Cygam Energy Inc. (TSX-V: CYG) has announced that its wholly owned subsidiary, Vega Oil S.p.A., has signed a farm out agreement with Petroceltic International plc. Petroceltic assumed the operatorship of the B.R268.RG permit located in the Adriatic Sea, offshore Italy.
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Petroceltic plans to appraise the Elsa structure by drilling and testing an Else-2 well nearby the existing well, Elsa-1, in which a 65 meter oil column was logged in 1992. Drilling operations are expected to begin in September 2010, subject to the receipt of required regulatory approvals.
Under the agreement, Petroceltic has agreed to pay 100% of well costs for the proposed Elsa-2 well. The well is expected to cost around $40 million. Upon the completion of the Else 2 well, Vega and Petroceltic will work on the future development, rights and obligations of the Permit in accordance with the following interests: 30% for Vega and 70% for Petroceltic.
Cygam is a Calgary based exploration company with producing properties in Canada and Tunisia and an extensive portfolio of international exploration permits.
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