CYGAM Energy Inc. (CYG.V), an emerging oil and gas company with interests in Tunisia and Italy, has filed its Interim Financial Results and Management Discussion & Analysis for the three and six months ended June 30, 2012 pursuant to the requirements of the Canadian Securities Administrators.
CYGAM's Q2 and year to date results showed significant improvements in both production volumes and revenues over prior years arising from the TT Field that is contained within the Bir Ben Tartar ("BBT") Concession in the Sud Remada Permit. Strong pricing, excellent netbacks and cash flow from its Brent- priced Tunisian oil production resulted in CYGAM's continued profitability in 2012.
Under the production sharing contract established for the Sud Remada Permit with the Tunisian state oil company, Enterprise Tunisienne d'Activities Petrolieres ("ETAP"), CYGAM holds a 14 percent working interest through its wholly owned subsidiary Rigo Oil Company Tunisia Ltd., in partnership with Storm Ventures International, a subsidiary of Chinook Energy Inc. ("Chinook"), who holds the remaining 86 percent working interest and operates.
Highlights of the quarter and year to date
-- Gross production for the three months ended June 30, 2012 from the TT Field averaged 1,928 bopd (170.9 bopd CYGAM net, post ETAP) from eight wells; 2,034 bopd (177.4 bopd CYGAM net, post ETAP) for the six months ended June 30, 2012;
-- Oil net revenue was $905,325 for the three months ended June 30, 2012; $2,990,080 for the six months ended June 30, 2012. At June 30, 2012, 8,631 barrels of oil were held in inventory and were sold in July;
-- Operating netbacks for the three months ended June 30, 2012 were $82.20 per barrel (on revenue of $112.23 per barrel with operating costs of $29.03 per barrel); $88.70 per barrel (on revenue of $117.86 per barrel with operating costs of $29.15 per barrel) for the six months ended June 30, 2012;
-- Income of $245,785 in the second quarter of 2012 increased from a loss of $1,751,090 in the second quarter of 2011;
-- A horizontal well (TT16) was drilled during the second quarter in the BBT Concession and is the first multi-stage, hydraulically fractured horizontal well in Tunisia. This well was completed in mid-July and has been handed over to production with initial rates stabilizing at around 800 bopd. Including the TT16 well, gross field production averaged 2,664 bopd over the ten days up to Aug 20, 2012;
-- Subsequent to June 30, 2012, a second horizontal well (TT13) was spudded on July 7, 2012. The well has been drilled to a measured depth of 2,637 metres and completion operations are expected to commence early in September, 2012.
-- In Italy, a new law has been passed modifying the drilling moratorium which allows activities on CYGAM's offshore Elsa discovery and Aretusa prospect to proceed.
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