TORONTO, ONTARIO--(Marketwire - May 11, 2010) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Candax Energy Inc. ("Candax") (TSX:CAX) announces that the Company has entered into a Farm-Out Agreement (the "Agreement") on the Chaal Permit with SacOil Holdings Limited, an international upstream oil and gas company ("SacOil"), listed on the Johannesburg Stock Exchange ("JSE").

The Agreement provides for SacOil to earn a 55% interest in the Chaal permit by paying for 80% of the costs related to the drilling of a sidetrack to the previously drilled Chaal-1 well, up to a limit of US$6.4 million (corresponding to a gross estimated cost of the sidetrack of US$8 million). Candax, through its wholly owned subsidiary Falcan Chaal Petroleum Limited will retain operatorship and an 18.75% interest in the field and Candax partners SMIP (Societe de Maintenance d'Installations Petrolieres) and Mitsubishi Corporation will hold 6.25% and 20%, respectively. SacOil will also pay Candax US$3.6 million at the time a development plan for the field is approved by the Tunisian authorities, which is expected to occur after the sidetrack has demonstrated commercial quantities of natural gas.

A one-year extension of the Chaal permit is a condition precedent to the Agreement, which also remains subject to certain other conditions precedent, including, but not limited to, the acceptance of the Agreement by the Tunisian authorities, the Bank of Scotland (lender to Candax) and the shareholders of SacOil. Candax and its partners intend to initiate formal discussions with the Tunisian authorities very shortly on the possibility of an extension.

Richard Norris, CEO of Candax, stated: "We are pleased to enter into this Agreement with a financially strong partner, which if accepted, will allow us to move forward with the exciting Chaal project and commence designing the best possible solutions to ensure commercial gas flows from the Chaal-1 appraisal side track. Not only will this farm-out potentially allow for flow testing appraisal of the Chaal-1 discovery, but it will also limit the cash commitment of Candax at a time when our efforts are focused on restoring production at El Bibane, which remains key in generating positive cash flows again."

SacOil (formerly SA Mineral Resources Corporation Limited) was historically a diversified mineral resources company focused on the exploration and evaluation of diversified mineral resources deposits and the development of mineral resource based projects in Africa. SacOil was listed in 1994 on the venture capital sector of the JSE and has since been relisted under the oil and gas subsector of the JSE as its focus changed to being an integrated oil and gas entity refocused on acquiring oil and gas assets in Africa. SacOil has strong institutional backing and its current shareholders include Investec Bank Limited, Metropolitan Asset Managers and the South African Export Fund. SacOil's two major institutional shareholders, Investec Bank Limited (which has assets under management in excess of GBP 52 billion) and Metropolitan Asset Managers (which has assets under management in excess of US$13 billion) financially support SacOil's transactions.

Candax Energy Inc. is an international energy company with its head office in Toronto and offices in London, Tunis, and Madagascar. The Candax group is engaged in exploration and the production of oil and gas and power generation in Tunisia and holds an interest in an exploration permit in Madagascar.

This press release includes "forward looking statements", within the meaning of applicable securities legislation, which are based on the opinions and estimates of Management and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "budget", "plan", "continue", "estimate", "expect", "forecast", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar words suggesting future outcomes or statements regarding an outlook. Such risks and uncertainties include, but are not limited to, risks associated with the oil and gas industry (including operational risks in exploration development and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections in relation to production, costs and expenses; the uncertainty surrounding the ability of Candax Energy Inc. to obtain all permits, consents or authorizations required for its operations and activities; and health safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the ability of Candax Energy Inc. to fund the capital and operating expenses necessary to achieve the business objectives of Candax Energy Inc., the uncertainty associated with commercial negotiations and negotiating with foreign governments and risks associated with international business activities, as well as those risks described in public disclosure documents filed by Candax Energy Inc. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in securities of Candax Energy Inc. should not place undue reliance on these forward-looking statements. Statements in relation to "reserves" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described can be profitably produced in the future.

FOR FURTHER INFORMATION PLEASE CONTACT:
        Candax
        Charlotte May
        Corporate Secretary
        416 364 3353
        cmay@candax.com

        CHF Investor Relations
        Jeanny So
        Account Manager
        416 868 1079 ext. 225
        jeanny@chfir.com

Source: Candax Energy Inc.