Zargon Oil & Gas Ltd. report the sanctioning of the construction of the Little Bow Alkaline Surfactant Polymer (ASP) tertiary recovery facility, provide an operational update, provide 2013 guidance and report its 2012 year end reserves. Zargon intends to release its 2012 audited financial results on March 12, 2013, after market close.

• Zargon is sanctioning the construction of its tertiary recovery ASP oil exploitation project at the Little Bow oil property in Southern Alberta. This ASP project entails the injection of large volumes of a dilute chemical solution into a partially depleted oil reservoir to recover incremental oil reserves. With sanctioning, phases 1 and 2 of the Little Bow ASP project will be Canada's ninth operational ASP project.

• After three years of preparation, Zargon is now ready to proceed with the construction phase of the Little Bow project. In particular, the Energy Resources Conservation Board ("ERCB") regulatory scheme approval has been obtained, detailed engineering design has been completed, long lead time and large equipment orders have been placed and Class 3 construction cost estimates have been prepared. The project entails the construction of a water softening plant, chemical handling/mixing facilities and water injection facilities. In addition, there will be oil battery upgrades, pipeline replacements/upgrades, water injector conversions and well reactivations.

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