Two prospects were identified by the former studies of the Middle Triassic (Ras Hamia sandstones) in the Ezzaouia and El Bibane concessions. The unrisked prospective gas resources have been evaluated by Ryder Scott in 2007 at 1,806 BCF and 1,417 BCF respectively (medium case).
In 2012, Candax launched a study to revisit the mapping and potential of the Triassic Ras Hamia Reservoir. Candax has come to the conclusion that this play, given the range of uncertainties embedded in currently available data, lacks sufficient evidence to warrant drilling a test well. Further work will be completed in 2013 in order to obtain and integrate additional available geological data, especially regarding source rock and reservoir facies evolution.
Block 1101 is an onshore exploration permit located in northwest Madagascar, covering 14,900 km2.
On July 25, 2011, Candax entered into a binding agreement with its partner on the permit, East African Exploration (EAX), a wholly owned subsidiary of Afren plc, whereby EAX would subsequently assume ownership of 90% of the permit, with Candax retaining a 10% interest (down from 60%). EAX agreed to pay $500,000 to Candax in consideration of the transferred interests. EAX has also assumed operatorship of the permit. Both the transfer of working interest and operatorship have been approved by the Government of Madagascar.
Candax is also entitled to receive a fourteen percent (14%) share of all net EAX production proceeds, up to a cumulative total of $3,550,000 USD as well as a 0.33% share of all net EAX production proceeds up to a cumulative total of $15 million USD.
From mid-September to mid-December 2012, EAX acquired 251 kilometres of 2D seismic (accelerated weight drop) on Block 1101. Data processing is currently ongoing.
The drilling of an exploration well in 2013 has been confirmed by the operator.
Candax is a re-birth story with an approach focused on the reactivation of mature fields. The skill set of the Candax executive team is derived from an oil services background and mentality. The team is supported by a Board of Directors with significant industry experience and by active principal shareholders (Geofinance, IFC and Actis). With the data gathered on El Bibane and Ezzaouia during 2012, Candax believes it has self-sustaining producing assets that will move the company forward.
The encouraging results of the gas-cycling pilot program enabled the design and planning of the next phase, which will be executed in two steps. The first step will be to increase the gas recompression facilities at the El Bibane onshore Central Processing Facilities (CPF) in order to facilitate the near doubling of condensate production from the field. The Company expects a production rate for the second half of 2013 above 400 barrels of condensate per day. Current production during 2013 is already above 250 bopd. The second step will be to investigate, with Candax's Tunisian partners, the possibility of selling 5 to 10 mmscf/d of natural gas to local buyers. The Company anticipates that ongoing gas sales will contribute to optimum overall resource recovery by partially liberating dissolved gas present in the remains of the oil rim.
After significant effort in 2012, the Ezzaouia field oil production rate doubled from approximately 400 bopd to 800 bopd. Maretap expects to bolster its workforce and expertise over the near term in order to consistently maintain field production within the range of 700 bopd and 1,000 bopd. Additionally, Maretap will continue to perform G&G studies within the field, which have already confirmed significant potential for recoverable reserves. Candax views its involvement in Maretap as a strategic benefit intended to leverage the partnership with ETAP, so as to gain access to high quality resources and expertise in Tunisia.
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