Cygam Energy Inc.
TSX VENTURE : CYG

Cygam Energy Inc.

January 05, 2007 09:00 ET

Cygam Energy Inc. Receives Final Ministerial Approval for the Aretusa Permit 'C.R148.VG' Offshore Sicily

CALGARY, ALBERTA--(CCNMatthews - Jan. 5, 2007) - Cygam Energy Inc. (TSX VENTURE:CYG) ("Cygam" or the "Corporation") is pleased to announce that its wholly owned subsidiary, Vega Oil S.p.A. ("Vega"), received the final ministerial approval for the Aretusa exploration permit, now officially named C.R148.VG. The official decree was published in the monthly Italian Hydrocarbon Bulletin on December 31, 2006.

The C.R148.VG permit is located in the Ragusa Plateau and encompasses an area of 83,264 acres (336.98 square kilometres). Available seismic data indicates the presence of two potential structures on the block. The main hydrocarbon target is the upper Triassic porous dolomites of the Taormina formation; a secondary target is represented by lower Jurassic carbonates of the Villagonia formation which was deposited above the Streppenosa black shales, the major source rocks in the area. The only well drilled in the permit area in 1985 (Aretusa-1) flowed 1500 BOPD of 36 degrees API oil and 11.5 MMCF/D for a short period of time from fractured pelagic limestones of the Villagonia formation. The well was not drilled deep enough to reach the Taormina formation. The test of oil and gas within the block is an indication that hydrocarbons were generated in the Jurassic and Triassic systems within or in close proximity of the Aretusa block. Several significant oil fields have been discovered in Triassic and Jurassic carbonates onshore and offshore Sicily since 1954.

Vega has a 100% working interest in this new exploration permit located in the Mediterranean Sea, offshore south-eastern Sicily, in water depths of 20 to 130 metres. Cygam has already received expressions of interest from other companies active in the Mediterranean Basin and willing to participate in exploratory activities in the area.

In the short term, Vega plans to acquire, reprocess and interpret all the existing seismic data previously shot on and around the permit. Following the interpretation of this data, Vega is committed to acquire a 3D seismic program covering an area of approximately 80 to 100 square kilometres in order to further define the two indicated seismic structures on the block and select a drilling location.

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 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 in carrying out the Corporation's seismic and drilling plans, including but not limited to unavailability of equipment and manpower, and there is no certainty that the seismic and drilling programs will be carried out when scheduled. The existence of discoveries in structures and formations in the regions where Cygam has permits does not necessarily assure that the company will be successful. There is no assurance that commercial quantities of hydrocarbons will be discovered on the Corporation's exploration permit. 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.

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

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