TORONTO, ONTARIO--(Marketwired - June 30, 2015) - Candax Energy Inc. ("Candax" or the "Company") (TSX:CAX), a company with mature oil & gas field developments in Tunisia, announces today that it has not been able to reach agreement with its partner to bring forward sales of its oil inventory stock from November to August 2015.
The cash balance of the Company as at end of June is circa $2 million.
The net Candax share of crude oil in inventory as at end of June 2015, amounts to 57 thousand barrels ("kbbls") (over 94 kbbs available in Maretap Tank storage) which represents an approximate value of $3.5 million at today's Brent prices, rising to 100 kbbls net Candax share (170 kbbs available in Maretap Tank storage) by end of September, with a forecasted average monthly net production of 13.5 kbbls (25 kbbls gross production including partners).
Based on current business assumptions, and assuming that oil sales revenues are delayed until December 2015, the company would likely experience a cash shortfall by the end of September 2015. However the Company forecasts a positive cash balance at the end of 2015, once oil sales proceeds have been received.
The Management, with the support of the Board of Directors, is studying cost reductions and rescheduling of its current liabilities. The Company is also actively working on options to increase working capital, including rescheduling debt and interest payments, pre-financing its crude oil inventory, advancing sales of crude oil, and the sale or lease back of assets.
The Company also announces that it has obtained from Geofinance NV, major debtholder and shareholder of the Company, a further extension of 21 days on the waiver granted on January 29, 2015 up to July 22, 2015 under a facility agreement. Geofinance NV has agreed not to seek any remedy under such facility agreement in respect of the $3.5 million unpaid amount until July 22, 2015, or earlier in specific circumstances. A copy of the amendment and waiver letter will be filed publicly by the Company and available on SEDAR.
The company has also decided to explore the option to voluntarily delist from the Toronto Stock Exchange ("TSX") to another exchange including the TSX Venture Exchange (TSX-V) and the Canadian Securities Exchange (CSE). Both such exchanges have lower listing requirements but it is not confirmed that the Company could meet the listing requirements on either exchange. Due to the expenditure requirements for a senior listing, the Board is considering whether or not it would be in the best interests of shareholders to transition to another exchange, thereby further reducing costs.