Cygam Energy Inc.
TSX VENTURE : CYG

Cygam Energy Inc.

April 30, 2012 19:05 ET

Cygam Announces Revised 2011 Year-End Reserves

CALGARY, ALBERTA--(Marketwire - April 30, 2012) - CYGAM Energy Inc. (TSX VENTURE:CYG) ("CYGAM", or the "Company"), an emerging oil and gas company with interests in Tunisia and Italy, announced today that InSite Petroleum Consultants Ltd. of Calgary, Alberta, ("InSite") has completed the annual update to CYGAM's Reserve Report for the Bir Ben Tartar Concession in the Sud Remada Permit in Tunisia, effective December 31, 2011 (the "Report"). The Report was prepared in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). CYGAM holds a 14% interest in the Bir Ben Tartar Concession which contains the TT Field and a 14% interest in the Sud Remada Permit. The amounts from this report replace the values in the Company's press release dated March 29, 2012.

All amounts relate to CYGAM's net share, after ETAP and taxes, and are reported in Canadian dollars.

Highlights include:
  • 94% increase in total net Proved (1P) reserves to 283,900 barrels of oil;

  • Net present value of total proved (1P) reserves, discounted at 10% (NPV10), increased from $2.4 million at December 31, 2010, to $12.4 million;

  • Net present value of proved and probable (2P) reserves, discounted at 10% (NPV10), increased from $9.4 million at December 31, 2010, to $23.2 million;

  • Net present value of proved, probable and possible (3P) reserves, discounted at 10% (NPV10), increased from $16.8 million at December 31, 2010, to $34.3 million;

  • 100% of reserves are light oil with realised pricing in line with Brent crude

  • Q4 average production of 186 boe/d; year-end production in excess of 250 boe/d.

  • Proven plus probable reserves have been assigned to approximately 39 percent of the estimated total oil-in-place of 153.7 million barrels in the TT Field.

"Whilst we are still at an early stage in the appraisal and development of the TT field in Tunisia, we are pleased by the continued and successful progress to date", said Mr.Giuseppe Rigo, Chairman of the Board and Interim President and CEO of CYGAM. "The proved numbers confirm the important and accretive advances in the development of the field and we are looking forward to working with our partner to further optimize and delineate the field with a significant drilling programme planned for 2012 and 2013. We believe that the TT Field will continue to offer our shareholders significant value accretion and will ultimately be a strong, free cash-flow generating asset that will help fund our ongoing growth strategies."

The following table highlights some of the results of the Report:

Future Net Revenue (after ETAP and taxes) (1)
Reserve Category Gross Remaining Reserves Net Remaining Reserves (after ETAP) Undiscounted 5% 10%
(BOE ) (BOE ) (M$ ) (M$ ) (M$ )
Proved Developed 1,435,600 120,100 7,841 7,406 7,039
Proved Undeveloped 1,916,000 163,800 7,516 6,302 5,317
Total Proved 3,351,600 283,900 15,357 13,708 12,356
Probable 3,986,500 263,200 15,741 12,941 10,826
Total Proved + Probable 7,338,100 547,100 31,098 26,649 23,182
Possible 6,476,100 326,800 19,562 14,880 11,201
Total Proved + Probable + Possible 13,814,200 873,900 51,626 41,542 34,266
(1) The Company's production from its Bir Ben Tartar Concession in the Sud Remada permit is governed by a production sharing contract with ETAP, the Tunisian national oil company. Under this contract, the Company receives a share of the production under a sliding scale formula. The calculation includes a cost oil component which enables the Company to recover all of its costs and a profit sharing component whereby profits are split between the Company and ETAP.

The Report was prepared by InSite, an independent international petroleum consulting firm registered in the province of Alberta. The Report has been prepared in accordance with NI 51-101, and is based on InSite's review of technical data including geology, geophysics and reservoir parameters. Summary data from the InSite Report is available on the Company's website at www.cygamenergy.com and is filed on SEDAR at www.sedar.com. CYGAM recommends that readers refer to the summary data as it details the process for determining the reserve estimates, the assumptions underpinning the modeling, and defines technical terms used.

Other Information

About InSite Petroleum Consultants Ltd.

InSite is an international petroleum consulting firm who specialize in evaluation of reserves and resources for major oil and gas companies, governments, financial institutions and the investment industry. For more detail on InSite, please visit their website, at: www.insitepc.com

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.

For further information visit our website at www.cygamenergy.com.

Forward Looking Information

This news release contains certain forward-looking statements that reflect the current views and/or expectations of Cygam Energy Inc. with respect to its performance, business and future events. Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, those relating to changes in the market, potential downturns in economic conditions, foreign exchange fluctuations, changes in business strategy, regulatory requirements, demand for our resources, competition and dependence on key personnel. These risks, as well as others, could cause actual results and events to vary significantly. Cygam Energy Inc. does not undertake any obligations to release publicly any revisions for updating any voluntary forward-looking statements.

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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