Cygam Energy Inc.
TSX VENTURE : CYG

Cygam Energy Inc.

August 27, 2010 09:00 ET

Cygam Energy Inc. Announces Filing of Second Quarter Financial Statements and MD&A and Provides an Update on Tunisian and Italian Permits

CALGARY, ALBERTA--(Marketwire - Aug. 27, 2010) - CYGAM Energy Inc. ("CYGAM" or the "Corporation") (TSX VENTURE:CYG) has filed unaudited consolidated financial statements for the quarter ended June 30, 2010, management discussion and analysis (MD&A) and additional information required to be filed pursuant to the requirements of the Canadian Securities Administrators. Copies of these documents can be accessed electronically through the SEDAR system at www.sedar.com.

Cygam is also pleased to advise that, as reported by Chinook Energy Inc. ("Chinook", formerly Storm Ventures International), "drilling of the TT3 appraisal well at Sud Remada will proceed in early October". The TT3 well will be located approximately 2.3 km south-west of the TT2 discovery well on the 67 km2 TT structure. Chinook also advised that it hopes to have an agreement and approvals in support of the first phase of commercial development early in 2011, as well as follow up exploration potential on the El Bell structure which has been identified on existing seismic. The undrilled El Bell structure covers an area of approximately 74 km2 and is located approximately 17 km north-east of the TT2 discovery well. Cygam will participate for its 14% direct working interest in all the appraisal, development and exploratory operations on the Sud Remada permit.

At Bazma, Cygam has recently granted an extension to November 1st, 2010, for the First Exclusivity Period of the Option and Farm-In Agreement ("the Agreement") signed on October 12, 2009, with a large U.S. independent oil and natural gas company ("the U.S. Company"). This extension was requested by the U.S. Company to complete the interpretation of a large amount of seismic data acquired on the permit. Under the terms of the Agreement, as amended, the U.S. Company is required to notify Cygam of its election to conduct a 3D seismic survey or earn an interest by drilling a deep well on the permit during a fourteen days period ending November 1, 2010.

At Sud Tozeur, Cygam has recently finalized detailed seismic interpretation in the eastern portion of the permit, adjacent and immediately north of the El Franig production concession operated by Perenco, a large private French company. Seismic has indicated the presence of one structure with conventional and unconventional Silurian and Ordovician potential immediately north of the El Franig field plus several other structures on the permit. Referring to the El Franig field, Perenco reported on their website that "On 22 March fraccing occurred at a total depth of 4000m in well #1 in the Hamra Quarzite reservoir. Approximately 45 tonnes of ceramic sand were pumped into the formation, opening an estimated 500 ft fracture. The subsequent first well test results confirm the potential for doubling current gas production to 10 mmscfd, with possible further increases once the clean-up operation has been completed. On March 23, fraccing occurred at a total depth of 3950m in well #5 in the Silurian gas shales reservoir. 600 m3 of water charged with thin sand were pumped into the source rock formation, generating a dense complex of micro-fractures. This is the first fraccing of shale gas in North Africa, designed to assess the possible development for additional reserves on the El Franig field". The Sud Tozeur permit, located in west-central Tunisia near the Algerian border, covers an area of 4,380 square kilometres (1,082,283 acres). Cygam currently holds a 100% interest in the permit which will be reduced to a 89% working interest (inclusive of 7.7% free carried interest) once an existing joint venture partner earns an interest in the permit by fulfilling a drilling obligation.

In Italy, the Legislative Decree no. 128, proposed by the Minister of the Environment on June 29, 2010 in reaction to the BP oil spill in the Gulf of Mexico, became effective on August 26. If implemented as written, the Decree would prohibit, among other things, offshore exploration and production activities within 5 miles from the Italian coastline or within 12 miles from the boundary of protected areas. The proposed Elsa 2 well location on the B.R 268 permit is approximately 3.8 miles from the coastline. However, given that there are exemptions to the Decree which the Corporation believes may be applicable, it remains unclear whether the Decree prohibits drilling of the Elsa 2 well. A meeting is scheduled in early September between representatives of the Ministry of Environment, the Ministry of Economic Development, Assomineraria (the Association of Italian explorers and producers), and oil and gas exploration companies. Cygam will request clarification from the Italian authorities regarding the interpretation and validity of the Decree in relation to the Elsa project. The Corporation, through its legal counsel, also plans to investigate its legal position in respect to all the exploration expenditures already incurred on the project since the permit was officially awarded. In the meantime, the operator has submitted an application to the Ministry of Economic Development to "freeze" the permit and therefore extend its drilling deadline.

In the next few months the Corporation expects to complete a comprehensive regional geological and geophysical assessment onshore and offshore Sicily and then commission an independent resource report on the C.R148.VG permit in compliance with the requirements of the Canadian National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities. The large Aretusa structure and other targets identified on the C.R148.VG (Aretusa) permit offshore Sicily lie beyond the five mile limit mentioned in Decree no. 128.

CYGAM is a Calgary based exploration company with producing exploration properties in Canada and Tunisia plus extensive international exploration permits. The main focus of the Corporation is the acquisition, exploration and development of international oil and gas permits, primarily in Italy, Tunisia and the Mediterranean Basin. CYGAM currently holds various interests in six exploratory permits in Italy and four exploratory permits in Tunisia encompassing approximately over 3.5 million gross acres (approximately 1.8 million net acres before pending farm-outs). Visit the CYGAM website at www.cygamenergy.com for more information about CYGAM.

This News Release includes certain "forward-looking statements". There can be no certainty that appraisal drilling, development and exploratory drilling at Sud Remada will occur when stated, or that the U.S. Company will elect to conduct a 3D seismic survey or drill a deep well at Bazma, or that results similar to El Franig can be attained at Sud Tozeur. There can be no certainty that the legislative changes proposed by the Ministry of Environment will be implemented as initially written, or that the environmental approval will be attained, or that the Elsa 2 well will be drilled or that the geological and geophysical assessment onshore and offshore Sicily will be completed as planned. Cygam does not undertake any obligations to update forward-looking statements except as required by applicable securities laws. Important factors that could cause actual results to differ materially from Cygam's expectations are risks detailed herein and from time to time in the continuous disclosure filings made by Cygam with securities regulators on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • CYGAM Energy Inc.
    Dario Sodero
    President
    (403) 802 6983
    or
    CYGAM Energy Inc.
    Giuseppe Rigo
    Executive Chairman and CEO
    + (39) 06 390 31336
    or
    CYGAM Energy Inc.
    Ali Rawji
    CFO
    (403) 802 6983