Cygam Energy Inc.

Cygam Energy Inc.

November 11, 2013 16:00 ET

CYGAM Announces Q3 Financial Results and Quarterly Filings

CALGARY, ALBERTA--(Marketwired - Nov. 11, 2013) - 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 nine months ended September 30, 2013 pursuant to the requirements of the applicable securities laws. These filings may be viewed on the Company's web site ( or at

CYGAM's Q3 results showed some decline in production volumes and revenues over Q1 and Q2 from the TT Field that is contained within the Bir Ben Tartar ("BBT") Concession in the Sud Remada Permit. Nevertheless, strong pricing, excellent netbacks and cash flow from its Brent-priced Tunisian oil production resulted in CYGAM's continued positive cash flow in the third quarter.

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 from the TT Field during the third quarter averaged 2,469 bopd (217 bopd CYGAM net, post ETAP); for the nine months 2,704 bopd (237 bopd CYGAM net, post ETAP) from twelve producing wells;
  • Oil net revenue during the third quarter was $2,507,719 compared to $2,977,392 in Q3/2012; for the nine months revenue was $6,544,670 compared to $5,967,472 in 2012. There was substantial unsold production held in inventory at the end of the quarter which was subsequently sold at the end of October;
  • Operating netbacks during the third quarter were $73.30 per barrel (on revenue of $111.60 per barrel with operating costs of $38.30 per barrel) compared to $78.30 per barrel in Q3/2012; for the nine months netbacks were $76.10 per barrel (on revenue of $109.05 per barrel with operating costs of $32.95 per barrel) compared to $83.23 per barrel in 2012. The decreases were principally due to lower realized oil sale prices and increased operating costs in Q3 relating to high water disposal costs and equipment rental costs;
  • During the third quarter of 2013 impairment write downs of $2,916,270 were recorded relating to Tunisia. $2,435,600 related to writing down the carrying value of the Sud Tozeur permit due to the uncertainty of being able to recover these costs in the future from operations and $480,670 to write down previously capitalized expenditures in the Sud Remada permit relating to the BJA-2 well drilled in 2012. In addition Exploration expense of $433,521 was recorded relating to the unsuccessful El Bell-1 exploration well in Sud Remada permit;
  • Net loss for the third quarter of $3,611,330 compared to net income of $222,315 in Q3/2012; for the nine months the net loss was $4,357,472 compared to net income of $842,680 in 2012; The losses principally reflect the write downs referred to above;
  • Cash flow from operating activities during the nine months decreased to $2,014,083 compared to $3,168,654 in 2012, reflecting decreased production and cash flow from the TT field;
  • In Italy, activities on CYGAM's Elsa discovery continued with the operator proceeding with seeking permit and regulatory approvals with respect to the appraisal well which is hoped to be drilled in the next 12-24 months.
Three Months ended September 30, Nine months ended September 30,
2013 2012 2013 2012
Oil revenue - Tunisia $ 2,507,719 $ 2,977,392 $ 6,544,670 $ 5,967,472
Other income 243 898 6,155 1,736
2,507,963 2,978,290 6,550,826 5,969,208
Operating costs 860,674 768,536 1,977,304 1,508,156
General and administrative 772,379 653,295 1,959,652 1,520,486
Stock based compensation 17,246 206,474 79,557 259,518
Financing costs 51,313 18,979 97,976 38,155
Impairment write-down (recovery) 2,916,270 - 3,447,301 (462,564 )
Loss (gain) on sale of exploration assets - - - 83,220
Exploration expense 443,009 - 545,889 -
(Gain) on sale of building - (118,258 ) - (118,258 )
Depletion and depreciation 1,058,402 1,226,949 2,800,618 2,297,815
6,119,293 2,755,975 10,908,297 5,126,528
Net income (loss) (3,611,330 ) 222,315 (4,357,472 ) 842,680
per share - basic and diluted $ (0.03 ) $ - $ (0.04 ) $ 0.01
Total assets $ 19,177,316 $ 20,244,147 $ 19,177,316 $ 20,244,147
Three Months ended September 30, Nine months ended September 30,
2013 2012 2013 2012
Oil revenues $ 2,507,719 $ 2,977,392 $ 6,544,670 $ 5,967,472
Operating costs $ (860,674 ) $ (768,536 ) $ (1,977,304 ) $ (1,508,156 )
Net operating income $ 1,647,045 $ 2,208,856 $ 4,567,366 $ 4,459,316
Depletion and depreciation $ 1,058,402 $ 1,226,949 $ 2,800,618 $ 2,297,815
Revenue per boe $ 111.60 $ 105.54 $ 109.05 $ 111.38
Operating costs per boe $ 38.30 $ 27.24 $ 32.95 $ 28.15
Operating income per boe $ 73.30 $ 78.30 $ 76.10 $ 83.23
(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.

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 five exploratory permits in Italy and three exploratory permits in Tunisia encompassing approximately 2.6 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.

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.

Contact Information