Candax Increases Proven + Probable Reserves Value by 130%
Candax Energy Inc. announces an update to its net reserves as of December 31, 2005 with total proved plus probable reserves (2P) of 15.7 MMboe. Proven reserves are 35% higher at 4.0 MMboe compared to the reserves presented in Candax's IPO Prospectus dated August 22, 2005. In addition, the net present value (NPV) of future cash flows (after tax and discounted at 10%) attributable to 2P reserves has increased 130% to $125.2 million from $54.5 million.
Independent engineering reserves reports were prepared by Ryder Scott Petroleum Consultants for all of Candax's properties in Tunisia with the exception of reserves attributable to the Chaal Permit, which were prepared by Glendower International Limited, and are consistent with the reporting presented in the Company's IPO Prospectus. Both of these reports have been prepared in accordance with NI51-101 guidelines. It should be noted that the Chaal reserves and valuations summarized below are based on an 80% working interest, which was the working interest prior to the farm-out to Mitsubishi Corporation which was completed after December 31, 2005.
Candax's reserve highlights for escalated prices and costs are as follows:
- Proved reserve increases are mainly due to the impending investment program and re-development of the El Bibane field offshore Tunisia, providing Candax with proved oil reserves of 2.4 MMbbl and 9.8 bcf of gas.
- Probable oil reserves are 29% higher at 3.1 MMbbl and probable gas reserves are approximately flat at 51.6 bcf. The increase in probable oil reserves is mainly attributable to the re-development of the El Bibane field.
- The Net Present Value (NPV) discounted at 10% for 2P reserves is $125.2 million, an increase of 130% over the $54.5 million valuation at the time of the IPO. The December 31, 2005 NPV under constant price and cost forecasts is $142.4 million.
- Candax will commence a pilot water-flood project on its onshore Ezzaouia field in April 2006 where, consistent with NI51-101 guidelines, no additional reserves have been added in the end-2005 audit. If the pilot project is successful, Candax anticipates that a full field water-flood project would be undertaken in 2007 and that significant reserve additions would be attributable at the end of 2006 following a successful pilot program.
as at December 31, 2005 (Escalated Prices and Costs)
|Reserves Category||Boe||Oil||Natural Gas|
|Total Proved - All Categories||7,744||3,988||5,064||2,361||16,083||9,765|
|Provable - All Categories||17,234||11,670||5,890||3,062||68,063||51,645|
|Total Proved Plus Probable||24,978||15,658||10,954||5,423||84,146||61,410|
as at December 31, 2005 (Escalated Prices and Costs) - C$ Millions
|Reserves Category||Before Income Tax Discounted at||After Income Tax Discounted at|
|Proved and Provable||222.5||172.4||135.6||108.2||87.2||207.3||159.9||125.2||99.4||79.9|
Candax's 2006 drilling program for the re-development of the El Bibane field is expected to result in 2006 net exit production of approximately 2,500 bopd and 4.5 MMcf/d. The Chaal 1 well which started drilling February 5, 2006 is currently at 3,182 meters in the Upper Nara Jurassic formation and 9 5/8 casing is being set. The well is targeted at the Lower Nara formation at 4,500 meters.
Candax Energy is an international energy company with its head office in Toronto, Ontario, Canada and management offices in London, Dubai and Tunis. The Company holds a number of concessions in Tunisia through its subsidiary companies and is involved in the exploration and production of oil, gas and power generation in the country. Candax was formed through the combination of a highly experienced executive management team with successful Canadian founders and financiers, to develop an international upstream oil and gas project portfolio. Candax is initially focusing its growth activities on production and development projects in the Middle East and North Africa, where the group has strong relationships and extensive management experience.