CALGARY, ALBERTA--(Marketwire - July 23, 2012) - CYGAM Energy Inc. ("CYGAM") (CYG.V) is pleased to provide an update on the drilling operations at the TT Field in the BBT Concession in Tunisia. Through a wholly-owned subsidiary, CYGAM holds a 14% working interest in the Concession.
The operator, Chinook Energy Inc. (the "Operator"), has advised that the first horizontal well, TT16, targeting the Ordovician in the Ghadames Basin of southern Tunisia was successfully completed on July 1, 2012. Foradex Rig 14 completed the 42 day operation with no incidents or accidents. Final measured depth was 2,435 metres with a horizontal section of 950 metres. Gross drilling costs were approximately US$7.0 million (US$ 980,000 net to CYGAM).
A Packer's Plus system was successfully run on TT16 in anticipation of a multi-stage fracture stimulation of the Ordovician Jeffara and Bir Ben Tartar Formations. Completion operations commenced on July 8, 2012 and fracturing operations were completed on July 15, 2012 after successfully placing a total of 385,285lbs of sand over eight frac intervals spaced along the 950 metre horizontal section. The Operator reports that the frac ports have been successfully drilled out, the full length of the well is open and expects to commence flowing the well back within 48 hours.
TT16 is the first multi-stage hydraulically fractured horizontal well in Tunisia. Despite the challenging logistics, manpower and equipment conditions, the operation was completed successfully and represents a valid test of this proven technology in a new application. The target reservoir at the TT Field is a thick (up to 50 metres of pay column) low permeability (average close to one millidarcy permeability) heterogeneous clastic reservoir that demonstrates commercial flow rates from stimulated vertical wells. The application of horizontal wells in this low permeability conventional reservoir is an attempt to increase the production rate and ultimate recovery relative to what may be achieved with fractured vertical wells.
The Foradex 14 rig has subsequently moved to the TT13 location and spudded the second horizontal well on the TT Field on July 7, 2012. The TT13 well is approaching the intermediate casing point at the top of the Lower Jeffara Formation and is anticipated to drill an 800 to 1,000 metre horizontal section with a total measured depth at TD of approximately 2,600 metres.
CEO Giuseppe Rigo commented, "We want to recognise the exemplary efforts of the Operator's operations staff, supervisory personnel and key service providers in successfully completing the drilling and completion of this challenging and important operation. The results of this technology will have a significant bearing on the future development of the TT Field however we expect that the results and learning experiences of several horizontal wells will be required to optimise the future development of the field."
Further information on completion operations including initial and stabilised flow rates will be provided when available.
About CYGAM Energy Inc.
CYGAM is a Calgary-based exploration company with extensive international exploration permits and a producing property in Tunisia. The main focus of CYGAM 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 seven exploratory permits in Italy plus three exploratory permits and the BBT Production Concession in Tunisia which together encompass a total of approximately 2.7 million gross acres.
In the interest of providing shareholders and potential investors with information regarding CYGAM, including management's assessment of the future plans and operations of CYGAM, certain statements contained in this news release constitute forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation. In particular, this news release contains, without limitation, forward-looking statements pertaining to future operations to be completed by the Operator at the TT16 and TT13 locations and the timing thereof.
With respect to the forward-looking statements contained in this news release, CYGAM has made assumptions regarding, among other things: the ability of the Operator to continue to operate in Tunisia with limited logistical, security and operational issues and the ability of the Operator to obtain equipment in a timely manner to carry out drilling and completion operations. Although CYGAM believes that the expectations reflected in the forward-looking statements contained in this news release, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this news release, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the forward-looking statements will not occur, which may cause CYGAM's actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, without limitation, political and security risks associated with the Operator's Tunisian operations, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve and resource estimates, inability to retain drilling rigs and other services, capital expenditure costs, including drilling, completion and facilities costs, unexpected decline rates in wells, delays in projects and/or operations, wells not performing as expected, delays resulting from or inability to obtain the required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Readers are cautioned that the forgoing list of factors is not exhaustive. Additional information on these and other factors that could effect CYGAM's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and CYGAM does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
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