Zargon Oil & Gas Ltd. reported earnings and production results for the first quarter of 2017. For the quarter, the company's funds flow from operating activities were $1.5 million compared to negative $400,000 reported in first quarter of 2016. The year-over-year increase in funds flow is primarily due to Zargon's sharply higher first quarter 2017 field oil price of $49.30 per bbl, up 74% from the first quarter 2016 field oil price of $28.27 per bbl. Net loss was $540,000 versus a loss of $8.82 million for the three months ended March 31, 2016. Capital expenditures were $2.51 million and were primarily allocated to oil exploitation costs relating to recompletions, reactivations and waterflood/ASP optimizations. These first quarter expenditures included $890,000 of Little Bow ASP project costs.

For the quarter, the company's production averaged 2,579 boe per day, a 385 decrease from the 2016 first quarter rate of 4,176 boe per day that included the company's southeast Saskatchewan and selected Alberta assets that were sold in the third quarter of 2016. Oil and liquids production represented 78% of Zargon's total production based on a 6:1 equivalent basis.

For the remainder of 2017, the company is budgeting $5.29 million of capital expenditures that is anticipated to completely offset the impact of Zargon's base production decline rate of less than 10% per year.