Candax Energy Inc.

Candax Energy Inc.

June 30, 2015 07:45 ET

Candax Energy Inc. Announces a Delay in Its Next Lifting and a Debt Waiver Renewal

TORONTO, ONTARIO--(Marketwired - June 30, 2015) - Candax Energy Inc. ("Candax" or the "Company") (TSX:CAX), a company with mature oil & gas field developments in Tunisia, announces today that it has not been able to reach agreement with its partner to bring forward sales of its oil inventory stock from November to August 2015.

The cash balance of the Company as at end of June is circa $2 million.

The net Candax share of crude oil in inventory as at end of June 2015, amounts to 57 thousand barrels ("kbbls") (over 94 kbbs available in Maretap Tank storage) which represents an approximate value of $3.5 million at today's Brent prices, rising to 100 kbbls net Candax share (170 kbbs available in Maretap Tank storage) by end of September, with a forecasted average monthly net production of 13.5 kbbls (25 kbbls gross production including partners).

Based on current business assumptions, and assuming that oil sales revenues are delayed until December 2015, the company would likely experience a cash shortfall by the end of September 2015. However the Company forecasts a positive cash balance at the end of 2015, once oil sales proceeds have been received.

The Management, with the support of the Board of Directors, is studying cost reductions and rescheduling of its current liabilities. The Company is also actively working on options to increase working capital, including rescheduling debt and interest payments, pre-financing its crude oil inventory, advancing sales of crude oil, and the sale or lease back of assets.

The Company also announces that it has obtained from Geofinance NV, major debtholder and shareholder of the Company, a further extension of 21 days on the waiver granted on January 29, 2015 up to July 22, 2015 under a facility agreement. Geofinance NV has agreed not to seek any remedy under such facility agreement in respect of the $3.5 million unpaid amount until July 22, 2015, or earlier in specific circumstances. A copy of the amendment and waiver letter will be filed publicly by the Company and available on SEDAR.

The company has also decided to explore the option to voluntarily delist from the Toronto Stock Exchange ("TSX") to another exchange including the TSX Venture Exchange (TSX-V) and the Canadian Securities Exchange (CSE). Both such exchanges have lower listing requirements but it is not confirmed that the Company could meet the listing requirements on either exchange. Due to the expenditure requirements for a senior listing, the Board is considering whether or not it would be in the best interests of shareholders to transition to another exchange, thereby further reducing costs.


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.

About Candax

Candax is an international energy company with offices in Toronto and Tunis. The Candax group is engaged in exploration and the production of oil and gas in Tunisia and holds a royalty interest in an exploration permit in Madagascar.