Cygam Energy Inc.

TSX VENTURE : CYG


Cygam Energy Inc.

August 12, 2014 20:10 ET

CYGAM Announces Q2 Financial Results and Quarterly Filings

CALGARY, ALBERTA--(Marketwired - Aug. 12, 2014) - 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 Shareholder Report, Interim Financial Results and Management Discussion & Analysis for the three and six months ended June 30, 2014 pursuant to the requirements of the applicable securities laws. These filings may be viewed on the Company's web site (www.cygamenergy.com) or at www.sedar.com.

CYGAM's Q2 results showed the impact of continued strong cashflow arising from the TT Field that is contained within the Bir Ben Tartar ("BBT") Concession in the Sud Remada Permit.

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

    • Gross production from the TT Field averaged 2,688 bopd (236 bopd CYGAM net, post ETAP);
    • Oil net revenue was $2,058,216, compared to $2,267,559 for the three months ended June 30, 2013;
    • Operating netbacks were $70.32 per barrel (on revenue of $118.28 per barrel with operating costs of $47.96 per barrel);
    • Net loss of $1,199,106 compared to compared to a loss of $626,911 for the three months ended June 30, 2013;
    • The June 30, 2014 results included a provision of $339,498 with respect to oil export taxes in Tunisia, which the Company expects to recover from ETAP but has expensed due the uncertainty of timing of recovery, and an impairment provision of $432,960 relating to certain equipment and inventory in Tunisia.

A more detailed discussion of the results is included in the MD&A and report to shareholders, available on the Company's web site or SEDAR.

SELECTED FINANCIAL INFORMATION

Three Months ended
June 30,
Six Months ended
June 30,
2014 2013 2014 2013
Oil sales - Tunisia $ 2,058,216 $ 2,267,559 $ 4,241,077 $ 4,036,951
Other income 246 2,493 1,630 5,912
2,058,462 2,270,052 4,242,707 4,042,863
Operating costs 834,553 662,440 1,521,164 1,116,630
General and administrative 558,040 577,082 1,102,972 1,187,273
Stock based compensation 25,976 31,947 49,480 62,311
Financing costs 239,295 24,708 293,655 46,663
Impairment write-down 432,960 531,032 566,028 531,032
Exploration expense 13,109 48,760 28,921 102,880
Permit penalty - - 3,316,500 -
Export taxes 339,498 - 339,498 -
Depletion and depreciation 814,260 1,020,994 1,668,076 1,742,216
3,257,692 2,896,963 8,886,295 4,789,005
Net loss (1,199,230 ) (626,911 ) (4,643,588 ) (746,142 )
Per share - basic and diluted $ (0.01 ) $ (0.01 ) $ (0.04 ) $ (0.01 )
Total non-current financial liabilities $ 2,134,000 $ - $ 2,134,000 $ -
Total assets $ 20,521,721 $ 20,404,667 $ 20,521,721 $ 20,404,667

OPERATING

Three Months ended
June 30,
Six Months ended
June 30,
2014 2013 2014 2013
Oil revenues $ 2,058,216 $ 2,267,559 $ 4,241,077 $ 4,036,951
Operating costs $ (834,553 ) $ (662,440 ) $ (1,521,164 ) $ (1,116,630 )
Net operating income $ 1,223,662 $ 1,605,119 $ 2,719,913 $ 2,920,321
Depletion and depreciation $ 814,260 $ 1,020,994 $ 1,668,076 $ 1,742,216
Revenue per boe $ 118.28 $ 104.50 $ 118.32 $ 107.52
Operating costs per boe $ 47.96 $ 30.53 $ 42.44 $ 29.74
Operating income per boe $ 70.32 $ 73.97 $ 75.87 $ 77.78

(1) Net operating income and netback are non-IFRS measures. Net operating income and netback is defined as revenue less operating costs.

(2) Since ETAP pays all taxes and royalties from its share of production, net operating income is effectively after tax to the Company.

Outlook

The majority of the planned 2014 capital expenditure program has been completed and fully funded. Remaining minor capital investment for the balance of 2014 related to infrastructure upgrades is expected be funded from cashflow. Excess free cash flow generated will be used to progressively pay down debt.

We remain focussed on risk management of our existing assets and ways to protect and maximize shareholder value. The Company is also considering other strategic alternatives which may include re-financing, merger or outright sale of the Company. No financial advisor has been appointed at this time.

This press release should be read in conjunction with the unaudited consolidated interim financial statements for the three and six month periods ended June 30, 2014 and the associated management's discussion and analysis ("MD&A") for the same period together with the Company's audited consolidated financial statements for the years ended December 31, 2013 and 2012 and management's discussion and analysis (MD&A) for the year ended December 31, 2013, including, without limitation, the cautionary statements regarding forward-looking information contained therein.

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.

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