TORONTO, ONTARIO--(Marketwired - May 8, 2014) - Candax Energy Inc. ("Candax" or the "Company") (TSX:CAX), a company focused on mature oil field development in Tunisia, today announced financial and operating results for the quarter ended March 31, 2014. The unaudited financial statements, notes and MD&A pertaining to the period are available on the System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.com and by visiting www.candax.com. All monetary figures reported herein are U.S. dollars unless otherwise stated.
Selected Operational & Financial Highlights
- Production, net of royalties, for the quarter ended March 31, 2014 was 491 bopd compared to 472 bopd for the same period last year. The increase was a result of the improved production due to a successful workover campaign in the Ezzaouia field. In addition, the gas cycling program on the El Bibane asset continued to yield good results;
- The workover campaign on Ezzaouia to convert a number of wells from jet pumping extraction methodology to beam pump methodology was completed during the quarter, however, one well, Ezzaouia-9, is still expected to be brought back into production in June 2014;
- Revenue for the quarter ended March 31, 2014 was $nil compared to $nil for the same period last year. The lack of revenue was due to the seasonal time interval between oil liftings, which resulted in no oil being transported to market during the first quarter. The next lifting and resultant revenue recognition is scheduled for May, 2014;
- The Company reported a loss for the quarter ended March 31, 2014 of $1.5 million compared to a loss of $1.9 million for the same period last year. The loss for both periods was reflective of the fact no revenue was recognized for either period;
- As at March 31, 2014, Candax held cash and cash equivalents of $3.8 million; and
- As at March 31, 2013, Candax had loans and borrowings of $37.5 million with a current-portion of $4.2 million.
"Our first quarter was highlighted by the completion of our ongoing work program designed to boost Candax's overall production and reserves over the near-term," said Benoit Debray, Chairman and CEO of Candax. "We are encouraged by the production rates generated by the beam pump methodology of extraction. In our El Bibane field, we took delivery of a second compressor, which will help improve production and provide a back up to the current compressor. These initial steps are the start of our broader plan to solidify a base of cash-yielding assets that are able to fund future exploration programs."
Review of Key Operations
Candax has 100% ownership of El Bibane, 100% ownership of Robbana and 45% ownership of Ezzaouia, on which Candax has partnered with ETAP, the Tunisian state oil and gas company. El Bibane and Robbana are operated from Tunis by Ecumed, a 100% subsidiary of Candax. Ezzaouia is operated from Tunis by Maretap, a 50/50 joint venture between ETAP and Ecumed.
The encouraging results of the gas-cycling pilot program, which commenced in May 2012, continued to demonstrate positive production results. The success of this program has subsequently enabled the design and planning of the next phase, which will be executed in two steps. The first step will be to increase the gas recompression facilities at the El Bibane onshore Central Processing Facilities (CPF) in order to facilitate an increase of condensate production from the field. A second gas compressor was delivered and successfully installed in the first quarter of 2014. Production during the first quarter of 2014 averaged 223 bopd.
The second step will be to investigate, with the Company's Tunisian partners, the possibility of selling 5 to 10 mmscf/d of natural gas to local buyers. Management anticipates that ongoing gas sales could contribute to optimum overall resource recovery by partially liberating dissolved gas present in the remains of the oil rim.
During the first quarter, production from the Ezzaouia asset increased to 241 bopd (net) from 194 bopd during the same period last year. This was a result of the successful completion of the workover program.
Maretap also plans to continue to perform geological and geophysical (G&G) studies within the field, which could confirm significant potential for recoverable reserves. Candax views its involvement in Maretap as a strategic benefit intended to gain access to high quality resources and expertise in Tunisia.
On May 7th, John Younger gave notice of his resignation from his position as President of Candax Energy Inc. The notice period of eight weeks means that Mr. Younger's resignation will take effect at the end of June 2014.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS
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.
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.