Welcome!

Microsoft Cloud Authors: Kevin Benedict, Pat Romanski, Liz McMillan, Lori MacVittie, Elizabeth White

News Feed Item

CYGAM Announces 2012 Year-End Reserves

CALGARY, ALBERTA -- (Marketwire) -- 02/27/13 -- CYGAM Energy Inc. (TSX VENTURE:CYG) ("CYGAM", or the "Company"), an emerging oil and gas company with interests in Tunisia and Italy, announced today that InSite Petroleum Consultants Ltd. of Calgary, Alberta, ("InSite") has completed the annual update to CYGAM's Reserve Report for the Bir Ben Tartar Concession ("the Concession") in the Sud Remada Permit in Tunisia, effective December 31, 2012 (the "Report"). The Report was prepared in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and the Canadian Oil and Gas Evaluation Handbook ("COGEH"). The report is based on InSite's review of technical data including geology, geophysics and reservoir. CYGAM holds a 14% interest in the Concession which contains the TT Field and a 14% interest in the Sud Remada Permit.

The Company's production from the Concession is governed by a production sharing agreement ("PSA") with ETAP, the Tunisian national oil company. All amounts set forth herein relate to CYGAM's net share, after ETAP participation and taxes, and are reported in Canadian dollars.

Year-End 2012 Reserves

Based on a static, volumetric geological model developed by a third party, InSite evaluated the total TT Field to contain an estimated total Discovered Petroleum Initially in Place ("DPIIP") of 201.7 million barrels, which is an increase of 31% from the 153.7 million barrels estimated at the end of 2011. The difference is a result of revised petrophysical analysis of the reservoir properties based on new data acquired during 2012.

The following summarizes the changes in CYGAM's net reserves:

----------------------------------------------------------------------------
Oil Reserves (barrels)           December 31,   December 31,                
                                       2012(1)        2011(2)      Increase 
----------------------------------------------------------------------------
Proved                                430,200        283,900             52%
----------------------------------------------------------------------------
Proved plus Probable                  807,100        547,100             48%
----------------------------------------------------------------------------
Proved plus Probable plus                                                   
 Possible                           1,180,100        873,900             35%
----------------------------------------------------------------------------
(1) Information derived from the Report.                                    
(2) Information derived from a report (the "2011 Report") prepared by InSite
    dated December 31, 2011, which was prepared in accordance with NI 51-101
    and COGEH.                                                              

Following 2012 net CYGAM production of 89,762 barrels, reserves replacement ratios are as follows:

----------------------------------------------------------------------------
Proved                                  263%                                
----------------------------------------------------------------------------
Proved plus Probable                    390%                                
----------------------------------------------------------------------------
Proved plus Probable plus Possible      441%                                
----------------------------------------------------------------------------

Estimated Future Net Revenues

All evaluations and reviews of future net cash flows are stated prior to any provision for interest costs or general and administrative costs, and after the deduction of estimated future capital expenditures for wells, to which reserves have been assigned.

----------------------------------------------------------------------------
                                             Future Net Revenue             
                                             (after ETAP and taxes)(1) (2)  
----------------------------------------------------------------------------
                     Gross     Net Remaining                                
Reserve Category   Remaining  Reserves (after  Undiscounted    5%      10%  
                   Reserves       ETAP)(1)                                  
----------------------------------------------------------------------------
                   (barrels)     (barrels)         (M$)       (M$)    (M$)  
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Proved Developed   1,917,400      160,400         7,521       7,211   6,935 
----------------------------------------------------------------------------
Proved                                                                      
 Undeveloped       3,225,400      269,800         11,850      9,395   7,475 
----------------------------------------------------------------------------
Total Proved       5,142,800      430,200         19,370     16,606  14,410 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Probable           5,520,500      376,900         19,032     14,486  11,310 
----------------------------------------------------------------------------
Total Proved +                                                              
 Probable         10,663,300      807,100         38,402     31,092  25,720 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Possible           7,034,600      373,000         21,821     15,536  11,665 
----------------------------------------------------------------------------
Total Proved +                                                              
 Probable +       17,697,900     1,180,100        60,223     46,628  37,385 
 Possible                                                                   
----------------------------------------------------------------------------
(1) Under the PSA, the Company receives a share of the production under a   
    sliding scale formula. The calculation includes a cost oil component    
    which enables the Company to recover all of its costs and a profit      
    sharing component whereby profits are split between the Company and     
    ETAP. In addition, ETAP is responsible for paying all income taxes      
    arising from production from the Concession.                            
(2) It should not be assumed that the estimates of future net revenues      
    presented herein represent the fair market value of the reserves.       

