Welcome!

News Feed Item

CYGAM Announces 2013 Year-End Reserves

CALGARY, ALBERTA -- (Marketwired) -- 02/26/14 -- 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, 2013 (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 2013 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 unchanged from December 31, 2012.

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


----------------------------------------------------------------------------
                                       December 31,   December 31,
Oil Reserves (barrels)                      2013(1)        2012(2) Increase
----------------------------------------------------------------------------
Proved                                      472,600        430,200       10%
----------------------------------------------------------------------------
Proved plus Probable                        891,600        807,100       10%
----------------------------------------------------------------------------
Proved plus Probable plus Possible        1,320,000      1,180,100       12%
----------------------------------------------------------------------------

1.  Information derived from the Report.
2.  Information derived from a report (the "2012 Report") prepared by InSite
    effective December 31, 2012, which was prepared in accordance with NI
    51-101 and COGEH.

Following 2013 net CYGAM production of 83,067 barrels, reserves replacement ratios are as follows:


----------------------------------------------------------------------------
Proved                                       151%
----------------------------------------------------------------------------
Proved plus Probable                         203%
----------------------------------------------------------------------------
Proved plus Probable plus Possible           268%
----------------------------------------------------------------------------

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)
----------------------------------------------------------------------------
                              Net Remaining
Reserve     Gross Remaining Reserves (after
 Category          Reserves        ETAP)(1) Undiscounted     5%          10%
----------------------------------------------------------------------------
                  (barrels)       (barrels)         (M$)   (M$)         (M$)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Proved
 Developed        2,285,900         191,200       10,754  9,944        9,246
----------------------------------------------------------------------------
Proved
 Undeveloped      3,363,800         281,400       10,539  8,014        6,106
----------------------------------------------------------------------------
 Total
  Proved          5,649,700         472,600       21,293 17,958       15,352
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Probable          5,567,100         419,000       23,002 17,321       13,271
----------------------------------------------------------------------------
 Total
  Proved +
  Probable       11,216,800         891,600       44,295 35,279       28,623
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Possible          7,032,600         428,400       26,159 17,510       12,242
----------------------------------------------------------------------------
 Total
  Proved +
  Probable +
  Possible       18,249,400       1,320,000       70,454 52,789       40,865
----------------------------------------------------------------------------

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:


----------------------------------------------------------------------------
NPV (M$)        December 31, 2013(1) December 31, 2012(2)      Increase
                ------------------------------------------------------------
                Undiscounted   NPV10 Undiscounted   NPV10 Undiscounted NPV10
----------------------------------------------------------------------------
Proved                21,293  15,352       19,370  14,410         9.9%  6.5%
----------------------------------------------------------------------------
Proved +
 Probable             44,295  28,623       38,402  25,720        15.3% 11.3%
----------------------------------------------------------------------------
Proved +
 Probable+Possib
 le                   70,454  40,865       60,223  37,385        17.0%  9.3%
----------------------------------------------------------------------------

1.  Information derived from the Report.
2.  Information derived from the 2012 Report.

Crude produced from the TT Field sells at close to Brent prices. Future revenues in the Report were estimated using the following price forecast for Brent crude:


----------------------------------------------------------------------------
                                2014      2015      2016      2017      2018
----------------------------------------------------------------------------
C$/barrel (1)                 110.53    107.89    105.47    102.84    103.16
----------------------------------------------------------------------------

1.  Assumes exchange rate US$1.00 = C$1.05.

Contingent Resources

In the Report reserves have only been assigned to a portion of the mapped field area with the remaining field areas classified as contingent resources:


----------------------------------------------------------------------------
                                   Gross Contingent
                                         Resources        Company Contingent
Resource Category                            (bbls)         Resources (bbls)
----------------------------------------------------------------------------
Low                                      10,816,000                  782,300
----------------------------------------------------------------------------
Best                                     13,520,000                  977,900
----------------------------------------------------------------------------
High                                     18,026,000                1,303,800
----------------------------------------------------------------------------

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, 2014 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.

"Additional data from wells drilled in 2013 together with longer production history has increased our knowledge of the property and it is gratifying that we have more than replaced production over the past year," said David Taylor, President and CEO of CYGAM. "The joint venture has now embarked on a third phase of development drilling with six vertical wells planned to be completed and put on production during the first half of 2014."

