Cygam Energy Inc.
TSX VENTURE : CYG

Cygam Energy Inc.

August 07, 2012 09:30 ET

CYGAM Energy Announces TT-16 Flow Test Results in Tunisia

CALGARY, ALBERTA--(Marketwire - Aug. 7, 2012) - CYGAM Energy Inc. ("CYGAM") (TSX VENTURE:CYG) is pleased to provide initial flow rates on the TT-16 horizontal well in the TT Field in the BBT Concession in Tunisia. Through a wholly-owned subsidiary, CYGAM holds a 14% working interest in the Concession.

The initial horizontal test well of the Ordovician reservoir on the Bir Ben Tartar ("BBT") concession began production testing on July 15, 2012. The Operator reports that over the first six days (July 15 to July 21) the flow period was interrupted by attempts to circulate sand and clean the wellbore to its full length and included periods where wellbore energy was assisted by nitrogen injection and, as a result, the flow rates over that period are not representative of well performance. Since July 22, 2012, the well has flowed under its natural reservoir energy. Over the initial ten day flow period the TT-16 well produced at an average oil rate of 897 barrels of oil per day (bopd), an average water rate of 331 barrels of water per day (27% water cut) and an average gas-oil-ratio of 1,110 standard cubic feet of gas per barrel of oil (scf/bbl). To date the Operator has recovered 87% of the 8,700 barrels of load fluid and the water cut over the last 48 hours of flow has decreased to approximately 10%. The average daily oil rate over the last 48 hours has been 770 bopd through a 3/4" choke at a bottomhole flowing pressure of 925 psi. Although the flowing bottomhole pressure has shown signs of beginning to stabilize, extrapolation of the early trend data in the first application of a multi-staged completion of the tight Ordovician sand reservoir should be assessed on more mature initial production data of 30 and 90 days, which will be released in due course. The TT-16 well was fracture stimulated along the 832 metre horizontal section (previously incorrectly reported as a 950 metre horizontal section) with the placement of approximately 385,000 pounds of sand over eight stages.

CYGAM's Interim Chief Executive Officer, Giuseppe Rigo, commented "The early performance of this first application of a horizontal multi-fracked well is very encouraging when compared to previous vertical wells in similar quality reservoir rock. We eagerly look forward to seeing the results of the remainder of the current drilling programme which is expected to include a further four horizontal multi-fracked wells over the balance of the year. The second well in the sequence, TT-13, is currently drilling the horizontal section which is expected to be completed within 7 to 10 days."

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, Tunisia and the Mediterranean Basin. CYGAM currently holds various interests in seven exploratory permits in Italy plus three exploratory permits and the BBT Production Concession in Tunisia which together encompass a total of 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.

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 effect 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 (www.sedar.com). 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 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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