TORONTO, ONTARIO -- (Marketwired) -- 05/13/13 -- Candax Energy Inc. ("Candax" or the "Company") (TSX: CAX), a company focused on mature oil field development in Tunisia, today announced financial and operating results for the quarter ended March 31, 2013. The unaudited financial statements, notes and MD&A pertaining to the period are available on the System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.com and by visiting www.candax.com. All monetary figures reported herein are U.S. dollars unless otherwise stated.
Selected Operational & Financial Highlights
-- Production, net of royalties, for the quarter ended March 31, 2013 was 472 bopd compared to 241 bopd for the same period last year. The increase was a result of the implementation of a successful gas cycling production process on the El Bibane asset;-- Revenue for the quarter ended March 31, 2013 was $nil compared to $1.9 million for the same period last year. The decrease in revenue was due to the seasonal time interval between oil liftings, which resulted in no produced oil being transported to market during the first quarter.-- The Company reported a loss for the quarter ended March 31, 2013 of $1.9 million compared to a loss of $3.4 million for the same period last year. $0.5 million of the Q1 2013 loss was as a result of a deferred tax loss. The decreased loss was a result of lower well remediation costs than the prior year period.-- As at March 31, 2013, Candax held cash and cash equivalents of $4 million; and-- As at March 31, 2013, Candax had loans and borrowings of $31.5 million with a current-portion of loans and borrowings of 3.3 million.
"Our first quarter was characterized by our ongoing work program, which is highlighted by our plan to complete four workovers on our Ezzouia and Belli assets during the coming months," said Benoit Debray, Chairman and CEO of Candax. "These workovers will boost production and verify the asset's remaining reserves at Ezzouia, as a well as allow us to reopen the Belli field and test its Bou Dabbous formation. This activity represents the initial steps in our broader plan of solidifying a solid base of cash-yielding assets that are able to fund future exploration programs."
Review of Key Operations
During 2012, Candax consolidated its working interests for its main producing assets. As a result of these transactions, Candax now has 100% ownership of El Bibane, 100% ownership of Robbana and 45% ownership of Ezzaouia, on which Candax has partnered with ETAP, the Tunisian state oil and gas company. The streamlining of the Company's ownership interests allows Candax to develop its fields according to its own vision of their potential. El Bibane and Robbana are operated from Tunis by Ecumed, a 100% subsidiary of Candax. Ezzaouia is operated from Tunis by Maretap, a 50/50 joint venture between ETAP and Ecumed.
The encouraging results of the gas-cycling pilot program, which commenced in May 2012, increased production by 30% on a quarter over quarter basis. The success of this program has subsequently 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 last quarter of 2013 of more than 400 barrels of condensate per day. Current production beginning of 2013 is already above 250 bopd.
Following this, the second step will be to investigate, with the Company's Tunisian partners, the possibility of selling a maximum of 5 mmscf/d of natural gas to local buyers. Management anticipates that ongoing gas sales could contribute to optimum overall resource recovery by partially liberating dissolved gas present in the remains of the oil rim.
On a quarter over quarter basis, production from the Ezzaouia asset decreased by 24% to 194 bopd (net). This was a result of halted production from the EZZ-9, EZZ-17 and EZZ-1 wells. The Company is planning remedial workovers on these three wells and is anticipating them to resume production by the end of the third quarter. Production from the Ezzaouia field is expected to increase to approximately 375 bopd (net).
Over the course of the year, Maretap expects to bolster its workforce and expertise in order to consistently maintain total Ezzaouia field production within the range of 700 bopd and 1,000 bopd. Additionally, Maretap plans to 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.
After a 2012 review of Belli's historical performance that was conducted by Maretap (operator), ETAP and Ecumed, a workover was agreed upon for the BEL-1 well in order to reopen the field and test the Bou Dabbous formation. The well is currently accessing the water-bearing Abiod formation. A workover is scheduled to take place during the fourth quarter of 2013 and will allow the Company to test the Bou Dabbous formation with the intent of possibly recharging the reservoir. Assuming positive results, a 3-month extended production test will be performed prior to additional geoscience studies.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS
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.
Candax is an international energy company with offices in Toronto and Tunis. 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.
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