) Anderson Water Systems Inc. Dundas, OntarioPolymer Preparation and Injection Equipment SNF Inc. Georgia, USATanks Argo Sales Calgary, AlbertaSpecialty Tanks Precisioneering Ltd. Scarborough, Ont.Process Pumps National Oilwell Varco Edmonton, AlbertaProcess Pumps Schlumberger Canada Calgary, AlbertaEquipment Packaging/Buildings CADO Industries Calgary, Alberta

Executing an ASP project involves specialized laboratory studies, facility design and equipment. Zargon benefits from the Increasing numbers of commercial ASP projects and the resulting industry experience.

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Zargon Land

Zargon Wells

Zargon Land

Zargon Wells

Zargon Land

Zargon Wells

Phase 1 Area

Phase 2 Area

Phase 1 Area

Phase 2 Area

Little Bow ASP: Phase 1&2 Development Areas

Travers Gas Plant16-31 Battery

Little Bow ASP Facility

Little Bow ASPASP Facility Site

The Little Bow ASP Facility will be adjacent to the existing Zargon Gas Plant and Oil Battery

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Q1 2013• Zargon sanctions construction of Little Bow

ASP Facility• Little Bow field pipeline upgrades

Q2 2013• ASP Facility Site Preparation Begins

Q3 2013• ASP Site preparation & Piling completed• Majority of Tanks and Equipment delivered

to site

Q4 2013• Mechanical / Electrical Construction• ASP Chemical Supply Contracts• Well Tie-ins• Service Wells• Operator Training

Little Bow ASPRecent and Upcoming Project

Milestones

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Little Bow ASP FacilityConstruction Progress Update

June 6, 2013

July 31, 2013

August 28, 2013

ASP site preparation is underway.Rain and wet conditions slows progress.

ASP Site & Road constructed. Piling is complete.

Two thirds of the tanks and equipment are delivered.

field of view

Travers Gas Plant16-31 Battery

ASP Facility

Travers Gas Plant16-31 Battery

ASP Facility

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Little Bow ASP Project Update

September, 2013