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Cygam Energy Inc.

Cygam Energy Inc.

News Release

December 9, 2008

CYGAM ENERGY INC. FINALIZES JOINT VENTURE AGREEMENT WITH CANOEL INTERNATIONAL ENERGY LTD. ON THREE EXPLORATION PERMITS IN TUNISIA
CYGAM ENERGY INC. (TSX Venture Exchange: CYG)


Calgary, Alberta, December 9, 2008 - Cygam Energy Inc. ("Cygam") is pleased to announce that all the conditions precedent to finalize a Farmout and Participation Agreement dated July 10, 2008, with Canoel International Energy Ltd. ("Canoel") have been satisfied as of December 9, 2008. Canoel will earn an 11% working interest in the Bazma, Sud Tozeur and Jorf permits operated by Cygam in central Tunisia by paying 18.7% of all seismic operations, exploratory costs and drilling/completion costs of the first well to be drilled in the Bazma and Sud Tozeur permits and 15.4% of seismic and drilling/completion costs of the first well to be drilled in the Jorf permit.

Canoel's participation with Cygam in the three Tunisian exploration permits was Canoel's qualifying transaction under TSX Venture Exchange policies. In connection with the qualifying transaction, Canoel completed a private placement of 9,221,600 units at $0.25 per unit, with each unit consisting of one common share and one common share purchase warrant exercisable at $0.40 per common share until November 21, 2010. Cygam subscribed for 1,960,000 units, pursuant to the private placement and now owns 1,960,000 common shares of Canoel, representing 12.4% of the total outstanding shares of that company, and 1,960,000 warrants. Cygam purchased the units to assist in the development of the Tunisian permits and does not intend to increase its shareholding position in that company.

This News Release includes certain "forward-looking statements". All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding interpretation of seismic and well 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 or prevent the Corporation from carrying out the Bhayra Rigo # 1 testing program as scheduled, including but not limited to unavailability of equipment and manpower. The existence of discoveries in structures and formations in the regions where Cygam has permits does not necessarily assure that the company will be successful. 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, President or
Ali Rawji, Chief Financial Officer
Tel: (403) 802-6983, Fax: (403) 802-6984
E-mail: dario.sodero@cygamenergyinc.com or ali.rawji@cygamenergyinc.com

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