Candax Energy loses $7.5-million in Q3 2014Oddly throughout all of this - I can see some light at the end of this tunnel. However, mature assets come with serious risk..as demonstrated by the failure of their storage tank and the $6.5 Millions required to fix it. Said sadly pushes back drilling of Robanna 3 by a few months ( late Q3 or Q4 - 2015 in my opinion).
That said...they finaly wrote off El Bibane financially, seem to finaly getting their house and finance ( read: expense) under control.....so with luck this thing , God willing, could actualy turn around...say in late 2016 with a succesfull Rob 3 well.
But hey...this is Candax....hard press to hold my breath like most of the oldies here, I am sure.
Candax Energy Inc (C:CAX)
Shares Issued 1,067,929,509
Last Close 11/10/2014 $0.015
Wednesday November 12 2014 - News Release
Mr. Pierre-Henri Boutant reports
CANDAX ENERGY INC. ANNOUNCES THIRD QUARTER FINANCIAL & OPERATING RESULTS
Candax Energy Inc. has released financial and operating results for the quarter ended Sept. 30, 2014. The unaudited financial statements, notes and MD&A pertaining to the period are available on the System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.com and by visiting www.candax.com. All monetary figures reported herein are U.S. dollars unless otherwise stated.
Selected Operational & Financial Highlights
- -- Production, net of royalties, for the quarter ended September 30, 2014 was 528 bopd compared to 368 bopd for the same period last year. The increase was a result of the improved production due to a successful workover campaign in the Ezzaouia field ending with the restart of Ezzaouia-9 on June 29, 2014. In addition, the gas cycling program on the El Bibane asset continued to yield good results;
- -- Revenue for nine months period ended September 30, 2014 was $14.0 million compared to $8.3 million for the same period last year. Additional revenue explained by an anticipation of a second lifting after issues with the Terminal Oil storage tank.
- -- The Company reported a loss for the quarter ended September 30, 2014 of $7.5 million compared to a loss of $2.9 million for the same period last year. The difference relies on an impairment loss on El Bibane, amounting to $6.6 million corresponding to a total write-off of the recoverable value of the asset. The Company continues to improve its operating profit;
- -- As at September 30, 2014, Candax held cash and cash equivalents of $5.3 million; and
- -- As at September 30, 2014, Candax had loans and borrowings of $34 million with a current-portion of $6.3 million including $2.1 million of finance lease obligations over the new gas compressor;
- -- Following a leak detected on the main oil storage Tank at the Terminal, Maretap has rented a heated storage barge since September 15, 2014 in order to maintain the Ezzaouia Field production during the investigation of the root cause and the repair of the leak. The investigation has revealed that the tank bottom and the floating membrane are to be fully replaced. As at November 12, 2014, an estimated budget of $6.5 million ($2.9 million net Candax) has been approved to repair the tank bottom in accordance with the design methodology used in 1999, date of the last repair and to install a new complete internal floating cover.
"The financial loss of the third quarter of 2014 is disappointing but remains a non-cash event. The Company has stabilized its overall production and is able to generate positive cash-flow from its operations," said Pierre-Henri Boutant, CFO of Candax.
Review of Key Operations
Candax has 100% ownership of El Bibane, 100% ownership of Robbana and 45% ownership of Ezzaouia, on which Candax has partnered with ETAP, the Tunisian state oil and Gas Company. El Bibane and Robbana are operated from Tunis by Ecumed, a 100% subsidiary of Candax. Ezzaouia is operated from Tunis by Maretap, a 50/50 joint venture between ETAP and Ecumed.
Ezzaouia
During the third quarter, production from the Ezzaouia asset increased to 268 bopd (net) from 121 bopd (net) during the same period last year. This was a result of the successful completion of the workover program.
Maretap also plans to continue to perform geological and geophysical (G&G) studies within the field, which could confirm significant potential for recoverable reserves. Candax views its involvement in Maretap as a strategic benefit intended to gain access to high quality resources and expertise in Tunisia.
A project document, to be jointly submitted by ETAP and ECUMED before the end of the year, has been elaborated to justify the extension of the validity period of the EZZAOUIA concession beyond 2019.
Robbana
The G&G study has shown potential locations for future additional drilling. Work is ongoing to select one location and plan for a drilling operation in 2015. Drilling engineering study, including deviation and side-track scenarios, has been completed in order to be ready to start the procurement of the long-lead items.
The drilling operations, previously tentatively planned to start in the first half of 2015, are currently being re-scheduled following the leak of the oil storage tank at the Maretap terminal.
We seek Safe Harbor.