Candax Energy Inc.

Candax Energy Inc.

September 01, 2005 09:15 ET

Candax Energy Inc.: Temporary Shut Down of El Bibane Field, Offshore Tunisia

TORONTO, ONTARIO--(CCNMatthews - Sept. 1, 2005) -

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

Candax Energy Inc. (TSX:CAX) announces that it has temporarily shut-in production from El Bibane 3, the sole producing well in the El Bibane Field, offshore Tunisia. During routine maintenance some unexpected corrosion of the El Bibane 3 wellhead was discovered. In the interests of safety and good environmental practice it was decided to shut-in the well. Prior to shut-in, the El Bibane well was producing approximately 530 bopd and 3.7 mmcf/d of sales gas net to Candax.

The corroded parts have been successfully replaced. It is planned to mobilize a work-over barge with the necessary equipment to enable the restart of production and it is expected that the work-over will be completed by mid September.

Candax management completed a strategic review of the El Bibane Field following its acquisition in April 2005. In order to fully develop the reserves, Candax plans to drill a further development well and install a permanent gas lift in the new and existing wells, which program is expected to be initiated in Q4/05.

Candax recently completed a successful work-over well at the previously shut-in Al Manzah field. The well flowed clean oil on a nitrogen lift. The Company is currently evaluating artificial lift options to bring the field on stream in the near future.

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 produces approximately 1,800 boe/d from its subsidiary operations in Tunisia. 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.

Certain statements in this News Release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements.

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