Cygam Signs New Exploration Permit in Tunisia

Cygam Energy's subsidiary, Rigo Oil Company Limited, has acquired a new exploration permit in Tunisia. An Agreement relating to the exploration activities to be carried on the Bazma permit was signed in Tunis on February 24, 2006 between Rigo and Enterprise Tunisienne d'Activites Petrolieres ("ETAP"). Rigo has a 100% working interest in this permit and has already received expressions of interest from other companies willing to participate in exploratory activities in the area.

The Bazma permit, located onshore south-central Tunisia, is the western extension of the Jorf permit where Rigo currently holds a 37.5% working interest and encompasses an area of approximately 400,000 acres. Available seismic data indicates the presence of several potential structures on the block. Prospective reservoirs include Triassic Tagi sandstones and Permian carbonates. The Triassic Tagi produces gas and condensate from the Baguel and Tarfa fields immediately adjacent to the southwest corner of the Bazma permit. A northbound pipeline carrying gas and condensate from the Baguel and Tarfa fields crosses the Bazma permit and joins an eastbound pipeline carrying Ordovician gas from the El Franig and Sabria fields located 50 kilometers west of Bazma. These two pipelines, after traversing the Bazma and Jorf permits, join a major gas pipeline carrying gas from the giant El Borma oil and gas field in southern Tunisia to the Gulf of Gabes. A northbound oil pipeline carrying oil from southern Tunisian fields runs parallel to the eastern boundary of the Bazma permit, on the Jorf block, and connects to the La Skhira oil terminal in the Gulf of Gabes.

Cygam is currently re-interpreting extensive existing seismic data on the Bazma permit and will reprocess selected seismic lines in order to finalize potential drilling locations. Bazma is the fourth concession in Tunisia in which Rigo has an interest.