Cygam Energy Inc.
TSX VENTURE : CYG

Cygam Energy Inc.

January 16, 2006 09:00 ET

Cygam Energy Inc. Reports Operational Updates

CALGARY, ALBERTA--(CCNMatthews - Jan. 16, 2006) - Cygam Energy Inc. (TSX VENTURE:CYG) ("Cygam" or "the Corporation") would like to provide an update of its operational and project development activities in Tunisia, Italy and Canada.

In Tunisia, Storm Ventures International Inc. ("Storm") has completed the drilling and evaluation of the Oum Zoughar 2 exploratory test on the Remada Sud permit. The well has been suspended after the evaluation of low permeability hydrocarbon bearing zones in the Ordovician and in the Silurian Acacus formation. Light oil was recovered on swab tests, however the potential daily production rates without additional artificial stimulation would not justify the installation of a single well battery at this time. Further exploratory activity on the five additional prospects identified on the 1.25 million acre block will be proposed after integration of all newly acquired data and discussions with Storm and the Tunisian authorities. Although disappointed with the lack of commercial success in the first well on the permit, we are encouraged that light oil recovered during the completion confirms a significant northern extension of the Acacus play over a large portion of the Remada Sud block.

Cygam has earned a 20% working interest in the southern half of the permit by participating in the Oum Zoughar 2 exploratory well and can earn a similar interest in the northern half by paying 30% of the costs of a well which may be proposed there.

In Tunisia, Cygam also holds a 37.5% working interest in the 989,000 acre Jorf permit and a 100% working interest in the 1.08 million acre Sud Tozeur permit.

In Italy, the Corporation holds a 60% working interest in the B.R268RG permit located offshore in the Adriatic Sea, a 30% working interest in the Monatlbano permit, a 60% working interest in the Civitaquana permit and a 100% working interest in the Posta Nuova permit.

Plans to drill one well on the Jorf block in Tunisia and one well in the Posta Nuova permit in Italy are expected to be finalized in the next few months. The Corporation is currently reviewing extensive seismic data in the Jorf and Sud Tozeur permits and is in the process of acquiring existing seismic coverage in the B.R268RG permit.

In Canada, completion of the 9-19-50-17 W5M well in the South Edson gas unit where Cygam has an 8.9688% working interest is expected to commence shortly.

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 future plans and objectives of Cygam Energy Inc., are forward-looking statements that involve various risks and uncertainties, including the uncertainty of the timing in carrying out future plans. 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. 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.


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