Cygam Energy Inc.
TSX VENTURE : CYG

Cygam Energy Inc.

December 06, 2006 09:00 ET

Cygam Energy Inc. Receives Final Ministerial Approval for the Posta Nuova Permit in Italy

CALGARY, ALBERTA--(CCNMatthews - Dec. 6, 2006) - Cygam Energy Inc. ("Cygam") (TSX VENTURE:CYG) is pleased to announce that its wholly owned subsidiary, Vega Oil S.p.A., received the final ministerial approval for the Posta Nuova exploration permit. The official decree was published in the monthly Italian Hydrocarbon Bulletin on November 30, 2006.

Vega has a 100% working interest in the Posta Nuova permit located onshore, in the Puglia region of southern Italy, along a trend of several major producing gas fields (Candela-Palino, Monte Stillo, San Salvo-Cupello). The permit, granted for a six years exploration term, is 154.55 square kilometres in size (38,188 acres) and carries an obligation to drill a well within 24 months from the official award date.

Vega has recently acquired additional seismic data which is currently being interpreted in order to confirm the size of the structural target which was first drilled in 1993. The exploratory well, Cervaro 1, tested gas at a rate of 1.3 MMcf/d from a middle Pliocene sand at a depth of approximately 950 metres and was subsequently abandoned due to a lack of gas transmission infrastructure at that time.

The Company is planning to offset the Cervaro 1 well to the required minimum total vertical depth of 1,000 metres to test the primary Middle Pliocene objective; however, if seismic interpretation confirms the presence of deeper structural objectives, the well may be deepened to approximately 1,500 metres to test a potential secondary Miocene reservoir.

Vega intends to drill the Posta Nuova prospect on a 100% basis and is currently finalizing the contracting of a drilling rig with an Italian company. Drilling is anticipated to commence in April, 2007, upon completion of the rig's current obligations. Casing, tubing and completion equipment are currently being acquired and will be available prior to the commencement of drilling operations.

Gas transmission infrastructure currently exists in the Posta Nuova area and co-generation possibilities are also being considered.

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 drilling plans, including but not limited to unavailability of equipment and manpower, and there is no certainty that the 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. 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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