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Message: Candax Reports 2008 Results
| March 30, 2009 |
| Candax Reports 2008 Results |
| TORONTO, ONTARIO--(Marketwire - March 30, 2009) - NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. Candax Energy Inc. (TSX:CAX) today announced its financial results for the year ended December 31, 2008. The financial results are presented in accordance with Canadian GAAP and the reporting currency is Canadian dollars. Revenues for the year increased to $35.5 million as compared to $14.7 million in 2007. This was primarily due to higher oil sales of 317,296 barrels (2007 - 170,470 barrels) derived from increased net oil production of 1,056 bopd (2007 - 465 bopd) (net working interest after deduction of royalty) and the higher average sales price achieved of $95.86 per barrel (2007 - $70.44 per barrel). Production increases over 2007 resulted primarily from the start-up of production from the offshore El-Bibane field in March 2008. The Company generated positive cash flow from its operating activities of $13.6 million in 2008 as compared to a cash outflow for 2007 of $2.9 million. Candax reported a net loss for 2008 of $13.1 million ($0.08 per common share) compared to a net loss of $9.3 million ($0.05 per common share) for 2007. The 2008 loss includes a charge for depletion, depreciation and amortization of $25.7 million (2007 - $6.4 million) resulting from a substantial increase in the unit-of-production rate for depletion, depreciation and amortization in 2008 (see note below). Capital additions in 2008 were $46.5 million, compared to $69.2 million in 2007. As at December 31, 2008, Candax held cash and cash equivalents of $8.9 million. The reserve based debt facility associated with the Company's oil and gas operations is within its covenants and the amount drawn down under its borrowing base facility was $57.1 million at December 31, 2008 of which $7.9 million is classified as current. Candax has filed its audited financial statements and accompanying notes for the financial year ended December 31, 2008 and related management's discussion and analysis with the Canadian securities regulatory authorities. Copies of these disclosure documents may be obtained under the profile of Candax at www.sedar.com. Year End Reserves Candax is also pleased to announce an update to its net reserves as of December 31, 2008, with total Proven plus Probable Reserves (2P) of oil 3.9 MMbbls (2007 - 4.1 MMbbls) and 5.5 MMboe. Proved Reserves of oil were 2.0 MMbbls (2007 - 2.1 MMbbls) and 2.9 MMboe. The net present value (NPV) of the future cash flows (escalated price forecast, after tax and discounted at 10%) attributable to these 2P reserves is valued at $165.5 million. An independent engineering report was prepared by Ryder Scott Company Petroleum Consultants for all of Candax's producing properties in Tunisia. The report was prepared in accordance with NI 51-101 guidelines and more details on the reserves and valuations can be found in the Annual Information Form which will be filed by March 31, 2008 on SEDAR. The Contingent Resources have not been updated from those reported in Company's AIF filed on SEDAR on April 8, 2008. Operations: Candax provided an operational update on March 3, 2009, which reported that a cost reduction program for both operations and G&A had been implemented, including a freeze on executive remuneration. All these measures have been implemented with the full concurrence of the board which continues to seek further cost savings. As summarized, the Company has relatively limited capital commitments which are focused on further enhancing oil production during the year. Candax is currently tendering for rigs prior to commencing a multi-well sidetrack and work-over program in the Ezzaouia field, the major portion of which will be conducted during second and third quarters of this year. Michael Wood, President & CEO commented: "Candax generated significant cash flow from operating activities in 2008 and our plan is to continue to ensure that we remain cash positive in 2009 whilst meeting all of our obligations. The Company has taken steps to address the weaker commodity price environment and expects that economic conditions will continue to be both volatile and challenging for the foreseeable future. The Company is also working to increase production volumes and realize operating efficiencies and will remain proactive in the current business environment as well as reviewing options to expand our investment program in 2009. We are also focusing on the delivery of shareholder value at a more strategic level." Note: Canadian GAAP requires that unit-of-production rates are calculated on the basis of proven reserves only such that the rate would decrease in future in the event that probable reserves are reclassified as proven. The year-end ceiling test based upon the value of the Company's proved reserves as assessed by independent reserve engineers did not indicate that the net capitalized costs of its petroleum and natural gas properties oils and gas of $161.7 million were impaired. Candax Energy Inc. is an international energy company with its head office in Toronto and offices in London, Tunis, 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. |
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