PCI.L Regulatory News (PCI)

23 Sep 2009 07:00



Petroceltic International plc

Independent assessment of Elsa discovery in Italy

Petroceltic International plc ("Petroceltic" or "the Company"), the upstream oil and gas exploration and production company focused on North Africa and the Mediterranean has received the following announcement from Cygam Energy Inc. its partner in the B.R268.RG permit ("the Permit"), located in the central Adriatic Sea offshore Italy and encompassing an area of approximately 31,300 acres (127 km2). 

Petroceltic has a 40% working interest in the Permit. The remaining interest is held by Cygam Energy Inc. which has a 60% working interest, inclusive of a 20% carried interest in the first well drilled on the block.

Ends

For further information, please contact:

Petroceltic

Brian O'Cathain Chief Executive Tel: +353 (1) 421 8300

Alan McGettigan Finance Director

Pelham PR

Philip Dennis Tel: +44 20 7337 1516 

Klara Kaczmarek Tel: +44 20 7337 1524

Murray Consultants

Joe Murray Tel: +353 (1) 4980300

Davy

Hugh McCutcheon Tel: +353 1 6796363

John Frain

Notes to Editors:

Petroceltic International plc is a leading Upstream Oil and Gas Exploration and Production Company, focused on the Mediterranean and North African area, and listed on the London Stock Exchange's AIM Market and the Irish Sock Exchange's IEX Market. The Company has exploration and appraisal assets in Algeria, Tunisia and Italy.

NEWS RELEASE

September 21, 2009

CYGAM ENERGY INC. ANNOUNCES INDEPENDENT CONTINGENT RESOURCE ASSESSMENT RESULTS FOR THE B.R268.RG PERMIT, OFFSHORE ITALY 

CYGAM ENERGY INC. (TSX Venture Exchange: CYG)

Calgary, Alberta, September 21, 2009. Cygam Energy Inc. ("Cygam" or the "Corporation") is pleased to announce that it has received an independent assessment of contingent oil and gas resources on the B.R268.RG permit ("the Permit"), located offshore Italy, in the central Adriatic Sea, and encompassing an area of approximately 31,300 acres (127 km2). 

DeGolyer and MacNaughton Canada Limited ("D&M"), a worldwide petroleum and engineering consulting firm, has determined that a best estimate of the unrisked contingent recoverable oil and gas resource attributable to the 13.65 km2 Elsa structure identified in the Permit is 104.23 million barrels of oil and 31.49 Bcf of gas. 

The Petroleum Initial in Place (PIIP), expressed as oil, on the Elsa structure was estimated by D&M at 521 million barrels for the best case scenario (403 million for the low case and 556 million for the high case). 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.

While existing seismic data on the Permit clearly shows several large structures, with closure, D&M was asked to evaluate only the Elsa 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. Structural maps of the B.R268.RG Permit may be viewed on the Cygam website at www.cygamenergy.com

Contingent Resources

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"). Capitalized terms relating to resource classifications used in this press release are based on the definitions and guidelines in the Canadian Oil and Gas Evaluation Handbook ("COGEH").

D&M's independent estimates of the gross pool contingent oil and gas recoverable resources quantities, as of July 31, 2009, are summarized as follows, expressed in thousands of barrels (mbbl) for oil and in billions of cubic feet (Bcf) for gas:

---------------------------------------------------------------------------------------------------------- B.R268.RG Gross Contingent Recoverable Resources (1)

-----------------------------------------------------------------------

Unrisked

-----------------------------------------------------------------------

Low Best High

Estimate Estimate Estimate

(2) (3) (4)

------------------------------------------------------------------------------------------------------------

Oil - thousand barrels 40,286 104,230 166,654 

------------------------------------------------------------------------------------------------------------

Gas - billion cubic feet 4.26 31.49 89.42 

Estimates of Cygam's gross working interest (60-percent interest) contingent recoverable oil and gas resources quantities, as of July 31, 2009, are summarized as follows, expressed in thousands of barrels (mbbl) for oil and in billions of cubic feet (Bcf) for gas:

Low Best High

Gross Working Interest Contingent 24,172   62,538  99,992

Recoverable Oil Resources, mbbl

Gross Working Interest Contingent 2.56 18.89 53.65

Recoverable Gas Resources, Bcf

Notes:

(1) Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factor such as economic, legal, environmental, political, and regulatory matters or a lack of markets. It is also appropriate to classify as contingent resources the estimated discovered recoverable quantities associated with a project in the early evaluation stage. 

The contingencies identified in this report are environmental and economic. An environmental impact assessment report for the proposed Elsa-2 exploration well has been submitted recently to the Italian Ministry of Environment; however, approval has not been received as of the effective date of this report. The economic contingency will be removed with the drilling of an additional well with test rates that demonstrate economic viability of development of the field. 

