Cygam Energy Inc. announced that it has received an independent assessment of reserves and an independent assessment of contingent oil and gas resources for the “TT” structure on the Sud Remada permit (“the Permit”) which is located onshore Tunisia and encompasses an area of 1,173,215 acres (4,748 km2).
According to a press release issued by Cygam, DeGolyer and MacNaughton Canada Limited (“D&M”), a worldwide petroleum and engineering consulting firm, has determined that the total Petroleum Initial in Place (PIIP), expressed as oil, attributable to the central portion of the “TT’ structure around the TT2 discovery well (approximately 24 drilling spacing units) is 105.7 million barrels of oil. Petroleum Initial in Place is that quantity of petroleum that is estimated to exist originally in naturally occurring accumulations. It includes that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations, prior to production, plus those estimated quantities in accumulations yet to be discovered.
Total recoverable proved, probable and possible reserves before production attributed to the same central portion of the “TT” structure were assessed at 15.85 million barrels.
There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.
Cygam’s share of net future revenue may be higher should the Corporation be able to utilize certain tax planning opportunities including the transfer of future exploration expenses from Cygam’s other permits in Tunisia to the Sud Remada permit.
In addition, D&M also provided a separate report for the contingent resources of crude oil and natural gas potentially recoverable from the balance of the “TT” structure. The entire “TT” structure is approximately 67 km2.
The Petroleum Initial in Place (PIIP), expressed as oil, for the balance of the “TT” structure was estimated by D&M at approximately 216 million barrels for the best case scenario (150 million for the low case and 341 million for the high case). D&M also estimated the Original gas cap Gas in Place (OGIP) plus the Total Solution Gas, expressed in million of cubic feet (MMcf), at 465,114 MMcf for the best case scenario (280,919 MMcf for the low case and 713,928 MMcf for the high case).
The D&M resource estimates were prepared in accordance with the requirements of the Canadian National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (“NI 51-101”).
The TT2 discovery well has been flowing light gravity oil (43 degrees to 44 degrees API) since March 22, 2009, at average rates of 200-220 barrels of oil per day and approximately 250 mcf per day. The well has already produced in excess of 65,000 barrels of oil. A recent (third) pressure survey shows no appreciable decline in reservoir pressure.
While existing seismic data on the Permit clearly shows several large structures, with closure, D&M was asked to evaluate only the “TT” structure at this time. The Corporation believes that additional potential also exists in the other structures and may ask D&M to evaluate them at a future time.
Cygam has been advised by the operator of the Sud Remada permit that, following the final interpretation of a large 3D seismic program conducted on the “TT” structure in November, 2009, a first appraisal well is expected to commence drilling in the second quarter of 2010, subject to rig availability, and a second appraisal well is planned for the last quarter of 2010. An exploratory well may also be drilled in late 2010 or in early 2011 on a separate untested 70 km(2) structure (El Bell), located approximately 15 km north-east of the “TT” structure.
Source: Cygam Energy