CYGAM Energy Inc.
TSX VENTURE : CYG

CYGAM Energy Inc.

August 18, 2014 08:00 ET

CYGAM Announces Extension of Sud Tozeur Permit

CALGARY, ALBERTA--(Marketwired - Aug. 18, 2014) - CYGAM Energy Inc. (TSX VENTURE:CYG) ("CYGAM", or the "Company"), an emerging oil and gas company with interests in Tunisia and Italy, announces that it has received approval from the Tunisian authorities for the extension of the Sud Tozeur permit in Tunisia.

Sud Tozeur Exploration Permit (Cygam 100%)

In March 2014, the Company, with the support of ETAP, the Tunisian state oil company, applied to the Ministere de l'Industrie de l'Energie et Des Mines ("DGE") to extend the permit into the First Renewal Period of three years with an expiry date of May 12, 2017. As conditions of the extension, the Company has agreed to the acquisition of 500 km2 of 3D seismic to replace the previous 200 km2 commitment, the drilling of one exploratory well, and the payment of a penalty of US$5.0 million (the "Penalty"). Approval of the extension and associated terms was received on August 14, 2014 from the Comité Consultatif des Hydrocarbures. The payment terms of the Penalty are yet to be negotiated with, and approved by, the Tunisian Ministry of Finance.

In April 2014, Rigo Oil Company Limited ("Rigo"), a wholly owned subsidiary of CYGAM, entered into a Sale and Purchase Agreement with YNG Exploration Limited ("YNG"), a private company, whereby YNG will acquire Rigo's 100% interest and all associated commitments in the onshore Sud Tozeur exploration permit in Tunisia. In the event that completion of the transaction does not occur by September 30, 2014, either party may terminate the agreement with 10 days' notice. The transaction is subject to a number of terms and conditions being satisfied including: extension of the permit into the First Renewal Period of three years; carryover and potential increase of the current 3D seismic acquisition commitment into the First Renewal Period; payment of the Penalty in lieu of the undrilled commitment well with this payment being deferred and paid in installments on terms to be agreed with the Tunisian government and Tunisian government approval to transfer the permit to YNG. Compensation to Rigo will consist of YNG paying a total of US$2.0 million of Rigo's Penalty. It is expected that YNG will pay the first and final US$1.0 million installments of the Penalty to the Tunisian authorities on Rigo's behalf. Rigo will retain responsibility for the remaining US$3.0 million of the Penalty installments which, for Rigo, are anticipated to commence in 2015.

Having now received approval of the extension of the permit, work commitments and Penalty, the Company will now seek approval from the Tunisian authorities for the deferred Penalty payment installment schedule and the transfer of the Sud Tozeur permit to YNG.

About CYGAM Energy Inc.

CYGAM is a Calgary based exploration company with extensive international exploration permits and a producing property in Tunisia. The main focus of CYGAM is the acquisition, exploration and development of international oil and gas permits, primarily in Italy and Tunisia. CYGAM currently holds various interests in five exploratory permits in Italy plus two exploratory permits and the BBT Production Concession in Tunisia which together encompass a total of approximately 1.4 million gross acres.

Neither the 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