Cygam Energy Inc.

Cygam Energy Inc.

November 26, 2012 16:33 ET

CYGAM Announces Q3 Financial Results and Quarterly Filings

CALGARY, ALBERTA--(Marketwire - Nov. 26, 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 nine months ended September 30, 2012 pursuant to the requirements of the Canadian Securities Administrators. These documents may be viewed on the Company's web site ( or at An updated corporate presentation is also now available on the Company's web site.

CYGAM's Q3 and year to date results showed continued 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 the third quarter of 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 September 30, 2012 from the TT Field averaged 2,915 bopd (256 bopd CYGAM net, post ETAP) from ten wells; 2,342 bopd (205 bopd CYGAM net, post ETAP) for the nine months ended September 30, 2012;
  • Oil net revenue was $2,977,392 for the three months ended September 30, 2012; $5,967,472 for the nine months ended September 30, 2012;
  • Operating netbacks for the three months ended September 30, 2012 were $78.30 per barrel (on revenue of $105.54 per barrel with operating costs of $27.24 per barrel); $83.22 per barrel (on revenue of $111.38 per barrel with operating costs of $28.15 per barrel) for the nine months ended September 30, 2012;
  • Income of $222,315 in the third quarter of 2012 increased from $137,903 in the third quarter of 2011; For the nine months ended September 30, 2012, income has increased to $842,680 compared to a loss in 2011 of $1,984,409;
  • During the third quarter a first horizontal well (TT16) was brought on to production in mid-July with initial gross rates stabilising at around 800 bopd (70 bopd CYGAM net, post ETAP);
  • During the third quarter a second horizontal well (TT13) was drilled and completed. Production averaged 3,251 bopd (285 bopd CYGAM net, post ETAP) over the first 10 days of production and was subsequently restricted to approximately 1,400 bopd gross due to capacity constraints and limitations on crude oil trucking and surface water handling.
  • The third horizontal well at TT11 was spudded on September 1, 2012 and completion operations commenced on October 22, 2012. Production over the first 17 days averaged 1,199 bopd (105 bopd CYGAM net post ETAP) and the well is currently producing 950 bopd (83 bopd CYGAM net post ETAP).
  • Discussions took place during the quarter relating to the extension of the expiry dates on the Bazma and Sud Tozeur permits (both 100%) in Tunisia. As a result in October the Tunisian authorities approved expiry date extensions to July 26, 2016 for Bazma and May 12, 2014 for Sud Tozeur;
  • In Italy, a new law was passed modifying the previous drilling moratorium which allows activities on CYGAM's offshore Elsa discovery and Aretusa prospect to proceed.


Three Months ended September 30, Nine months ended September 30,
2012 2011 2012 2011
Oil sales - Tunisia $ 2,977,392 $ 1,591,396 $ 5,967,472 $ 1,823,722
Other income 898 6,218 1,736 24,482
2,978,290 1,597,614 5,969,208 1,848,204
Operating costs 768,536 412,434 1,508,156 545,466
General and administrative 653,295 665,806 1,520,486 2,337,694
Stock based compensation 206,474 161,501 259,518 778,780
(Gain) on sale of marketable securities - - - (84,927 )
Financing costs 18,979 2,506 38,155 5,646
Impairment recovery - - (462,564 ) -
Loss on sale of evaluation and exploration assets - - 83,220 -
(Gain) on sale of building (118,258 ) - (118,258 ) -
Depletion and depreciation 1,226,949 217,464 2,297,815 249,954
2,755,975 1,459,711 5,126,528 3,832,613
Net income (loss) from continuing operations 222,315 137,903 842,680 (1,984,409 )
Income (loss) from discontinued operations - 29,908 - (302,915 )
Net income (loss) $ 222,315 $ 167,811 $ 842,680 $ (2,287,324 )


Three Months ended September 30, Nine months ended September 30,
2012 2011 2012 2011
Oil revenues $ 2,977,392 $ 1,591,396 $ 5,967,472 $ 1,823,722
Operating costs $ (768,536 ) $ (412,434 ) $ (1,508,156 ) $ (545,466 )
Net operating income $ 2,208,856 $ 1,178,962 $ 4,459,316 $ 1,278,256
Depletion and depreciation $ 1,226,949 $ 217,464 $ 2,297,815 $ 249,954
Revenue per boe $ 105.54 $ 114.04 $ 111.38 $ 113.77
Operating costs per boe $ 27.24 $ 29.55 $ 28.15 $ 34.03
Operating income per boe $ 78.30 $ 84.48 $ 83.22 $ 79.73
(1) Net operating income and netback is a non-IFRS measure. 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.

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 future Tunisian operations and transactions respecting Cygam's Tunisian assets and the timing thereof.

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, future capital expenditure levels, future oil and natural gas prices, future oil and natural gas production levels, ability to obtain equipment in a timely manner to carry out exploration and development activities, the impact of increasing competition, the ability of Cygam and its partners to add production and reserves through development and exploitation activities, certain commodity price and other cost assumptions, the continued availability of adequate financing and cash flow to fund its planned expenditures. 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 operator's expertise and financial resources, 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 ( and at Cygam's 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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