Candax Energy Inc.
TSX : CAX

Candax Energy Inc.

April 28, 2008 09:06 ET

Candax Announces 2008 Drilling Program

TORONTO, ONTARIO--(Marketwire - April 28, 2008) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Candax Energy Inc. ("Candax") (TSX:CAX) is pleased to announce that rig and specialist drilling management service contracts have been signed for the implementation of its onshore Tunisian drilling program in 2008.

Ezzaouia Field (31.4% Working Interest)

The Tunisian national drilling company CTF6 rig is currently being mobilized from northwest Tunisia to the Ezzaouia field to commence a back to back, two well campaign to drill Ezzaouia wells 17 and 18. These infill development wells are targeted at increasing proved reserves and adding significant production. The wells can be tied into existing facilities and brought immediately into production upon successful completion. The Ezzaouia 17 well is due to spud by mid May and is targeting an un-drained, potentially significant fault block at the east end of the field. Ezzaouia 18 will be drilled in the west of the field to augment production in the most prolific fault block yet encountered in the field.

Negotiations are ongoing to procure a rig to undertake a work-over program on several wells in Ezzaouia, including the Ezzaouia 5 sidetrack, to further evaluate the potential for bypassed oil in the Cretaceous Zeebag formation. During 2007, the Ezzaouia partners sidetracked Ezzaouia 10, the only producing well from the Zeebag, and discovered significant levels of bypassed oil. Prior to the sidetrack, Ezzaouia 10 was producing about 200 bopd and following the sidetrack, the well initially produced over 2,000 bopd and is still producing at over 400 bopd.

On the Deep Triassic prospect at Ezzaouia, negotiations with all the partners for drilling are ongoing, and Candax remains fully committed to reaching an agreement so that an exploration well can be spudded on this multi-Tcf prospect early in 2009.

Chaal (60% Working Interest)

Following completion of the program at Ezzaouia, the CTF6 rig will be redeployed to drill the high-angle sidetrack of the Chaal-1 gas discovery made in 2006. The well is expected to spud in late August or early September. A contract has been signed with Houston-based NewTech, drilling specialists with extensive experience in high-pressure/high-temperature operations. The objective of the Chaal sidetrack is to fully evaluate and test the commerciality of the gas discovery, and will likely include a large acid fracturing to optimize flow from the fractured reservoir, followed by a long term test. On demonstration of commercial flow rates, the well exposes Candax shareholders to a high-case unrisked Contingent Resource of 850 Bcf (Ryder-Scott 2007). A two year extension to the Chaal Exploration Permit has been agreed to, and administrative formalities with the Tunisian Government initiated, which require no additional work program commitments beyond the planned sidetrack.

Robbana (80% Working Interest)

Candax is also preparing a program and initiating rig negotiations to evaluate the significant 3 million barrel Contingent Resource reported (Ryder-Scott 2008) in the Robbana field through the potential implementation of water injection. The objective of the program will be to drill an appraisal/development well down-dip of the producing Robbana-1 well to assess the extent of the reservoir and effectiveness of augmenting recovery with water injection. Drilling is expected to commence in the second half of 2008. Candax also believes that further reserves are present to the west of Robbana-1, along a structural ridge which extends into the Robbana block from the recent Mezrane discovery, where oil was tested at the same stratigraphic level as in Robbana-1. This area will be the focus of a future exploration/appraisal drilling campaign.

Block 1101 Onshore Madagascar (60% Working Interest)

Following the results from the initial geological fieldwork, geochemistry and gravity/magnetics have confirmed the excellent potential of Block 1101, indicating in excess of 5,000 metres of sedimentary section beneath our block together with numerous oils shows. Candax is currently tendering the planned 2D seismic program, which is expected to commence in the third quarter of 2008. Following the encouraging results from initial exploration studies, planned seismic coverage has been increased to include additional areas of the Block. Subject to interpretation of the 2D seismic results and further field work planned for 2008, it is anticipated that the first exploration well will be drilled in 2009.

Michael Wood, President & CEO, commented:

"As the El Bibane project nears completion with the on-going tie-in of El Bibane 3 and production optimization of El Bibane 4, Candax is about to commence a significant onshore development and appraisal drilling program. Our objectives are to maximize our onshore oil production and to appraise the high impact potential of both the Chaal and Robbana projects. In the second half of 2008, the sidetrack of Chaal-1 will appraise the commercial viability of an 850 Bcf identified resource, and the downdip Robbana well will test the potential to add significant reserves through water injection. We are also making significant progress on our other high impact exploration projects in Tunisia, Madagascar and elsewhere. The Candax team is excited about results to date, and remains focused to maintain the momentum established so far this year to ensure further increases in net oil production are brought on-stream and to use the drill-bit to access some of the world class potential in our exploration/appraisal portfolio."

Candax Energy Inc. is an international energy company with its head office in Toronto, Ontario, Canada and management offices in London, Dubai and Tunis. The Company holds a number of concessions in Tunisia through its subsidiary companies and is involved in the exploration and production of oil, gas and power generation in the country. Candax was formed through the combination of a highly experienced executive management team with successful Canadian founders and financiers, to develop an international upstream oil and gas project portfolio. Candax is initially focusing its growth activities on production and development projects in the Middle East and North Africa, where the group has strong relationships as well as extensive management experience.

This press release includes "forward looking statements", within the meaning of applicable securities legislation, which are based on the opinions and estimates of Management and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "budget", "plan", "continue", "estimate", "expect", "forecast", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar words suggesting future outcomes or statements regarding an outlook. Such risks and uncertainties include, but are not limited to, risks associated with the oil and gas industry (including operational risks in exploration development and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections in relation to production, costs and expenses; the uncertainty surrounding the ability of Candax Energy Inc. to obtain all permits, consents or authorizations required for its operations and activities; and health safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the ability of Candax Energy Inc. to fund the capital and operating expenses necessary to achieve the business objectives of Candax Energy Inc., the uncertainty associated with commercial negotiations and negotiating with foreign governments and risks associated with international business activities, as well as those risks described in public disclosure documents filed by Candax Energy Inc. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in securities of Candax Energy Inc. should not place undue reliance on these forward-looking statements. Statements in relation to "reserves" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described can be profitably produced in the future.

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Contact Information

  • Candax Energy Inc.
    John Clarke
    Executive Vice President, Corporate
    (416) 361-2824
    (416) 364-5400 (FAX)
    Email: jclarke@candax.com
    Website: www.candax.com
    or
    Pro-Edge Consultants Inc.
    Tracy Weslosky or Fred Cowans
    Managing Partners
    1-866-544-9622 or (416) 581-0177
    Email: info@pro-edge.com