Candax Energy Inc.
TSX : CAX

Candax Energy Inc.

July 25, 2011 11:38 ET

Candax Provides Update on Block 1101 Madagascar

TORONTO, ONTARIO--(Marketwire - July 25, 2011) -

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 it has entered into a binding agreement to farm-down a major part of its working interest and operatorship of Block 1101 in Madagascar to Afren Plc ("Afren"). Candax will subsequently hold a 10% working interest in Block 1101 with Afren holding 90%. The commercial terms involve the repayment of certain back costs and include a share of future production royalties. Both the transfer of working interest and operatorship have been approved by the Government of Madagascar.

Consent has also been received to combine the first and second exploration periods of the Petroleum Sharing Contract for Block 1101. This will allow the partnership to acquire additional data prior to drilling. The work program is being extended to include a new airborne gravity/mag survey as well as an additional 150 kilometres of 2D seismic.

Richard Norris, President and CEO of Candax commented, "Although Block 1101 in Madagascar is a very exciting and world-class exploration block, its frontier nature and its sheer size does not fit with Candax's current focus on optimizing production from our Tunisian assets. Afren is extremely well positioned to assume operatorship of Block 1101, with an established track record of operating key projects elsewhere in Africa and significant in-house technical resources available to ensure that the acreage is fully explored. We would also like to recognize the extremely active and supportive participation of both OMNIS and MMH in Madagascar, who clearly share our view that, going-forward, an Afren led exploration program will provide the maximum opportunity for early exploration success on Block 1101."

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

This news 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 ability of Candax to continue to service its debt; 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 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 to fund the capital and operating expenses necessary to achieve the business objectives of Candax, 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. 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.

Contact Information

  • Candax Energy Inc.
    Charlotte May
    Corporate Secretary
    416 364 3353
    cmay@candax.com

    CHF Investor Relations
    Cathy Hume
    CEO
    416 868 1079 ext. 231
    cathy@chfir.com

    CHF Investor Relations
    Jeanny So
    Director of Operations
    416 868 1079 ext. 225
    jeanny@chfir.com