Candax Energy Inc.
TSX : CAX

Candax Energy Inc.

August 15, 2011 08:00 ET

Candax Reports Second Quarter 2011 Results

TORONTO, ONTARIO--(Marketwire - Aug. 15, 2011) -

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

Candax Energy Inc. ("Candax") [TSX:CAX] reports revenues of $2.6 million for the second quarter of 2011 compared to $nil for the same period in 2010. Although reduced general and administrative expenses and lower interest payments were reflected in the second quarter, Candax had negative cash flow from operating activities of $2.0 million, which amount was significantly lower than the negative cash flow of $6.4 million for the same period in 2010. The Company's cash flow before working capital changes was slightly positive. Candax recorded a loss of $1.9 million ($0.002 per common share) for the three months ended June 30, 2011, compared to a loss of $3.8 million ($0.01 per common share) for the same period in 2010.

Candax's net average production for the second quarter of 2011 was 276 bopd, compared to 154 bopd in the same period for 2010. The increase in production is attributable to the resumption of the production of the El Bibane field in September 2010 and to the workovers and sidetracks on the Ezzaouia field which have more than offset the natural decline of the field. Candax's current net production is approximately 320 bopd, with gross production from the El Bibane and Ezzaouia fields of 100 bopd and 800 bopd, respectively.

As at June 30, 2011, Candax had cash and cash equivalents of $4.1 million. Candax had US$4 million outstanding under its US$10 million shareholder loan with its majority shareholder, Geofinance N.V. Capital expenditures in the second quarter were $0.7 million. Candax's second quarter 2011 Interim Consolidated Financial Statements and Management's Discussion and Analysis may be viewed under the Candax profile at www.sedar.com.

Matthieu Milandri, CFO stated: "In the second quarter, Candax continued its efforts to reduce costs and complete the technical studies of its assets to design the optimal re-development strategy to increase production and return Candax to long-term profitability. The full field reservoir study of the El Bibane field is now complete and Candax is reviewing the conclusions and the necessary investments to be implemented. On the Ezzaouia field, the reinterpretation of the 3D seismic will be achieved before the end of the third quarter, which will provide a more precise picture of the drilling opportunities on that field. As detailed in a separate news release, production has resumed on the Robbana field and Candax is actively preparing the development plan, which will involve the drilling of several wells and the upgrade of the facilities to accommodate a waterflooding campaign. On Madagascar, Candax announced on July 25, 2011 that it had entered into a binding agreement with Afren plc, to farm-out 50% of Candax's 60% working interest in Block 1101 and for the transfer of operatorship. And finally, we are also very pleased that the renewed cooperation with the Tunisian authorities has resulted in the confirmation of a long maturity for the El Bibane licence. This will provide the necessary timeframe to recoup future investments on that field."

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