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NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR:   ZARGON OIL & GAS

TSX SYMBOL: ZAR

AUGUST 20 2001 - 15:45 EDT

Zargon Announces Issuance Of Final Prospectus Receipt


Zargon Oil & Gas Ltd. ("Zargon") of Calgary is pleased to announce
that the Corporation has obtained a receipt for its final
prospectus from the Alberta Securities Commission, on behalf of the
securities commissions in each of the provinces of Alberta, British
Columbia, Manitoba, Ontario and Quebec. The prospectus qualifies
for distribution 2,000,000 Common Shares issuable upon the deemed
exercise of 2,000,000 previously issued Special Warrants. The
deemed exercise of the Special Warrants will occur effective 5:00
p.m. (MST) on August 27, 2001, being five (5) business days from
the issuance of the receipt for the prospectus.

The Special Warrants were issued by way of private placement on
June 26, 2001 at a price of $7.05 per Special Warrant for gross
proceeds of $14,100,000.

FOR FURTHER INFORMATION CONTACT:

Craig H. Hansen
President & CEO
(403) 264-9992
www.zargon.ca







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