Candex Energy

Candax Energy* (CAX : TSX : $0.76)Net Change: -0.22, % Change: -22.45%, Volume: 4,213,120Sitting shoulder-to-shoulder with Domi, McSorley and Probert. Candax released its long-awaited results from its onshore well at Chaal in Tunisia. The company was unable to determine reliable flow rates due primarily to wellbore damage caused by drilling fluids necessary to control the well during drilling. Initial indications from Chaal-1 were encouraging, with a gross hydrocarbon section of 450 metres and a net reservoir estimated at 90 metres. Gas and condensate were present during drilling. Prior to drilling, the Chaal prospect had been assigned probable reserves of 60 Bcf with the potential upside to 190 Bcf to 844 Bcf. While the drilling and testing difficulties are disappointing, the company and its partner, Mitsubishi, have not abandoned the play. Candax will attempt to use a coiled tubing unit to implement further testing on the well, including acidization. It is not known at this time the extent of penetration of drilling fluids into the wellbore and whether a reliable test can be achieved. However, Candax and its partner are sufficiently encouraged at this point to state that they will develop a programme for further appraisal drilling and development. Candax has a cash position of approximately $70 million or $0.41 per share and a net cash position (cash less long-term debt) of approximately $48 million or $0.28 per share.