Cygam Energy Inc.
TSX VENTURE : CYG

Cygam Energy Inc.

October 14, 2009 09:00 ET

Cygam Signs an Agreement With a Large U.S. Independent Oil and Natural Gas Company for the Bazma Permit, Tunisia

CALGARY, ALBERTA--(Marketwire - Oct. 14, 2009) - Cygam Energy Inc. (TSX VENTURE:CYG) ("Cygam" or the "Corporation") is pleased to announce that its wholly owned subsidiary, Rigo Oil Company Limited ("Rigo"), has signed an Option and Farm-in Agreement ("the Agreement") with a large U.S. independent oil and natural gas company ("the U.S. Company") for the Bazma permit ("the Permit"), located onshore in central Tunisia and encompassing an area of 1,616 km2 (approximately 400,000 acres).

Under the terms of the Agreement, the U.S. Company has agreed to reprocess existing 2D seismic data and acquire new 2D seismic data on the Permit. The U.S. Company will also have the option to conduct a 3D seismic survey and the option of earning an interest by drilling a deep well on the Permit. If, during the term of the Agreement, Cygam decides to drill a well to test the shallower Triassic Tagi formation, the U.S. Company has also the option to participate in the costs of drilling such a well.

Rigo currently holds a 100% interest in all formations in the Bazma permit.

Under pre-existing agreements and upon earning by two current partners, (Canoel International Energy Ltd. ("Canoel") and Timgad Energy ("Timgad")), Rigo will have a 79% working interest (inclusive of a 12.7% carried interest) in the Triassic Tagi formation.

The interests currently being held in trust for Canoel and Timgad will be allocated to those companies after they fulfil their participation commitment to drill a well into the Frida structure to test the Triassic Tagi formation and their interest below the Triassic Tagi formation will be proportionally adjusted if the U.S. Company exercises its option to drill the deep well.

Drilling operations at the Frida structure to test the Triassic Tagi formation are planned for mid-2010, subject to rig availability. This well is scheduled to be drilled to a total depth of approximately 2,500 metres at a location approximately 6 km from the Tarfa-1 producing well and in close proximity (5 km) to an existing pipeline.

Cygam is delighted to have signed an Agreement with the U.S. Company to conduct additional seismic work and possibly drill a deep well on the Permit. The U.S. Company will bring additional significant in-depth experience in the exploration and development of similar plays to the Bazma permit, which will be very beneficial to the evaluation and potential exploitation of any newly identified reservoir.

Cygam is a Calgary based exploration company with producing exploration properties in Canada and 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". All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding interpretation of seismic and well data, future plans and objectives of Cygam Energy Inc., are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated or expected in such statements. Cygam does not undertake any obligations to update forward-looking statements except as required by applicable securities laws. In particular, there is no assurance that a 3D seismic survey will be conducted or that a deep well will be drilled as the U.S. Company has an option and not an obligation to conduct such activities. As well, various factors can cause delays or prevent the operator from carrying out its production testing and development programs as scheduled, including but not limited to unavailability of equipment, funding and manpower or delays in the operations planned for the Bazma permit. There is no certainty that all the seismic surveys will be completed, or that they will establish a drilling location, or that a well will be drilled, or that hydrocarbons will be discovered in commercial quantities on the permit. 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.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Cygam Energy Inc.
    Dario Sodero
    President and Chief Executive Officer
    (403) 802-6983
    (403) 802-6984 (FAX)
    or
    Cygam Energy Inc.
    Giuseppe Rigo
    Vice President International Exploration
    +(39) 06-390 31336
    giuseppe.rigo@vegaoil.com
    www.cygamenergy.com