Changes in the Net Present Value ("NPV") of future net revenues are summarized below:

----------------------------------------------------------------------------
                    December 31,        December 31,                        
    NPV (M$)           2012(1)             2011(2)            Increase      
                ------------------------------------------------------------
                Undiscounted  NPV10 Undiscounted  NPV10 Undiscounted  NPV10 
----------------------------------------------------------------------------
     Proved        19,370    14,410    15,357    12,356     26.1%     16.6% 
----------------------------------------------------------------------------
    Proved +                                                                
     Probable      38,402    25,720    31,098    23,182     23.5%     10.9% 
----------------------------------------------------------------------------
    Proved +                                                                
    Probable +     60,223    37,385    51,626    34,266     16.6%     9.1%  
     Possible                                                               
----------------------------------------------------------------------------
(1) Information derived from the Report.                                    
(2) Information derived from the 2011 Report.                               

Crude produced from the TT Field sells at close to Brent prices. Future revenues in the Report were estimated using InSite's December 31, 2012 price forecast for Brent crude:

----------------------------------------------------------------------------
               2013         2014         2015         2016         2017     
----------------------------------------------------------------------------
                                                              103.06 +2 % pa
  $/barrel    107.00       104.00       101.00       101.00      thereafter 
----------------------------------------------------------------------------
(1) Assumes exchange rate US$1.00 = C$1.00.                                 

Contingent Resources

In the Report reserves have only been assigned to a portion of the mapped field area (for example 44% of the DPIIP for the Proved plus Probable case) with the remaining field areas classified as contingent resources:

---------------------------------------------------------------------------
                              Gross Contingent        Company Contingent   
    Resource Category            Resources                Resources        
                                   (bbls)                   (bbls)         
---------------------------------------------------------------------------
           Low                   12,133,000                809,000         
---------------------------------------------------------------------------
           Best                  15,166,000               1,011,600        
---------------------------------------------------------------------------
           High                  20,221,000               1,348,700        
---------------------------------------------------------------------------

Because of uncertainty of commerciality, the estimated Contingent resources cannot be classified as reserves as of the effective date of this report. Uncertainties include - but are not limited to -insufficient delineation of the discovered oil and gas accumulation as well as a lack of demonstrated funding. The Contingent resource estimates are provided as a means of comparison to other Contingent resources and are not to be directly compared to reserves. There is no certainty that it will be commercially viable to produce any portion of the resources and the economic status of contingent resources summarized in this report is undetermined.

The Report was prepared by InSite, an independent international petroleum consulting firm registered in the province of Alberta. Summary data from the Report will be filed on the Company's SEDAR profile at www.sedar.com on or around March 7, 2013 and will also be available on the Company's website at www.cygamenergy.com. CYGAM recommends that readers refer to the summary data as it details the process for determining the reserve estimates, the assumptions underpinning the modeling, and defines technical terms used.

"We are pleased with the results of the initial programme of four horizontal, multi-fracked wells that were drilled in 2012 which have confirmed the applicability of this technology to optimise the ongoing development of the TT Field" said David Taylor, President and CEO of CYGAM. "The lessons learnt will be incorporated into the future development of the field and a number of additional horizontal, multi-fracked wells are planned for 2013 which are expected to result in continued production and reserves growth."

About InSite Petroleum Consultants Ltd.

InSite is a Calgary based petroleum consulting firm who specialize in evaluation of reserves and resources for domestic and international oil and gas companies, governments, financial institutions and the investment industry. For more detail on InSite, please visit their website, at: www.insitepc.com

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.

Cautionary Statements

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 drilling operations; production and reserve growth; reserve, resource and future net revenue estimates; and the filing of the summary data from the Report.

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; the ability of the Operator to obtain equipment in a timely manner to carry out drilling and completion operations; the results of geological, geophysical and reservoir analysis and testing operations; commodity prices; the receipt of required regulatory approvals; global economic conditions. 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, results of geological, geophysical and reservoir analysis and testing operations, the 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, CYGAM's ability to access sufficient capital from internal and external sources, results of seismic and drilling operations; and risks associated with the operation of CYGAM's assets by third parties, including the limited ability of CYGAM to exercise influence over the operation of those assets or their associated costs, the timing and amount of capital expenditures, the operator's expertise and financial resources, the approval of other participants, and the selection of technology and risk management practices. 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 affect 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.

All "total oil in place" other than, cumulative production, reserves and contingent resources has been categorized as undiscovered.

Definitions of Reserves Categories:

--  "Proved" reserves are those reserves that can be estimated with a high
    degree of certainty to be recoverable. It is likely that the actual
    remaining quantities recovered will exceed the estimated proved
    reserves. 

--  "Probable" reserves are those additional reserves that are less certain
    to be recovered than proved reserves. It is equally likely that the
    actual remaining quantities recovered will be greater or less than the
    sum of the estimated proved plus probable reserves. 

--  "Possible" reserves are those additional reserves that are less certain
    to be recovered than probable reserves. There is a 10% probability that
    the quantities actually recovered will equal or exceed the sum of proved
    plus probable plus possible reserves. 

