Cygam Energy Inc.
TSX VENTURE : CYG

Cygam Energy Inc.

May 26, 2011 09:15 ET

CYGAM Energy Inc. Provides Completion Results on Three Sud Remada Wells and Tunisian Security Update

CALGARY, ALBERTA--(Marketwire - May 26, 2011) - CYGAM Energy Inc. (TSX VENTURE:CYG) ("CYGAM" or the Company") is pleased to announce that the Operator of the Sud Remada Permit in Tunisia (Storm Venture Tunisia, a subsidiary of Chinook Energy Inc. "Chinook") has released the fracturing equipment working on the TT structure completion program. A rig is in the process of equipping the wells for production which is expected to commence within the next 15 days.

The program involved the fracture stimulation of the tight Ordovician reservoir in the Jeffara (Upper and Lower) and Lower Bir Ben Tartar formations in the TT2, TT3 and TT4 wells, the completion of the better quality Upper Bir Ben Tartar ("UBBT") in TT3, and an experimental completion in the Tannezuft shale in the TT3 well.

The completion results from the Tannezuft shale in TT3 are still being analyzed and will be released at a later date.

The following information summarizes the results to date from the completion operations prior to the wells commencing production. IP30 data will be released once available. It should be cautioned that the rates experienced to this point include significant percentages of load fluid (water) and may not be indicative of rates under long term production conditions.

TT2 well

The producing Upper Bir Ben Tartar zone, which has produced over 110,000 bbls to date from the discovery well under natural flow, was recompleted in a single stimulation within the Lower Jeffara with a 100,000 lbs fracture stimulation. After a 228 hour flow period, during which a water volume close to 90% of the load water used was recovered, the final 24 hour rate was 266 bbls of fluid per day with a 19% water cut. The gas rate averaged 273 mcfd for a total hydrocarbon production of 265 boepd. The Lower Bir Ben Tartar and Upper Jeffara pay zones in this well have not been completed.

TT3 well

Four separate fracture stimulations were successfully performed on the Lower Bir Ben Tartar (60,000 lbs), Lower Jeffara (108,000 lbs), Upper Jeffara (68,000 lbs) and the Tannezuft shale (114,000 lbs). The Lower Bir Ben Tartar was completed below the pool oil water contact and confirmed wet. After a 70 hour flow period, during which a water volume equal to approximately 25% of the load water used was recovered, the final 10 hour rate was 1,452 bbls of fluid per day with a 41% water cut. The gas rate averaged 1,030 mcfd for total hydrocarbon production of 1,020 boepd. The Upper Bir Ben Tartar perforations were added after this flow test. The potential rate contribution from the Tannezuft was not determined and this zone will be isolated and evaluated prior to the well being put on production.

TT4 well

A single fracture treatment (125,000 lbs) was performed on perforations in the Upper Bir Ben Tartar (UBBT) and Lower Jeffara intervals combined. The Upper Jeffara is not developed at this location. After a 191 hour flow period, during which a water volume equal to approximately 75% of the load water used was recovered, the final 24 hour rate was 95 bbls of fluid per day with a 40% water cut. The gas rate averaged 1,373 mcfd for total hydrocarbon production of 285 boepd. The zones were isolated after this test and the flow contribution from the lower perforations in the UBBT was minimal. These perforations may be re-stimulated at a later date. Chinook has seen gas rates drop off and oil rates increase in other completions in the field and will put this well on production to determine the presence, or possible extent of a gas cap, on the southeast portion of the field.

Gary Hyde, CEO of CYGAM stated "CYGAM is encouraged by these results which, as a whole, are in line with expectations." In addition, the Operator stated that it clearly is at the very early stages of understanding the reservoir distribution, productive capability and potential recoveries, but the high percentage of successful stimulations will allow them to unlock the large percentage of oil in place attributable to the poorer quality Ordovician reservoirs. With these completion results and the granting of the Bir Ben Tartar concession on April 27th, the Operator is now in a position to program the next phase of development drilling which will be discussed with CYGAM, and ETAP.

The Sud Remada area is in very close proximity to the Libyan frontier and Dehibat border crossing that has been the subject of military activity immediately over the border, in Libya, over the past several weeks. Chinook's operations are in regular contact with the Tunisian military which is in control of the area. Trucking of production from Sud Remada and sales from the La Skira terminal have not been interrupted and are expected to continue once the new wells are brought onto production. Preparations continue for an initial round of Tunisian elections scheduled to be held on July 24, 2011. Political parties are organizing; local labor and political demonstrations occur and are dispersed, sometimes with force.

CYGAM is a Calgary-based exploration company with producing exploration properties in Canada and extensive international exploration permits. 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 six exploratory permits in Italy and three exploratory permits in Tunisia encompassing approximately over 3.0 million gross acres. 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 completion and production programs as scheduled, including but not limited to unavailability of equipment, funding and manpower or delays in the production, marketing and transportation of product. 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 completion and production programs. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. 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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