CALGARY, ALBERTA March 5, 2010-Cygam Energy Inc. (“Cygam” or the “Corporation”) (TSX VENTURE: CYG) is pleased to announce that, further to the press release of December 17, 2009, announcing that its wholly owned subsidiary, Vega Oil S.p.A. (“Vega”), had signed a Farm out Agreement (“the Agreement”) with Petroceltic International plc. (“Petroceltic”), Petroceltic has assumed operatorship of the B.R268.RG permit (“the Permit”) located in the Adriatic Sea, offshore Italy.
Petroceltic announced on March 4, 2010, that it plans to appraise the 15 km2 Elsa structure by drilling and testing an Elsa-2 well adjacent to the existing well, Elsa-1, in which a 65m oil column was logged in 1992. An environmental impact assessment for the Elsa-2 well was submitted to the Italian Ministry for the Environment in August 2009 and is currently expected to be approved in Q2, 2010. Drilling operations are planned to commence in September 2010, subject to receiving all necessary regulatory approvals. Situated in 30m of water depth, some 7 km offshore in the Central Adriatic region of Italy, the well will be drilled by a zero discharge jack-up rig using water-based fluids. Four suitable rigs with acceptable contract windows have been identified and Petroceltic has commenced discussions with these rig operators with a view to contracting a rig in the near future. Petroceltic has completed the Elsa-2 well design and identified long lead items for procurement.
Under the terms of the Agreement, Petroceltic has agreed to pay one hundred percent (100%) of well costs for the proposed Elsa-2 well. The well is expected to cost approximately US$40 million. Upon successful completion of the Elsa 2 well, Vega and Petroceltic will participate in the future development, rights and obligations of the Permit in accordance with the following participating interests: thirty percent (30%) for Vega and seventy percent (70%) for Petroceltic.
Cygam is a Calgary based exploration company with producing properties in Canada and Tunisia and an extensive portfolio of 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. Cygam does not undertake any obligations to update forward-looking statements except as required by applicable securities laws. In particular, there is no assurance that the well will be drilled as scheduled. As well, various factors can cause delays or prevent the operator from carrying out drilling, production testing and development programs as scheduled, including but not limited to unavailability of equipment, funding and manpower or delays in the operations planned for the B.R268.RG permit due to lack of Government approvals. Actual costs could be different from those estimated. There is no certainty that a well will be drilled, or that hydrocarbons will be discovered in commercial quantities on the 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.
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.