Candax Experiencing Delays at El Bibane Redevelopment Project
Candax Energy says that throughout August and September 2006, the company experienced additional contractor delays to the mobilization of the jackup drilling barge to drill the three well redevelopment program at El Bibane. During the entire period, Candax engineering staff, assigned to the shipyard on the Adriatic, have been assessing deficiencies and monitoring the contractor's ability to meet revised timelines. Concurrently, alternate drilling solutions have been sought, but a suitable rig has not been secured due to the current tight rig market. In addition, Candax is evaluating engineering options that might provide the Company with an early production start-up, prior to implementation of the full redevelopment program.
The mobilization of support barges and vessels commenced in mid-September, and the main drilling barge unit is expected to be mobilized to Tunisia in the near future. The various units for the mobile offshore drilling unit (MODU) will be assembled at the Tunisian operations base, and additional components installed prior to receiving the final certification, this includes the top-drive for the rig and bases/feet for the jack-up legs. Candax does not expect the MODU to be at the first drilling location before November and drilling on EBB-4 should be completed by year end. Production start-up from EBB4 will commence shortly thereafter, with full field production anticipated by the end of first quarter 2007.
Michael Wood, President & CEO commented,
"Candax management shares the frustration over the continued delays on the El Bibane redevelopment program with our shareholders. As we have previously reported, the causes for the delays are numerous and, over the last two months, have forced us to reschedule. During this time Candax has not been idle, and has been actively searching the international rig market for suitable and competitive alternatives. We also continue to evaluate engineering options that may provide an earlier production start-up prior to completion of the redevelopment drilling program.
Additionally, Candax is reorganizing management to enhance overall operations competencies and broaden our business development efforts. As part of this reorganization, Keith Howells, President and General Manager, Tunisian Operations, is relocating to Dubai as Vice President, Business Development for Candax, where his past experience will provide additional depth to our business development initiatives. Further announcements regarding this reorganization will be forthcoming in due course. Clearly, the start of oil and gas production from El Bibane remains Candax's top priority and we are making every effort to resolve the remaining issues as soon as possible."