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 five exploratory permits in Italy plus three exploratory permits and the BBT Production Concession in Tunisia which together encompass a total of approximately 2.5 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

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.

Latest Stories
For organizations that have amassed large sums of software complexity, taking a microservices approach is the first step toward DevOps and continuous improvement / development. Integrating system-level analysis with microservices makes it easier to change and add functionality to applications at any time without the increase of risk. Before you start big transformation projects or a cloud migration, make sure these changes won’t take down your entire organization.
SYS-CON Events announced today that Hitrons Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Hitrons Solutions Inc. is distributor in the North American market for unique products and services of small and medium-size businesses, including cloud services and solutions, SEO marketing platforms, and mobile applications.
With the introduction of IoT and Smart Living in every aspect of our lives, one question has become relevant: What are the security implications? To answer this, first we have to look and explore the security models of the technologies that IoT is founded upon. In his session at @ThingsExpo, Nevi Kaja, a Research Engineer at Ford Motor Company, will discuss some of the security challenges of the IoT infrastructure and relate how these aspects impact Smart Living. The material will be delivered i...
Historically, some banking activities such as trading have been relying heavily on analytics and cutting edge algorithmic tools. The coming of age of powerful data analytics solutions combined with the development of intelligent algorithms have created new opportunities for financial institutions. In his session at 20th Cloud Expo, Sebastien Meunier, Head of Digital for North America at Chappuis Halder & Co., will discuss how these tools can be leveraged to develop a lasting competitive advanta...
What if you could build a web application that could support true web-scale traffic without having to ever provision or manage a single server? Sounds magical, and it is! In his session at 20th Cloud Expo, Chris Munns, Senior Developer Advocate for Serverless Applications at Amazon Web Services, will show how to build a serverless website that scales automatically using services like AWS Lambda, Amazon API Gateway, and Amazon S3. We will review several frameworks that can help you build serverle...
Your homes and cars can be automated and self-serviced. Why can't your storage? From simply asking questions to analyze and troubleshoot your infrastructure, to provisioning storage with snapshots, recovery and replication, your wildest sci-fi dream has come true. In his session at @DevOpsSummit at 20th Cloud Expo, Dan Florea, Director of Product Management at Tintri, will provide a ChatOps demo where you can talk to your storage and manage it from anywhere, through Slack and similar services ...
VeriStor Systems has announced that CRN has named VeriStor to its 2017 Managed Service Provider (MSP) 500 list in the Elite 150 category. This annual list recognizes North American solution providers with cutting-edge approaches to delivering managed services. Their offerings help companies navigate the complex and ever-changing landscape of IT, improve operational efficiencies, and maximize their return on IT investments. In today’s fast-paced business environments, MSPs play an important role...
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From ...
SYS-CON Events announced today that Cloudistics, an on-premises cloud computing company, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Cloudistics delivers a complete public cloud experience with composable on-premises infrastructures to medium and large enterprises. Its software-defined technology natively converges network, storage, compute, virtualization, and management into a ...
Keeping pace with advancements in software delivery processes and tooling is taxing even for the most proficient organizations. Point tools, platforms, open source and the increasing adoption of private and public cloud services requires strong engineering rigor - all in the face of developer demands to use the tools of choice. As Agile has settled in as a mainstream practice, now DevOps has emerged as the next wave to improve software delivery speed and output. To make DevOps work, organization...
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
My team embarked on building a data lake for our sales and marketing data to better understand customer journeys. This required building a hybrid data pipeline to connect our cloud CRM with the new Hadoop Data Lake. One challenge is that IT was not in a position to provide support until we proved value and marketing did not have the experience, so we embarked on the journey ourselves within the product marketing team for our line of business within Progress. In his session at @BigDataExpo, Sum...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm. In his Day 3 Keynote at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, will explore t...
SYS-CON Events announced today that Ocean9will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Ocean9 provides cloud services for Backup, Disaster Recovery (DRaaS) and instant Innovation, and redefines enterprise infrastructure with its cloud native subscription offerings for mission critical SAP workloads.
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.