CYGAM Energy Inc. (TSX VENTURE:CYG) ("CYGAM", or the "Company"), an emerging oil
and gas company with interests in Tunisia and Italy, has filed its Interim
Financial Results and Management Discussion & Analysis for the three and nine
months ended September 30, 2012 pursuant to the requirements of the Canadian
Securities Administrators. These documents may be viewed on the Company's web
site (www.cygamenergy.com) or at www.sedar.com. An updated corporate
presentation is also now available on the Company's web site.
CYGAM's Q3 and year to date results showed continued significant improvements in
both production volumes and revenues over prior years arising from the TT Field
that is contained within the Bir Ben Tartar ("BBT") Concession in the Sud Remada
Permit. Strong pricing, excellent netbacks and cash flow from its Brent-priced
Tunisian oil production resulted in CYGAM's continued profitability in the third
quarter of 2012.
Under the production sharing contract established for the Sud Remada Permit with
the Tunisian state oil company, Enterprise Tunisienne d'Activities Petrolieres
("ETAP"), CYGAM holds a 14 percent working interest through its wholly owned
subsidiary Rigo Oil Company Tunisia Ltd., in partnership with Storm Ventures
International, a subsidiary of Chinook Energy Inc. ("Chinook"), who holds the
remaining 86 percent working interest and operates.
Highlights of the quarter and year to date
-- Gross production for the three months ended September 30, 2012 from the
TT Field averaged 2,915 bopd (256 bopd CYGAM net, post ETAP) from ten
wells; 2,342 bopd (205 bopd CYGAM net, post ETAP) for the nine months
ended September 30, 2012;
-- Oil net revenue was $2,977,392 for the three months ended September 30,
2012; $5,967,472 for the nine months ended September 30, 2012;
-- Operating netbacks for the three months ended September 30, 2012 were
$78.30 per barrel (on revenue of $105.54 per barrel with operating costs
of $27.24 per barrel); $83.22 per barrel (on revenue of $111.38 per
barrel with operating costs of $28.15 per barrel) for the nine months
ended September 30, 2012;
-- Income of $222,315 in the third quarter of 2012 increased from $137,903
in the third quarter of 2011; For the nine months ended September 30,
2012, income has increased to $842,680 compared to a loss in 2011 of
$1,984,409;
-- During the third quarter a first horizontal well (TT16) was brought on
to production in mid-July with initial gross rates stabilising at around
800 bopd (70 bopd CYGAM net, post ETAP);
-- During the third quarter a second horizontal well (TT13) was drilled and
completed. Production averaged 3,251 bopd (285 bopd CYGAM net, post
ETAP) over the first 10 days of production and was subsequently
restricted to approximately 1,400 bopd gross due to capacity constraints
and limitations on crude oil trucking and surface water handling.
-- The third horizontal well at TT11 was spudded on September 1, 2012 and
completion operations commenced on October 22, 2012. Production over the
first 17 days averaged 1,199 bopd (105 bopd CYGAM net post ETAP) and the
well is currently producing 950 bopd (83 bopd CYGAM net post ETAP).
-- Discussions took place during the quarter relating to the extension of
the expiry dates on the Bazma and Sud Tozeur permits (both 100%) in
Tunisia. As a result in October the Tunisian authorities approved expiry
date extensions to July 26, 2016 for Bazma and May 12, 2014 for Sud
Tozeur;
-- In Italy, a new law was passed modifying the previous drilling
moratorium which allows activities on CYGAM's offshore Elsa discovery
and Aretusa prospect to proceed.
SELECTED FINANCIAL INFORMATION
Three Months ended Nine months ended
September 30, September 30,
2012 2011 2012 2011
----------------------------------------------------------------------------
Oil sales - Tunisia $ 2,977,392 $ 1,591,396 $ 5,967,472 $ 1,823,722
Other income 898 6,218 1,736 24,482
----------------------------------------------------------------------------
2,978,290 1,597,614 5,969,208 1,848,204
Operating costs 768,536 412,434 1,508,156 545,466
General and
administrative 653,295 665,806 1,520,486 2,337,694
Stock based compensation 206,474 161,501 259,518 778,780
(Gain) on sale of
marketable securities - - - (84,927)
Financing costs 18,979 2,506 38,155 5,646
Impairment recovery - - (462,564) -
Loss on sale of
evaluation and
exploration assets - - 83,220 -
(Gain) on sale of
building (118,258) - (118,258) -
Depletion and
depreciation 1,226,949 217,464 2,297,815 249,954
----------------------------------------------------------------------------
2,755,975 1,459,711 5,126,528 3,832,613
Net income (loss) from
continuing operations 222,315 137,903 842,680 (1,984,409)
Income (loss) from
discontinued operations - 29,908 - (302,915)
----------------------------------------------------------------------------
Net income (loss) $ 222,315 $ 167,811 $ 842,680 $(2,287,324)
----------------------------------------------------------------------------
OPERATING
Three Months ended Nine months ended
September 30, September 30,
2012 2011 2012 2011
----------------------------------------------------------------------------
Oil revenues $ 2,977,392 $ 1,591,396 $ 5,967,472 $ 1,823,722
Operating costs $ (768,536) $ (412,434) $(1,508,156) $ (545,466)
----------------------------------------------------------------------------
Net operating income $ 2,208,856 $ 1,178,962 $ 4,459,316 $ 1,278,256
Depletion and
depreciation $ 1,226,949 $ 217,464 $ 2,297,815 $ 249,954
Revenue per boe $ 105.54 $ 114.04 $ 111.38 $ 113.77
Operating costs per boe $ 27.24 $ 29.55 $ 28.15 $ 34.03
----------------------------------------------------------------------------
Operating income per boe $ 78.30 $ 84.48 $ 83.22 $ 79.73
----------------------------------------------------------------------------
(1) Net operating income and netback is a non-IFRS measure. Netback is
defined as revenue less operating costs.
(2) Since ETAP pays all taxes and royalties from its share of production,
net operating income is effectively after tax to the Company.
About CYGAM Energy Inc.
CYGAM is a Calgary based exploration company with extensive international
exploration permits and producing properties in Tunisia. The main focus of the
Company 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 and
three exploratory permits in Tunisia encompassing approximately 2.7 million
gross acres.
Forward Looking Information
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. Forward-looking statements are typically identified by words such
as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will",
"project", "could", "plan", "intend", "should", "believe", "outlook",
"potential", "target" and similar words suggesting future events or future
performance. In particular, this news release contains, without limitation,
forward-looking statements pertaining to future Tunisian operations and
transactions respecting Cygam's Tunisian assets 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, future capital expenditure levels, future oil and natural
gas prices, future oil and natural gas production levels, ability to obtain
equipment in a timely manner to carry out exploration and development
activities, the impact of increasing competition, the ability of Cygam and its
partners to add production and reserves through development and exploitation
activities, certain commodity price and other cost assumptions, the continued
availability of adequate financing and cash flow to fund its planned
expenditures. 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
predictions, forecasts, projections and other 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 Tunisian operations; 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; 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, the continued
impact of shut-in production, environmental risks, competition from other
producers, 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
resulting from surface conditions, 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 affect Cygam's operations and financial results are included reports
on file with Canadian securities regulatory authorities and may be accessed
through the SEDAR website (www.sedar.com) and at Cygam's website
(www.cygamenergy.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.
FOR FURTHER INFORMATION PLEASE CONTACT:
CYGAM Energy Inc
David Taylor
President and Chief Executive Officer
david.taylor@cygamenergy.com
CYGAM Energy Inc
Al Robertson
Chief Financial Officer
(403) 802 6983
al.robertson@cygamenergy.com
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