Cygam Energy's wholly owned subsidiary, Rigo Oil Company Limited, has completed a new 2D seismic acquisition survey of approximately 290 km on the Bazma permit. The survey, completed at no cost to Rigo, was conducted jointly with a large U.S. independent oil and natural gas company as per the terms of the Option and Farm-in Agreement announced on October 14, 2009.
The seismic survey was designed to further delineate several deep-seated structures on the Bazma permit. Rigo is the operator of the permit, located onshore in central Tunisia and covering an area of 1,616 km2 (approximately 400,000 acres), and currently holds a 100% interest in all formations.
Under the terms of the Agreement, the U.S. Company will also reprocess existing 2D seismic data and will have the option to conduct a 3D seismic survey and to earn an interest by drilling a deep well on the permit. The U.S. Company brings significant in-depth experience in the exploration and development of similar prospects, which will be very beneficial to the evaluation and potential exploitation of any newly identified reservoir.
Cygam is currently finalizing a drilling program to test the shallower Triassic formation at the seismically defined Frida structure on the permit. Subject to rig availability, this well is scheduled to be drilled in mid-2010 to a total depth of approximately 2,500 metres at a location approximately 6 km from the Tarfa-1 producing well and in close proximity (5 km) to an existing pipeline. The U.S. Company has the option to participate in the costs of drilling such a well.
Cygam is also pleased to announce that a 175 km2 3D seismic program and a smaller 2D seismic survey were completed in late 2009 in the Sud Remada permit operated by Storm Venture International Inc. Data from the 3D seismic program will be used to finalize drilling locations for two appraisal wells on the large TT structure where the initial discovery well has been flowing light gravity oil since March 2009. The operator has advised that it plans to drill the first appraisal well in the second quarter and the second appraisal well in the last quarter of 2010, subject to rig availability.
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