Cygam Announces Additional Jorf Farmout

Cygam Energy Inc. said that an agreement has been signed with Pennine Petroleum Corporation whereby Pennine will increase its paying interest in a new 2D seismic program in the Jorf permit to 30%. In addition, Pennine will also pay 30% of drilling and completion costs of a 2500 meter exploratory well to earn a 20% interest in the first identified drillable structure, with a further option to farm-in on other structures within the concession on the same terms.

Cygam also announced that the 164-km seismic program has been completed at Jorf. Data processing is expected to be completed by mid April and will be used to finalize the precise location for an exploratory well planned for late June, 2007. Two major separate anomalies within an extensive reef development area had been identified through the interpretation of approximately 2,000 kilometers of existing seismic data. The two identified anomalies are interpreted as being reef build-ups of upper to lower Permian age, with significant thickness and lateral extent. Once the new seismic data has been interpreted and integrated with the existing older vintage data, Cygam and its partners intend to determine which anomaly will be drilled first. A drilling contract is expected to be finalized shortly and Cygam has already acquired long delivery items such as wellhead, casing and related equipment.

The Jorf permit, located onshore south-central Tunisia, encompasses an area of approximately one million acres. The northern boundary of the exploration permit is within 35 kilometers of the Gulf of Gabes. Major oil and gas pipelines from the giant El Borma oil and gas field and other southern Tunisian oil fields traverse the Jorf block (within 10 to 40 kilometers, respectively, from the two potential locations) and connect to the La Skhira oil terminal in the Gulf of Gabes.

Cygam also has completed a 64 km 2D seismic delineation program on the Sud Tozeur permit. This new seismic data will be integrated with previous extensive data coverage on the Sud Tozeur permit in order to finalize the best drilling location on a large structure with Triassic and Ordovician reservoir potential.

The Corporation also wishes to announce that on March 14, 2007, the approval by the Tunisian Hydrocarbon Committee has been received to convert the Sud Tozeur Prospecting License into a four year Exploration Permit. Official confirmation by the Department of Energy is expected shortly.


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