Cygam Updates Drilling Operations in Tunisia

Cygam Energy Inc. provided an additional update on the TT2 exploration well operated by Storm Ventures International Inc. of Calgary, on the Remada Sud Permit in Southern Tunisia.

The update included that there was potentially significant light oil and gas shows encountered in the main objective (Ordovician Bir Ben Tartar) while coring, and a good yellow fluorescence was observed in the cores. The presence of hydrocarbons was confirmed by one drill stem test which recovered light oil, gas and no water. The test was run approximately 50 meters below the top of the Bir Ben Tartar and log analysis indicates that the potential hydrocarbon column could extend up to approximately another 25 meters below the tested interval. Petrophysical analysis indicates that a secondary objective (Ordovician Jaffara formation) may also be hydrocarbon bearing. Potentially significant gas shows were also encountered while drilling through the Silurian Tanezzuft shale and sandstone sequence above the Bir Ben Tartar main objective.

The main target, the Ordovician Bir Ben Tartar formation, consisting of a massive sequence of sandstones with minor shale streaks, had potentially significant gas and oil shows while coring. Upon reaching total depth at 1,500 meters and after log evaluation, several zones of interest were identified in both the primary and secondary objectives and selected for testing.

Several open-hole drill stem tests were planned but, due to unpredictable mechanical failures, only one test was successfully completed which recovered oil and gas in the down-hole sampler, with no water. During testing operations, well-bore conditions deteriorated and the operator and its partners agreed to suspend testing and set casing to TD.

The operator is currently waiting for the arrival of stimulation equipment from outside Tunisia in order to artificially fracture and production test several zones of interest. It is expected that Schlumberger stimulation equipment should arrive on location by early July. In the meantime, the two cores (approximately 60 meters in total) cut in the Bir Ben Tartar formation have been shipped to Aberdeen, Scotland, for routine and special analyses. A detailed testing and stimulation program is also being prepared.

The Sud Remada permit is located in the Ghadames Basin and is approximately 1.2 million acres in size. Cygam's working interest in the well and in the entire permit is 14%. SVI is the operator and has a 71% working interest; Madalena Ventures Inc. is also a partner with a 15% interest in the well.