Candax Energy Inc. says that rig and specialist drilling management service contracts have been signed for the implementation of its onshore Tunisian drilling program in 2008.

Ezzaouia Field (31.4% Working Interest)

The Tunisian national drilling company CTF6 rig is currently being mobilized from northwest Tunisia to the Ezzaouia field to commence a back to back, two well campaign to drill Ezzaouia wells 17 and 18. These infill development wells are targeted at increasing proved reserves and adding significant production. The wells can be tied into existing facilities and brought immediately into production upon successful completion. The Ezzaouia 17 well is due to spud by mid May and is targeting an un-drained, potentially significant fault block at the east end of the field. Ezzaouia 18 will be drilled in the west of the field to augment production in the most prolific fault block yet encountered in the field.

Negotiations are ongoing to procure a rig to undertake a work-over program on several wells in Ezzaouia, including the Ezzaouia 5 sidetrack, to further evaluate the potential for bypassed oil in the Cretaceous Zeebag formation. During 2007, the Ezzaouia partners sidetracked Ezzaouia 10, the only producing well from the Zeebag, and discovered significant levels of bypassed oil. Prior to the sidetrack, Ezzaouia 10 was producing about 200 bopd and following the sidetrack, the well initially produced over 2,000 bopd and is still producing at over 400 bopd. On the Deep Triassic prospect at Ezzaouia, negotiations with all the partners for drilling are ongoing, and Candax remains fully committed to reaching an agreement so that an exploration well can be spudded on this multi-Tcf prospect early in 2009.

Chaal (60% Working Interest)

Following completion of the program at Ezzaouia, the CTF6 rig will be redeployed to drill the high-angle sidetrack of the Chaal-1 gas discovery made in 2006. The well is expected to spud in late August or early September. A contract has been signed with Houston-based NewTech, drilling specialists with extensive experience in high-pressure/high-temperature operations. The objective of the Chaal sidetrack is to fully evaluate and test the commerciality of the gas discovery, and will likely include a large acid fracturing to optimize flow from the fractured reservoir, followed by a long term test. On demonstration of commercial flow rates, the well exposes Candax shareholders to a high-case unrisked Contingent Resource of 850 Bcf (Ryder-Scott 2007). A two year extension to the Chaal Exploration Permit has been agreed to, and administrative formalities with the Tunisian Government initiated, which require no additional work program commitments beyond the planned sidetrack.

Robbana (80% Working Interest)

Candax is also preparing a program and initiating rig negotiations to evaluate the significant 3 million barrel Contingent Resource reported (Ryder-Scott 2008) in the Robbana field through the potential implementation of water injection. The objective of the program will be to drill an appraisal/development well down-dip of the producing Robbana-1 well to assess the extent of the reservoir and effectiveness of augmenting recovery with water injection. Drilling is expected to commence in the second half of 2008. Candax also believes that further reserves are present to the west of Robbana-1, along a structural ridge which extends into the Robbana block from the recent Mezrane discovery, where oil was tested at the same stratigraphic level as in Robbana-1. This area will be the focus of a future exploration/appraisal drilling campaign.

Block 1101 Onshore Madagascar (60% Working Interest)

Following the results from the initial geological fieldwork, geochemistry and gravity/magnetics have confirmed the excellent potential of Block 1101, indicating in excess of 5,000 metres of sedimentary section beneath our block together with numerous oils shows. Candax is currently tendering the planned 2D seismic program, which is expected to commence in the third quarter of 2008. Following the encouraging results from initial exploration studies, planned seismic coverage has been increased to include additional areas of the Block. Subject to interpretation of the 2D seismic results and further field work planned for 2008, it is anticipated that the first exploration well will be drilled in 2009.

Michael Wood, President & CEO, commented, As the El Bibane project nears completion with the on-going tie-in of El Bibane 3 and production optimization of El Bibane 4, Candax is about to commence a significant onshore development and appraisal drilling program. Our objectives are to maximize our onshore oil production and to appraise the high impact potential of both the Chaal and Robbana projects. In the second half of 2008, the sidetrack of Chaal-1 will appraise the commercial viability of an 850 Bcf identified resource, and the downdip Robbana well will test the potential to add significant reserves through water injection. We are also making significant progress on our other high impact exploration projects in Tunisia, Madagascar and elsewhere. The Candax team is excited about results to date, and remains focused to maintain the momentum established so far this year to ensure further increases in net oil production are brought on-stream and to use the drill-bit to access some of the world class potential in our exploration/appraisal portfolio.

Tags: Candax Energy Inc.