Estimates of resources always involve uncertainty, and the degree of uncertainty can vary widely between accumulations/projects and over the life of a project. Consequently, estimates of resources should generally be quoted as a range according to the level of confidence associated with the estimates. The range of uncertainty of estimated recoverable volumes may be represented by either deterministic scenarios or by a probability distribution. Resources should be provided as low, best, and high estimates as follows:

(2) Low Estimate: This is considered to be a conservative estimate of the quantity that will actually be recovered. It is likely that the actual remaining quantities recovered will exceed the low estimate. If probabilistic methods are used, there should be at least a 90 percent probability (P90) that the quantities actually recovered will equal or exceed the low estimate. 

(3) Best (Median) Estimate: This is considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that the actual remaining quantities recovered will greater or less than the best estimate. If probabilistic methods are used, there should be at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best estimate. 

 (4) High Estimate: This is considered to be an optimistic estimate of the quantity that will actually be recovered. It is unlikely that the actual remaining quantities recovered will exceed the high estimate. If probabilistic methods are used, there should be at least a 10 percent probability (P10) that the quantities actually recovered will equal or exceed the high estimate. 

For deterministic estimates of petroleum resources, a range of values is selected for each parameter in the volumetric calculation. This range encompasses a conservative value, or Low case, a Best case value, and a High case value, which represents an upside case for the accumulation. The selection of these values is based on data available in the basin and within the prospective assessment area. The values may be supported by statistical distributions or may be the best judgement of the evaluator. The reader is cautioned that there is no certainty that it will be commercially viable to produce any portion of the resources.

It is expected that drilling operations at the Elsa-2 site will commence in late 2010, subject to rig availability. The well is scheduled to be drilled to a total depth of 4700 metres using a jack-up rig, at a location approximately 7 km from the coast line, in water depth of approximately 33 metres, and in close proximity to the Elsa-1 well drilled into the Elsa structure in 1992. Wireline logs from the Elsa-1 well confirmed the presence of a 65 metres (213 feet) gross hydrocarbon column at that location. The proposed location is approximately 10 km East of the onshore Miglianico-1 discovery well, drilled in 2001, which tested up to 2500 barrels of 34° API oil and 3.5 million cubic feet of natural gas per day. The information on the Miglianico-1 well, which is not yet on production due to a surface lease dispute, was obtained from operator's documents. The Corporation believes the information on the Miglianico-1 well to be relevant to the Elsa prospect, however the reader is cautioned that the information was not prepared by a qualified evaluator or in accordance with the COGEH guidelines.

Cygam has a 60% working interest in the Permit, inclusive of a 20% carried interest in the first well drilled on the block. The remaining 40% working interest is held by Petroceltic International plc.

CYGAM is a Calgary based exploration company with producing exploration properties in Canada and extensive international exploration permits. The main focus of the Corporation is the acquisition, exploration and development of international oil and gas permits, primarily in Italy, Tunisia and the Mediterranean Basin. CYGAM currently holds various interests in six exploratory permits in Italy and four exploratory permits in Tunisia encompassing approximately over 3.5 million gross acres (approximately 1.8 million net acres before pending farm-outs). Visit the CYGAM website at www.cygamenergy.com for more information about CYGAM.

This News Release includes certain "forward-looking statements" including estimates as to the unrisked and risk-adjusted prospective oil and gas resources attributable to the Permit, possibilities of a larger, multi-prospect potential existing within the Permit and, estimates of the quantities of petroleum that are potentially recoverable from the Permit. These estimates involve substantial known and unknown risks and uncertainties, many of which are beyond Cygam's control, including: the impact of general, global economic conditions in Canada and in Italy, industry conditions, changes in laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified operating or management personnel, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility, timing of operations, ability to carry out operations as planned, changes in capital commitments, ability to obtain financing, ability to find appropriate partners, and the ability to obtain required approvals from regulatory authorities. Cygam's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, of any of them do so, what benefits, including the amount of proceeds, that Cygam will derive therefrom. With respect to forward-looking statements made in this press release, Cygam has made assumptions regarding among other things, estimates of capital commitments, ability to generate future cash flows, access to credit facilities and capital markets or partners to meet capital commitments, future prices for crude oil and natural gas and geological and engineering estimates. All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding interpretation of seismic data, future plans and objectives of Cygam Energy Inc., are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated or expected in such statements. In particular, various factors can cause delays in carrying out the Corporation's drilling plans, including but not limited to unavailability of equipment and manpower, and there is no certainty that the drilling program will be carried out when scheduled. Important factors that could cause actual results to differ materially from Cygam's expectations are risks detailed herein and from time to time in the continuous disclosure filings made by Cygam with securities regulators on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.

For further information please contact:

Dario Sodero Giuseppe Rigo 

President and Chief Executive Officer Vice President International Exploration

E-mail: dario.sodero@cygamenergyinc.com  giuseppe.rigo@vegaoil.com

Tel: (403) 802-6983, Fax: (403) 802-6984  Tel: +(39) 06-390 31336

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.