Cygam Energy Inc.
TSX VENTURE : CYG

Cygam Energy Inc.

November 18, 2010 09:00 ET

CYGAM Energy Inc. Commences Drilling of the TT3 Well at Sud Remada and Provides an Update on Tunisian Permits

CALGARY, ALBERTA--(Marketwire - Nov. 18, 2010) - CYGAM Energy Inc. ("CYGAM" or the "Corporation") (TSX VENTURE:CYG) is pleased to advise that drilling of the TT3 appraisal well at Sud Remada commenced on November 18, 2010. The TT3 well is located approximately 2.3 km south-west of the TT2 discovery well on the 67 km2 TT structure and will be drilled to a total vertical depth of approximately 1,500 meters. The main target is the Bir Ben Tartar Ordovician reservoir which had a 57 meters hydrocarbon column in the TT2 discovery well and has already flowed approximately 100,000 barrels of sweet 44 degreesAPI crude from that location. Additional targets will be evaluated in the new well, including the Triassic Tagi, the Ordovician Jaffara and the Silurian Tannezuft formation. An extensive coring program is planned for the Bir Ben Tartar reservoir as well as the Silurian Tannezuft "hot shales" which will be assessed for their unconventional reservoir qualities. A recent study of the Silurian unconventional potential in southern Tunisia has concluded that the Tannezuft "hot shales" exhibit good to very good petroleum potential with type II kerogen and that the area around the TT structure is in the oil window.

Cygam has been advised that the operator, Chinook Energy Inc. ("Chinook"), has an option to use the drilling rig for up to two additional wells after TT3. Following completion of drilling and testing operations at TT3, Chinook may use the rig to re-enter the TT2 wellbore and drill a 1,500 to 3,000 feet horizontal leg to assess the potential improvement in deliverability. After an engineering assessment of vertical and horizontal well performance, horizontal legs may be drilled in the TT3 well and in all subsequent development wells. Chinook also advised that it hopes to have an agreement and approvals in support of the first phase of commercial development early in 2011. An additional six structures, including the 74 km2 El Bell structure 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. Cygam will participate for its 14% direct working interest in all the appraisal, development and exploratory operations on the Sud Remada permit.

At Bazma, Cygam and the Tunisian State Company ("ETAP") were notified that the large U.S. independent oil and natural gas company ("the U.S. Company") has decided not to exercise its option to drill a well to test conventional and unconventional Ordovician and Silurian targets. Cygam understands that the U.S. Company has made a significant oil discovery elsewhere which requires major investment for its development. Under the terms of the agreement Cygam will now receive all the seismic data which was acquired, processed and reprocessed by the U. S. Company at no cost to the Corporation. Interpretation of the seismic data by the U.S. Company indicates that structures of adequate size exist on the permit. Cygam will further assess these structures in view of planned drilling operations and is pleased to advise that it has already received expressions of interest from other companies for the Bazma permit. The Corporation will also apply for a permit extension in order to fulfill its obligations.

At Sud Tozeur, further detailing of 2D seismic data in the eastern portion of the permit confirmed the presence of one structure with conventional and unconventional Silurian and Ordovician potential immediately north of the El Franig field plus several other leads. Cygam intends to submit an application to ETAP to transform the drilling obligation on the Jorf permit into a 3D seismic commitment at Sud Tozeur. This application proposes a new 3D seismic survey which would cover an area of approximately 200 km2, located northeast of the El Franig oil field, and would commence in 2011. The Corporation believes that this new seismic survey is essential to define the exact location to drill a potential deep well which would test Triassic, Silurian and Ordovician targets. The Sud Tozeur permit, located in west-central Tunisia near the Algerian border, covers an area of 4,380 square kilometres (1,082,283 acres). Cygam currently holds a 100% interest in the permit which will be reduced to a 89% working interest (inclusive of 7.7% free carried interest) once an existing joint venture partner earns an interest in the permit by fulfilling a drilling obligation.

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 drilling rig reaching total depth at the TT3 appraisal well or that the TT3 drilling program will be carried out when scheduled. 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 the same structure, does not necessarily assure that the company will be successful with its drilling program. There is no certainty that the Corporation will obtain extension of the Bazma permit and, if it does not, the permit could expire on July 27, 2011, unless a well is drilled prior to that date. Additionally, there is no certainty that the Corporation will be able to enter into a farm-out agreement at Bazma and, if it does not, the Corporation may not be able to finance the entire exploration of the Bazma permit without additional financing. 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.

Contact Information

  • CYGAM Energy Inc.
    Dario Sodero
    President
    (403) 802 6983
    or
    CYGAM Energy Inc.
    Ali Rawji
    CFO
    (403) 802 6983
    or
    CYGAM Energy Inc.
    Giuseppe Rigo
    Executive Chairman and CEO
    + (39) 06 390 31336
    www.cygamenergy.com