Cygam Energy Says Oum Zoughar 2 to be Suspended

Cygam Energy and partner Storm Ventures have completed the drilling and evaluation of the Oum Zoughar 2 exploratory test on the Remada Sud permit in Tunisia. The well has been suspended after the evaluation of low permeability hydrocarbon bearing zones in the Ordovician and in the Silurian Acacus formation. Light oil was recovered on swab tests, however the potential daily production rates without additional artificial stimulation would not justify the installation of a single well battery at this time. Further exploratory activity on the five additional prospects identified on the 1.25 million acre block will be proposed after integration of all newly acquired data and discussions with Storm and the Tunisian authorities. Although disappointed with the lack of commercial success in the first well on the permit, we are encouraged that light oil recovered during the completion confirms a significant northern extension of the Acacus play over a large portion of the Remada Sud block.

Cygam has earned a 20% working interest in the southern half of the permit by participating in the Oum Zoughar 2 exploratory well and can earn a similar interest in the northern half by paying 30% of the costs of a well which may be proposed there.

In Tunisia, Cygam also holds a 37.5% working interest in the 989,000 acre Jorf permit and a 100% working interest in the 1.08 million acre Sud Tozeur permit.