"Contingent Resources" are those quantities of oil estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as distance from existing production, economic, legal, environmental, political, and regulatory matters or a lack of markets. Some of the specific contingencies identified by InSite to convert contingent resources into reserves include, without limitation, insufficient delineation of the discovered oil and gas accumulation as well as a lack of demonstrated funding. It is also appropriate to classify as contingent resources the estimated discovered recoverable quantities associated with a project in the early evaluation stage. Contingent resources are further classified in accordance with the level of certainty associated with the estimates and may be sub classified based on project maturity and/or characterized by their economic status.

Uncertainty Ranges are described by the COGEH as low, best, and high estimates for reserves and resources as follows:

Low Estimate: This is considered to be a conservative estimate of the quantity that will actually be recovered. It is likely that the actual remaining quantities recovered will exceed the low estimate. If probabilistic methods are used, there should be at least a 90 percent probability (P90) that the quantities actually recovered will equal or exceed the low estimate.

Best Estimate: This is considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate. If probabilistic methods are used, there should be at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best estimate.

High Estimate: This is considered to be an optimistic estimate of the quantity that will actually be recovered. It is unlikely that the actual remaining quantities will exceed the high estimate. If probabilistic methods are used, there should be at least a 10 percent probability (P10) that the quantities actually recovered will equal or exceed the high estimate.

The "reserves replacement ratio" is determined by dividing the yearly change in reserves before production by the actual annual production for the year (eg Total Proved plus Probable (((807,100-547,100)+89,762)/89,762=3.9)

Disclosure provided herein in respect of BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

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

Contacts:
CYGAM Energy Inc
David Taylor
President and Chief Executive Officer
403 605 5117
[email protected]

CYGAM Energy Inc
Al Robertson
Chief Financial Officer
403 452 6883
[email protected]

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

IoT & Smart Cities Stories
CloudEXPO New York 2018, colocated with DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City and will bring together Cloud Computing, FinTech and Blockchain, Digital Transformation, Big Data, Internet of Things, DevOps, AI, Machine Learning and WebRTC to one location.
Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settlement products to hedge funds and investment banks. After, he co-founded a revenue cycle management company where he learned about Bitcoin and eventually Ethereal. Andrew's role at ConsenSys Enterprise is a mul...
SYS-CON Events announced today that IoT Global Network has been named “Media Sponsor” of SYS-CON's @ThingsExpo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. The IoT Global Network is a platform where you can connect with industry experts and network across the IoT community to build the successful IoT business of the future.
DXWorldEXPO | CloudEXPO are the world's most influential, independent events where Cloud Computing was coined and where technology buyers and vendors meet to experience and discuss the big picture of Digital Transformation and all of the strategies, tactics, and tools they need to realize their goals. Sponsors of DXWorldEXPO | CloudEXPO benefit from unmatched branding, profile building and lead generation opportunities.
Disruption, Innovation, Artificial Intelligence and Machine Learning, Leadership and Management hear these words all day every day... lofty goals but how do we make it real? Add to that, that simply put, people don't like change. But what if we could implement and utilize these enterprise tools in a fast and "Non-Disruptive" way, enabling us to glean insights about our business, identify and reduce exposure, risk and liability, and secure business continuity?
DXWorldEXPO LLC announced today that Telecom Reseller has been named "Media Sponsor" of CloudEXPO | DXWorldEXPO 2018 New York, which will take place on November 11-13, 2018 in New York City, NY. Telecom Reseller reports on Unified Communications, UCaaS, BPaaS for enterprise and SMBs. They report extensively on both customer premises based solutions such as IP-PBX as well as cloud based and hosted platforms.
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
Digital Transformation: Preparing Cloud & IoT Security for the Age of Artificial Intelligence. As automation and artificial intelligence (AI) power solution development and delivery, many businesses need to build backend cloud capabilities. Well-poised organizations, marketing smart devices with AI and BlockChain capabilities prepare to refine compliance and regulatory capabilities in 2018. Volumes of health, financial, technical and privacy data, along with tightening compliance requirements by...
To Really Work for Enterprises, MultiCloud Adoption Requires Far Better and Inclusive Cloud Monitoring and Cost Management … But How? Overwhelmingly, even as enterprises have adopted cloud computing and are expanding to multi-cloud computing, IT leaders remain concerned about how to monitor, manage and control costs across hybrid and multi-cloud deployments. It’s clear that traditional IT monitoring and management approaches, designed after all for on-premises data centers, are falling short in ...
Poor data quality and analytics drive down business value. In fact, Gartner estimated that the average financial impact of poor data quality on organizations is $9.7 million per year. But bad data is much more than a cost center. By eroding trust in information, analytics and the business decisions based on these, it is a serious impediment to digital transformation.