Latest news release from Candax Energy...
Candax Provides Update on El Bibane Re-Development and
Appoints John Willis Chief Operating Officer
March 1, 2007 -- Toronto, Canada -- 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."
Making money in stocks is tough to do. Some stocks are great trading vehicles. But even trading stocks can become buy and holds as the company begins to really achieve the goals that management is seeking. Buyouts or producers reflect that success.
