Toronto, Ontario, Canada - Candax Energy Inc. ("Candax") [TSX: CAX] announces an update to the El Bibane oil field redevelopment project located offshore Tunisia.
During May 2006, Candax awarded two contracts for the onshore and offshore engineering work of the El Bibane redevelopment project. Both these contracts were signed with the lead contractor Pireco, a highly experienced Tunisian engineering company for such turn-key energy projects. The value of both contracts is approximately US$12.5 million. The scope of work includes: the fabrication of two new platforms with topsides for wells EBB3 and EBB5 and modifications for the EBB4 platform, the installation of a new high pressure separator and other upgrades to the onshore facilities necessary for higher oil and gas volumes, and the installation of an onshore compression unit and a new offshore pipeline for the gas re-cycling system. Procurement and fabrication work has commenced for these contracts.
Candax has been advised by the drilling contractor that the revised sail date of the offshore rig is estimated to be the second half of July 2006. Candax has its own engineering staff at the shipyard and its assessment is that the latest date from the contractor is achievable subject to no additional problems. With the rig mobilized in the second half of July, production start-up should take place in September.
Michael Wood, President & CEO commented, "The drilling program has always been on the critical path for the start-up of production at El Bibane. Since January 2006, a series of problems has beset the upgrade to the drilling barge unit that is currently in dry dock at a shipyard in the Adriatic. The underlying causes for the delay are numerous and include procurement problems and the re-fabrication of work that originally failed to comply with the required safety and quality certification standards. The international rig market has been extremely tight, and Candax has not been successful in finding a suitable and competitive alternative. Clearly, the start of oil and gas production from El Bibane is important to Candax and we have been making every effort to resolve these delays. Based on production start-up in September, it is estimated that the phased development program will be completed and full production will be achieved by December."
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.
For further information, please contact:
John Clarke, Executive Vice President, Corporate
T: (416)361-2824
F: (416)364-5400
E: jclarke@candax.com
Fred Cowans or Tracy Weslosky, Managing Partners
Pro-Edge Consultants Inc.
T: 866.544.9622 or 416.581.0177
E: info@pro-edge.com
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