Candax Energy Inc CXEYF

Moving forward again

[OceanRanger1]

Nice to see some action again. Now that the El Bibane workover has been contracted out it's just a matter of months before we see a resumption of production. It could be painful because it wasn't even scheduled to start until mid-year and will likely take 1 or 2 months to complete so August-September before we see a production re-start from El Bibane. Ouch. 

The shareprice doesn't go down unless someone sells into the weakness. Those who can't stomache the ride will bail out and cause further weakness. This company is worth more than 10c per share but it's just gonna take a little longer to prove it and restore confidence.
 
Chaal is by far Candax's best prospect to deliver results in the short term but I am disappointed they had to give away so much of it. They just chipped away some of our asset value which chips away at my target price as well. At least we are still the operators which also surprises me. Usually when a farm-in company puts up the bulk of the cost they insist on operating the project for obvious reasons so what that tells me is that our new team is highly respected by our new partner. Just that fact should be a boost to shareholder confidence.

Now we still have a degree of risk with the Tunisian government. We need a 1 year extension or the farm-in agreement is dead. Not sure what would be in it for the government to refuse the extension. They stand to benefit from a new royalty stream so hopefully they will embrace an extension and move quickly to approve it. I am nervous to make too many predictions now because I am getting shot at by those with weak stomaches but I think we see a significant pop when the Tunisian government approves the extension on Chaal. 

Work-overs are in progress at the Ezzaouia field so we should get updates on that relatively soon and positive results there would give the shareprice a little boost. 

These guys are almost ready to take on a new project so I would expect we see news within a few months on something new. Just a guess but I think it is highly likely we get a glimpse of where we are heading for the longer term before the fall.

Remain seated and keep your seat belts buckled would be my advice. That's what I am doing but anyone with a weak stomache better bail out. Small caps are extremely volitile so only those with large kahunas will prevail here. 

Just for clarification, from the 2008 Annual report, the best case estimate for Chaal was .854 bcf and the low estimate was .75 bcf  gas.
 

Run baby run!



OceanRanger