Candax Energy Inc.
TSX : CAX

Candax Energy Inc.

March 01, 2007 07:48 ET

Candax Provides Update on El Bibane Re-Development and Appoints John Willis Chief Operating Officer

TORONTO, ONTARIO--(CCNMatthews - March 1, 2007) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Candax Energy Inc. ("Candax") (TSX:CAX) announces the termination of the Offshore Drilling Contract for the re-development of the El Bibane field. The decision follows a year of successive delays and missed deadlines despite repeated assurances to the contrary by the contractor and thus their failure to perform the operations contemplated by the contract. After serving the contractor with several Notices of Default, and in light of its continued inability to provide the necessary rig certifications, Candax is of the opinion that the drilling equipment is not in compliance with essential health, safety and environmental standards. As a result, formal notice to terminate the contract has been served upon the contractor. Candax has not incurred any expenditures with or made any payments to the contractor relating to the re-development drilling contract.

Candax is focused on obtaining an alternate drilling option. The water depth at El Bibane (6 to 8 metres) has always severely limited the number of jack-up rigs capable of undertaking the program. Candax is now negotiating with a number of contractors, but the market for suitable jack-up drill rigs remains tight, although significantly better than a year ago and the nearest term availability is unlikely to be before mid-year.

Total investment to date on the re-development project has been approximately US$14 million (on a net basis), which includes the project engineering for the onshore and offshore facilities upgrades and pipeline and platform installation contracts which are 50% completed and on budget. All outstanding work on these related contracts will be phased in and completed in time for immediate hook up to the wells at El Bibane as they are drilled and completed. Candax maintains a strong balance sheet with a current cash position of approximately C$50 million.

Michael Wood, President & CEO commented,

"The El Bibane re-development program remains Candax's number one priority and we will be moving this project ahead as soon as appropriate offshore equipment can be sourced and brought on-site. Our treasury position remains strong and funding for the program remains in place. While this continued delay is disappointing, technical, safety and environmental considerations must take priority."

In separate news, Candax is pleased to announce that John Willis has been appointed Chief Operating Officer effective February 1, 2007. Mr. Willis is a very experienced energy executive, and brings a strong operational track record to the team. John is a mechanical engineer with over 30 years of major project development and drilling experience with both international and independent oil and gas companies, including a number of senior positions with Conoco in the UK. Mr. Willis is currently a director of consulting firm TransMed International, and is Treasurer of the Libyan British Business Council.

Michael Wood, President & CEO also commented,

"I am pleased to welcome John Willis to Candax. As Chief Operating Officer, he brings considerable experience that will strengthen our management team and enhance our operational capabilities in the field. John's valuable contacts in the Middle East and North Africa will also benefit Candax going forward."

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 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 as well as 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)
    Email: jclarke@candax.com
    Website: www.candax.com
    or
    Pro-Edge Consultants Inc.
    Tracy Weslosky or Fred Cowans
    Managing Partners
    1-866-544-9622 or (416) 581-0177
    Email: info@pro-edge.com