Candax Energy Inc.

Candax Energy Inc.

April 10, 2006 13:43 ET

Candax Announces Preliminary Drilling Update on Chaal-1 Well

TORONTO, ONTARIO--(CCNMatthews - April 10, 2006) -

Not for distribution to United States newswire services or for dissemination in the United States.

Candax Energy Inc. ("Candax") (TSX:CAX) is pleased to provide an update on the drilling of the Chaal-1 well which was spudded on February 5, 2006. On April 3, 2006, the well penetrated a hydrocarbon bearing section in the target reservoir, the Middle/Lower Nara, at a depth of 4,036 meters. To date, a gross reservoir interval of 304 meters has been drilled, with the well depth currently at 4,340 meters. There have been excellent gas shows throughout this 304 meter interval, including C5 (condensate) at numerous intervals since entering the reservoir. Drilling through the reservoir interval has been steady, with numerous gas kicks encountered. Candax has been gradually increasing the mud weight during drilling to maintain the pressure balance and to minimize potential formation damage prior to testing.

At a depth of 4,340 metres another significant gas kick was experienced, and the well again began flowing. At this point, it was decided to stop drilling and run an intermediate log suite. Schlumberger are on standby at the well site to begin logging once the well has been stabilized. Following the intermediate logging, it is anticipated that drilling will continue until the full hydrocarbon bearing section has been penetrated. Once total depth is reached, further logging will take place and then the well will be tested following log analysis.

Michael Wood, President & CEO commented, "The preliminary results from the Chaal-1 well are extremely encouraging and we are awaiting the results from the logging to establish the full hydrocarbon column and testing to establish the production capability of the reservoir of the large gas/condensate structure at Chaal. The Company will endeavour to provide further results as soon as these become available."

Candax Energy 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 and 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.

Contact Information

  • Candax Energy Inc.
    John Clarke
    Executive Vice President, Corporate
    (416) 361-2824
    416) 364-5400 (FAX)
    Pro-Edge Consultants Inc.
    Fred Cowans or Tracy Weslosky
    Managing Partners
    (866) 544-9622 or (416) 581-0177