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Cygam Updates Status of the Sud Tozeur Permit

Source: 12/15/2014, Location: Africa

CYGAM Energy Inc has received acknowledgement from the Tunisian authorities to a revised proposal regarding the sale process for the Sud Tozeur permit in Tunisia.

Sud Tozeur Exploration Permit (CYGAM 100%)
Further to our news releases of August 18, 2014 and November 10, 2014 Rigo Oil Company Limited, a wholly owned subsidiary of CYGAM, submitted a revised proposal to the Tunisian authorities on November 27, 2014. In this proposal, US$2.5 MM of the US$ 5.0 MM penalty associated with renewal of the permit, would be paid to the authorities by March 31, 2015 (the "March 31, 2015 instalment") and the balance of US$2.5 MM by June 30, 2015 (the "June 30, 2015 instalment").

In the event that the March 31, 2015 instalment of the penalty is not paid, Rigo agreed that the permit would be cancelled and a total penalty of US$8.0 MM, reflecting termination of the permit, would be payable. Furthermore in the event Rigo pays the March 31, 2015 penalty but not the June 30, 2015 penalty, Rigo agreed that the permit would be cancelled and a total remaining penalty of US$5.5 MM would be payable. As security for these payments, Rigo proposed to assign a share of its revenues from the BBT Concession to ETAP, the Tunisian state oil company. On December 9, 2014, the Ministere de l'Industrie de l'Energie et Des Mines ("DGE") acknowledged receipt of the proposal and indicated that they had no comments.

As previously announced, Rigo has entered into a Sale and Purchase Agreement with YNG Exploration Limited ("YNG"), a private company, whereby YNG will acquire Rigo's 100% interest and all associated commitments in the Sud Tozeur permit. Under this agreement, YNG agreed to pay US$2.0 MM of the first US$2.5 MM instalment of the total US$5.0 MM penalty. The transaction is subject to a number of terms and conditions being satisfied including: payment of the Penalty in lieu of the undrilled commitment well with this payment being deferred and paid in installments on terms to be agreed with the Tunisian government; Tunisian government approval to transfer the permit to YNG and acceptable security to be provided to YNG to guarantee Rigo's payment of its share of the penalty.

As disclosed previously, the Company is pursuing strategic alternatives including, recapitalization, sale of assets, merger or outright sale of the Company. There can be no assurance that the Company will be successful in these initiatives or in its discussions with Tunisian authorities.

Special shareholder meeting
The Company will hold its special meeting (the "Meeting") on January 14, 2015, at 2:30 p.m. (Calgary time) to approve the consolidation of the Company's shares. The record date for shareholders to receive notice and be entitled to vote at the Meeting is December 8, 2014. The Meeting will be held at the offices of Burnet, Duckworth & Palmer LLP at Suite 2400, 525 - 8th Avenue S.W., Calgary, Alberta.

For more information about related Opportunities and Key Players visit East Africa Projects

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

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