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.
FOR FURTHER INFORMATION PLEASE CONTACT:
CYGAM Energy Inc
David Taylor
President and Chief Executive Officer
403 605 5117
david.taylor@cygamenergy.com
CYGAM Energy Inc
Al Robertson
Chief Financial Officer
403 452 6883
al.robertson@cygamenergy.com
Cygnus Metals (TSXV:CYG)
Historical Stock Chart
From Dec 2024 to Jan 2025
Cygnus Metals (TSXV:CYG)
Historical Stock Chart
From Jan 2024 to Jan 2025
