In November 2006 Candax signed a PSA with the Madagascar Government for the oil and gas rights of Block 1101 onshore in the north of the country and received Presidential Decree in 2007. Candax is partners with EAX, a wholly-owned subsidiary of Black Marlin Energy, now Afren plc, which is operator of Block 1101 and holds a 90% working interest.
The Block covers 14,900 square kilometres and is adjacent to of the Exxon operated, offshore, Ampasindava Block and the Ambilobe Block of Sterling where Exxon has farmed-in.
Block 1101 offers Candax a low cost entry into one of East Africa's most prolific oil provinces with billion barrel potential. To date in its onshore Tsimiroro and Bemolanga fields, Madagascar has reported 30 billion barrels of discovered tar sands/heavy oil (8° to 16° API). Lighter oils (22° and 45° API) have also been discovered onshore, and are the target of new exploration both onshore and offshore. Analogies of the large geological anticlinal features that have formed the multi-billion fields of Tsimiroro and Bemolanga are believed, from initial geological mapping available to the partners, to be present within Block 1101. As well as numerous identified oil seeps onshore within the Block, a recent satellite-based oil seep study has indicated the presence of numerous active seeps just offshore.
Results from geological field work, geochemistry and gravity / magnetics have confirmed the high potential of Block 1101. Over 9,000 metres of sedimentary section have been identified beneath the Block, together with numerous oil shows. In 2008, Candax, as operator at that time, undertook a 2D seismic acquisition program comprising 160 line kilometres in the Ambilobe area and a further 20 line kilometres in the Ankaramy area. An exploration well will be drilled in 2012, however prior to drilling the partners have agreed to acquire additional data and the work program has been extended to include a new airborne gravity / mag survey as well as an additional 150 line kilometres of 2D seismic.