Cygam Energy Inc.

Cygam Energy Inc.

August 27, 2012 09:00 ET

Cygam Announces Q2 Financial Results and Quarterly Filings

CALGARY, ALBERTA--(Marketwire - Aug. 27, 2012) - CYGAM Energy Inc. (TSX VENTURE:CYG) ("CYGAM", or the "Company"), an emerging oil and gas company with interests in Tunisia and Italy, has filed its Interim Financial Results and Management Discussion & Analysis for the three and six months ended June 30, 2012 pursuant to the requirements of the Canadian Securities Administrators. These documents may be viewed on the Company's web site ( or at

CYGAM's Q2 and year to date results showed significant improvements in both production volumes and revenues over prior years arising from the TT Field that is contained within the Bir Ben Tartar ("BBT") Concession in the Sud Remada Permit. Strong pricing, excellent netbacks and cash flow from its Brent- priced Tunisian oil production resulted in CYGAM's continued profitability in 2012.

Under the production sharing contract established for the Sud Remada Permit with the Tunisian state oil company, Enterprise Tunisienne d'Activities Petrolieres ("ETAP"), CYGAM holds a 14 percent working interest through its wholly owned subsidiary Rigo Oil Company Tunisia Ltd., in partnership with Storm Ventures International, a subsidiary of Chinook Energy Inc. ("Chinook"), who holds the remaining 86 percent working interest and operates.

Highlights of the quarter and year to date
  • Gross production for the three months ended June 30, 2012 from the TT Field averaged 1,928 bopd (170.9 bopd CYGAM net, post ETAP) from eight wells; 2,034 bopd (177.4 bopd CYGAM net, post ETAP) for the six months ended June 30, 2012;

  • Oil net revenue was $905,325 for the three months ended June 30, 2012; $2,990,080 for the six months ended June 30, 2012. At June 30, 2012, 8,631 barrels of oil were held in inventory and were sold in July;

  • Operating netbacks for the three months ended June 30, 2012 were $82.20 per barrel (on revenue of $112.23 per barrel with operating costs of $29.03 per barrel); $88.70 per barrel (on revenue of $117.86 per barrel with operating costs of $29.15 per barrel) for the six months ended June 30, 2012;

  • Income of $245,785 in the second quarter of 2012 increased from a loss of $1,751,090 in the second quarter of 2011;

  • A horizontal well (TT16) was drilled during the second quarter in the BBT Concession and is the first multi-stage, hydraulically fractured horizontal well in Tunisia. This well was completed in mid-July and has been handed over to production with initial rates stabilising at around 800 bopd. Including the TT16 well, gross field production averaged 2,664 bopd over the ten days up to Aug 20, 2012;

  • Subsequent to June 30, 2012, a second horizontal well (TT13) was spudded on July 7, 2012. The well has been drilled to a measured depth of 2,637 metres and completion operations are expected to commence early in September, 2012.

  • In Italy, a new law has been passed modifying the drilling moratorium which allows activities on CYGAM's offshore Elsa discovery and Aretusa prospect to proceed.
Three Months ended June 30, Six Months ended June 30,
2012 2011 2012 2011
Oil sales - Tunisia $ 905,325 $ 153,194 $ 2,990,080 $ 232,326
Other income (147 ) 4,349 838 18,264
905,177 157,543 2,990,919 250,590
Operating costs 236,277 82,569 739,620 133,033
General and administrative 402,104 1,337,118 867,191 1,671,888
Stock based compensation 26,522 461,479 53,044 617,279
Financing costs - - 19,176 3,139
Realized gain (loss) on sale of marketable securities




Impairment recovery (462,564 ) - (462,564 ) -
Loss on sale of evaluation and exploration assets 83,220 - 83,220 -
Depletion and depreciation 355,641 25,773 1,070,866 32,491
659,392 1,908,633 2,370,554 2,372,902
Net income (loss) from continuing operations 245,785 (1,751,090 ) 620,365 (2,122,312 )
Net loss from discontinued operations - (302,458 ) - (332,823 )
Net income (loss) $ 245,785 $ (2,053,548 ) $ 620,365 $ (2,455,135 )
Three Months ended June 30, Six months ended June 30,
2012 2011 2012 2011
Oil revenues $ 905,325 $ 153,194 $ 2,990,080 $ 232,326
Operating costs $ (236,277 ) $ (82,569 ) $ (739,620 ) $ (133,033 )
Net operating income $ 669,048 $ 70,625 $ 2,250,460 $ 99,293
Depletion and depreciation $ 355,641 $ 25,773 $ 1,070,866 $ 32,491
Revenue per boe $ 111.23 $ 111.41 $ 117.86 $ 112.02
Operating costs per boe $ 29.03 $ 60.05 $ 29.15 $ 64.14
Operating income per boe $ 82.20 $ 51.36 $ 88.70 $ 47.87
(1) Net operating income and netback is a non-GAAP measure.
(2) Since ETAP pays all taxes and royalties from its share of production, net operating income is effectively after tax to the Company.

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. In particular, this news release contains, without limitation, forward-looking statements pertaining to future operations to be completed by the Operator at the TT13 location and the timing thereof and CYGAM's plan to progress the Elsa and Aretusa Field projects.

With respect to the forward-looking statements contained in this news release, CYGAM has made assumptions regarding, among other things: the ability of the Operator to continue to operate in Tunisia with limited logistical, security and operational issues and the ability of the Operator to obtain equipment in a timely manner to carry out drilling and completion operations. 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 the 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 Operator's Tunisian operations, 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, 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, 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 in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website ( 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.

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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