Candax Energy Inc.
TSX : CAX

Candax Energy Inc.

November 13, 2008 17:56 ET

Candax Reports Strong Third Quarter and Nine Months Results

TORONTO, ONTARIO--(Marketwire - Nov. 13, 2008) -

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Candax Energy Inc. (TSX:CAX) reports a third quarter net income of $1.6 million ($0.01 per common share) for the three months ended September 30, 2008, compared to net income of $2.2 million ($0.01 per common share) for the three months ended September 30, 2007. Net income for the nine months ended September 30, 2008 was $2.1 million ($0.01 per common share) compared to a loss of $3.2 million ($0.02 loss per common share) for the same period in 2007. Revenues for the third quarter were $13.9 million, a 40% increase over the same period in 2007; and $30.9 million for the nine months ended September 30, 2008, a 140% increase over the same period in 2007.

Candax's net average production for the third quarter was 1,576 boepd, compared to 502 boepd in the same period for 2007. Production was comprised of 1,126 bopd and 2.7 mmcf/d compared to 502 bopd and nil mmcf/d in 2007. The increase is primarily attributable to the resumption of production from El Bibane in 2008. Average net production for the nine months ended September 30, 2008, was 1,372 boepd compared to 478 boepd in 2007, comprising 864 bopd and 3.1 mmcf/d (478 bopd and nil mmcf/d in 2007).

Capital expenditures in the third quarter of 2008 included $2.3 for the drilling of the EZZ-17 and EZZ-18 wells onshore Tunisia and $0.8 million for the 2D seismic acquisition campaign in Madagascar. As at September 30, 2008, Candax had cash and cash equivalents of $13.9 million and had utilized US$44.5 million of its US$50.0 million credit facility. Candax's third quarter Interim Consolidated Financial Statements and Management's Discussion and Analysis may be viewed at www.sedar.com.

Mike Wood, President and CEO commented,

"Candax's strong third quarter results primarily reflect the production increases from the El Bibane development, with oil production and revenues at record levels. Despite the present challenging economic environment and lower oil prices, Candax should continue to generate strong cash flow. The Company has low operating costs, which averaged $14 per barrel for the third quarter, and only limited capital commitments for the remainder of 2008 and into 2009. These factors, combined with considerable discretion as to the timing of the drilling of its inventory of exploration, appraisal and development prospects, ensure that the Company can withstand the present market volatility whilst meeting its debt repayment obligations and preserving its cash. We consider that this approach will retain value for shareholders and also places Candax in a favorable position to take advantage of opportunities that may arise as a consequence of the present market conditions. We do not consider that our current share price reflects these business strengths as Candax enjoys a relatively robust position compared to many of our peer group in the oil sector."

Candax Energy Inc. is an international energy company with its head office in Toronto and offices in London, Tunis, Dubai and Madagascar. The Candax group is engaged in exploration and the production of oil and gas and power generation in Tunisia and holds an interest in an exploration permit in Madagascar. 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 asset portfolio.

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
    CHF Investor Relations
    Lindsay Carpenter
    Account Manager
    (416) 868-1079 x. 239
    Email: lindsay@chfir.com