Chaal-1 Exploration Well Encounters Gas

Candax Energy says the Chaal-1 well, located onshore Tunisia, penetrated a hydrocarbon bearing section in the target reservoir, the Middle/Lower Nara, at a depth of 4,036 meters. To date, a gross reservoir interval of 304 meters has been drilled, with the well depth currently at 4,340 meters. There have been excellent gas shows throughout this 304 meter interval, including C5 (condensate) at numerous intervals since entering the reservoir. Drilling through the reservoir interval has been steady, with numerous gas kicks encountered. Candax has been gradually increasing the mud weight during drilling to maintain the pressure balance and to minimize potential formation damage prior to testing.

At a depth of 4,340 meters another significant gas kick was experienced, and the well again began flowing. At this point, it was decided to stop drilling and run an intermediate log suite. Schlumberger are on standby at the well site to begin logging once the well has been stabilized. Following the intermediate logging, it is anticipated that drilling will continue until the full hydrocarbon bearing section has been penetrated. Once total depth is reached, further logging will take place and then the well will be tested following log analysis.

Michael Wood, President & CEO commented, "The preliminary results from the Chaal-1 well are extremely encouraging and we are awaiting the results from the logging to establish the full hydrocarbon column and testing to establish the production capability of the reservoir of the large gas/condensate structure at Chaal. The Company will endeavour to provide further results as soon as these become available."

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.