Cygam Energy Inc.

TSX VENTURE : CYG


Cygam Energy Inc.

December 10, 2012 08:15 ET

Cygam Announces Private Placement Offerings for Proceeds of Up to $15 Million

CALGARY, ALBERTA--(Marketwire - Dec. 10, 2012) -

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CYGAM Energy Inc. (TSX VENTURE:CYG) ("CYGAM", or the "Company"), an emerging oil and gas company with interests in Tunisia and Italy, announces it is proceeding with (i) a non-brokered private placement of units of the Company ("Units") at a price of $1,000 per Unit for a maximum of $7.5 million in gross proceeds (the "Unit Offering") and (ii) a non-brokered private placement of common shares of the Company ("Common Shares") at a price of $0.35 per share for a maximum of $7.5 million in gross proceeds (the "Share Offering" and together with the Unit Offering the "Private Placement"). There will be 135.1 million Common Shares outstanding if the Share Offering is fully subscribed for (excluding any Common Shares issuable pursuant to the Warrants (as defined below)).

Each Unit will consist of $1,000 principal amount of unsecured debentures of the Company (the "Debentures") and 1,000 common share purchase warrants of the Company (the "Warrants"). The Debentures will mature on December 31, 2017, bear interest at a rate of 10% payable quarterly in arrears commencing on March 31, 2013. The Debentures may be redeemed at the option of the Company at any time after December 31, 2015, in whole or in part from time to time, on not more than 60 days and not less than 30 days prior notice, at a price equal to their principal amount plus accrued and unpaid interest to, but excluding, the date fixed for redemption.

Each Warrant will entitle the holder to acquire one Common Share at a price of $0.50 per share on or before December 31, 2015, unless (i) during the period commencing on the date that is four months following the issue date and ending on December 31, 2015, the daily volume weighted average trading price of the Common Shares on the TSX Venture Exchange (or such other stock exchange where the majority of the trading volume occurs) exceeds $0.75 for each day of a period of 20 consecutive trading days, and (ii) the Company gives the holders of the Warrants written notice of such occurrence within 30 days of such occurrence, in which case the Warrants will expire at 4:00 pm (Calgary time) on the 30th day following the giving of such notice.

The Company intends to use the proceeds raised to support the ongoing field development program in the Bir Ben Tartar Concession, exploration activities in the Sud Remada permit in Tunisia and for general corporate purposes.

The Units and Common Shares will be offered by way of private placement to accredited investors under applicable securities laws in the Provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario and such other jurisdictions as the Company may determine. The Common Shares, Debentures, Warrants and Common Shares issuable on the exercise of the Warrants will be subject to a hold period of four months and one day from the closing date as well as other restrictions with respect to sales from control positions.

The Private Placement is expected to be completed by December 31, 2012 (or other dates as agreed to by the Company and the subscribers, provided that such date is no later than 60 days following the date of this news release) and is subject to certain customary conditions and regulatory approvals, including the approval of the TSX Venture Exchange. The Company may elect to pay finders' fees payable in cash to arm's length parties in connection with the Private Placement as permitted under the policies of the TSX Venture Exchange.

About CYGAM Energy Inc.

CYGAM is a Calgary based exploration company with extensive international exploration permits and producing properties in Tunisia. The main focus of the Company 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 seven exploratory permits in Italy and three exploratory permits in Tunisia encompassing approximately 2.7 million gross acres.

Forward Looking Information

In the interest of providing shareholders and potential investors with information regarding CYGAM, including management's assessment of the future plans and operations of CYGAM, certain statements contained in this news release constitute forward looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "could", "plan", "intend", "should", "believe", "outlook", "potential", "target" and similar words suggesting future events or future performance. In particular, this news release contains, without limitation, forward-looking statements pertaining to: the number of Units, Common Shares and Warrants to be issued; the gross proceeds and the use thereof; the terms of the Warrants and Debentures; and the closing date of the Private Placement.

With respect to the forward-looking statements contained in this news release, CYGAM has made assumptions regarding, among other things: the timing of closing of the Private Placement; the receipt of regulatory approval; current industry conditions; and the general economic conditions in North America, Tunisia, Italy and globally; future capital expenditure levels; future oil and natural gas prices; ability to obtain equipment in a timely manner to carry out exploration and development activities. Although CYGAM believes that the expectations reflected in the forward-looking statements contained in this news release, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this news release, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that predictions, forecasts, projections and other forward-looking statements will not occur, which may cause CYGAM's actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward looking statements. These risks and uncertainties include, without limitation: political and security risks associated with the Tunisian operations; risks associated with the operation of CYGAM's assets by third parties, including the limited ability of CYGAM to exercise influence over the operation of those assets or their associated costs, the timing and amount of capital expenditures, the approval of other participants, and the selection of technology and risk management practices; risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve and resource estimates, the continued impact of shut-in production, environmental risks, competition from other producers, inability to retain drilling rigs and other services, capital expenditure costs, including drilling, completion and facilities costs, unexpected decline rates in wells, delays in projects and/or operations resulting from surface conditions, wells not performing as expected; delays resulting from or inability to obtain the required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Readers are cautioned that the forgoing list of factors is not exhaustive. Additional information on these and other factors that could affect CYGAM's operations and financial results are included reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) and at CYGAM's website (www.cygamenergy.com). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and CYGAM does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities issued pursuant to the Private Placement described herein have not been and will not be registered under the United States Securities Act of 1933 and may not be offered or sold in the United States except in transactions exempt from such registration.

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.

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