Cygam Energy Inc.
TSX VENTURE : CYG

Cygam Energy Inc.

February 18, 2011 09:15 ET

Cygam Energy Inc. Announces That Production Casing Has Been Set at the Sud Remada TT4 Exploratory Well

CALGARY, ALBERTA--(Marketwire - Feb. 18, 2011) - CYGAM Energy Inc. ("CYGAM" or the "Corporation") (TSX VENTURE:CYG) is pleased to advise that drilling and logging operations have been completed at the TT4 exploratory well at Sud Remada. Production casing was set to total depth of 1,745 metres and the well is now awaiting completion. The TT4 well was drilled on the 67 km2 TT structure with the primary targets being the Ordovician Jeffara and Bir Ben Tartar reservoirs which were originally encountered and proven productive in the TT2 discovery well located approximately 6 km to the north-west and were also present in the TT3 appraisal well recently drilled some 7.6 km to the west. An extensive logging and wireline testing program undertaken over the Ordovician section confirmed that two zones interpreted as hydrocarbon bearing in the TT2 discovery well (which has already produced in excess 105,000 barrels of sweet 44°API crude, on natural flow and without fracture stimulation) extend over a significant portion of the large TT structure.

Upon arrival of equipment and specialized crews, completion operations are expected to commence in early March and involve multiple fracture stimulations of the Bir Ben Tartar, Jeffara and Tannezuft formations in the TT4, TT3 and TT2 wells. 

CYGAM has been advised that the operator, Storm Tunisia (a subsidiary of Chinook Energy Inc.), submitted a Plan of Development for the TT structure to the Tunisian authorities on January 20, 2011 and has been actively engaged with Entreprise Tunisienne D'Activités Pétrolières (ETAP) as it progresses towards the granting of a production concession by the Direction Générale de l'Energie (DGE), potentially as early as Q2, 2011. Subject to receipt of notice of concession approval, Chinook will make preliminary plans to drill the TT5 development well in Q2, 2011 and tentatively five additional development wells prior to year end 2011. CYGAM is fully funded for these operations and will participate for its 14% direct working interest in all the appraisal, development and exploratory operations on the Sud Remada permit.

In addition to the 67 km2 TT structure, six additional structures, including the 74 km2 El Bell anomaly located approximately 17 km north-east of the TT2 discovery well, and several leads have been identified on the 1.2 million acre Sud Remada block.

Drilling at the TT4 location commenced on January 21, 2011, shortly after civil disobedience of increasing intensity led to the resignation of the President of Tunisia in favour of an interim government that intends to lead the country until elections can be held later this year. Drilling of the TT4 well and production operations at the TT2 location have not suffered any interruption during this period. The security situation has improved to near normal with an end to the overnight curfew and with schools and businesses being open, including CYGAM's Tunis office. However, there are still some periodic localized demonstrations that may cause short term disruptions. The interim government of Tunisia has stated its intent to honour all lawful contracts in place prior to the change in government and has been largely successful, with the support of the major labour groups, in having people return to work to help restart the economy.

CYGAM is also pleased to announce that it has received the approval from Tunisian authorities to extend the Bazma permit for one year (to July 27, 2012) and that it plans to drill one deep Ordovician well on that permit in late 2011. The Corporation has also received a two year extension (to May 12, 2013) for the Sud Tozeur permit by committing to acquire a 200 km2 3D seismic survey in Q3, 2011, and by committing to drill a 4,500 meter Ordovician exploratory test on the permit. The 3D seismic survey will be conducted immediately north of the El Franig producing field where one Ordovician well increased its productivity to over 5,000 boepd after successful artificial fracturing operations. It is expected that the 3D seismic survey will enhance the interpretation of a 27 km2 structure already identified by CYGAM north-east of the El Franig field on the basis of proprietary 2D seismic data.

CYGAM is a Calgary based exploration company with producing exploration properties in Canada and Tunisia plus extensive international exploration permits. The main focus of the Corporation 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 six exploratory permits in Italy and four exploratory permits in Tunisia encompassing approximately over 3.5 million gross acres (approximately 1.8 million net acres before pending farm-outs). Visit the CYGAM website at www.cygamenergy.com for more information about CYGAM.

This News Release includes certain "forward-looking statements". All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding interpretation of seismic and well data, future plans and objectives of CYGAM Energy Inc., are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated or expected in such statements. In particular, various factors can cause delays or prevent the Corporation from carrying out its drilling and completion programs as scheduled, including but not limited to unavailability of equipment, funding and manpower or delays in the planned operations at the TT3 and TT4 wells or that the completion programs will be carried out when scheduled. Seismic and drilling operations at Bazma and Sud Tozeur can also be affected by potential unavailability of equipment, funding and manpower or delays in the planned operations. The existence of discoveries in structures and formations in the regions where CYGAM is drilling, and the previous testing of oil and gas flows in some structures, does not necessarily assure that the company will be successful with its drilling and completion programs. CYGAM does not undertake any obligations to update forward-looking statements except as required by applicable securities laws. Important factors that could cause actual results to differ materially from CYGAM's expectations are risks detailed herein and from time to time in the continuous disclosure filings made by CYGAM with securities regulators on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.

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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