Cygam Energy Inc.

Cygam Energy Inc.

August 04, 2011 20:00 ET

Cygam Energy Inc. Announces Sale of Canadian Producing Properties

CALGARY, ALBERTA--(Marketwire - Aug. 4, 2011) - CYGAM Energy Inc. (TSX VENTURE:CYG) ("CYGAM") announced today that it has closed the sale of CYGAM's interests in a package of producing properties located in Alberta, to R.S.L. Resources Ltd. ("RSL Resources"), a private company.

"The finalization and execution of this asset sale concludes a planned divestiture that creates additional, long-term shareholder value by permitting CYGAM's management to focus on its international activities in the Mediterranean region," said Gary Hyde, CEO of CYGAM. "We're extremely satisfied with this sale because it fits with both CYGAM's and RSL Resources' business objectives." Mr. Hyde added.

Under the terms of the agreement, CYGAM received $1,000,000 cash. RSL Resources will acquire approximately 23 boepd in production from CYGAM's interests in the following oil and gas properties effective July 1st, 2011. All of the properties are located in Alberta and represents all of CYGAM's Canadian properties to which 110,594 boe of Proved and Probable reserves had been attributed as of December 31, 2010.

South Edson Gas Unit No. 1

CYGAM has an 8.9688% working interest in the South Edson Gas Unit No. 1 located west of Edmonton. The Unit covers 45,120 gross acres of land and produces gas from the Elkton-Shunda formations.

Harmattan East Unit No. 1

CYGAM holds a 1.014525% working interest in oil and solution gas production and a 0.13331% working interest in natural gas production from the Harmattan East No. 1 Petroleum Unit and a 0.13331% working interest in the natural gas production from the Harmattan East No. 1 Natural Gas Unit. The Unit is located north-west of the City of Calgary and covers 37,280 gross acres of land. Oil and gas production is derived from the Rundle formation.

Additional Properties

CYGAM holds minor working interests in three other oil units, namely Cynthia Cardium Unit No. 4, Snipe Lake Beaverhill Lake Unit No. 1 and Wainwright Unit No. 6. The Corporation's working interest in these three units ranges from 0.076% (Snipe Lake and Wainwright) to 0.32% (Cynthia).

CYGAM is a Calgary-based exploration company with extensive international exploration permits and producing properties in Canada and 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 3.0 million gross acres. Visit the CYGAM website at for more information about CYGAM.

Proved Reserves

Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.

Probable Reserves

Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved and probable reserves.

Barrels of Oil Equivalent

Barrels of oil equivalent (boe) is calculated using the conversion factor of 6 Mcf (thousand cubic feet) of natural gas being equivalent to one barrel of oil. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1 bbl (barrel) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information