Condor Energies Inc. (TSX: CDR): Strong well test results point to meaningful reserves upgrade
• The K‑45 vertical well encountered 19.9 metres of net carbonate reservoir across four distinct intervals. Reservoir quality in the primary pay zone exceeded pre‑drill expectations, delivering an average porosity of 16%, with localized streaks surpassing 20%.• Three horizons were perforated and tested, yielding a flow rate of 5.3 mmcf/d and a condensate ratio of 5.6 bbl/mmcf. Initial reservoir pressure is estimated at 2,896 psi, indicating conditions close to virgin pressure.
• K‑45 is situated on the western side of the Kumli Northwest field, an under‑developed structure with only one downdip well currently on production. Condor previously perforated an 8‑metre carbonate interval in that producing well, which has averaged 5.5 mmcf/d over the past ten months. The near‑virgin pressure encountered at K‑45 suggests significantly greater remaining potential in the structure, with the resource upside now likely larger than previously anticipated.
• Although no official resource estimate has yet been disclosed for Kumli Northwest, these results highlight the material upside potential within Condor’s portfolio. We currently assume a ~250 bcf potential reserves upside across the company’s assets.
• K‑45 is expected to be brought online later this month. Four additional horizontal wells are planned from the same pad: the first two will target the primary reservoir intersected by K‑45, while the remaining two will target a deeper interval.
• Horizontal wells typically produce 2–4 times the rate of a vertical well, implying 10–20 mmcf/d per well.
• Pending further clarity on the additional reserves at Kumli Northwest, we reiterate our target price of C$5.60 per share. Gross production could reach 18–20 mboe/d by year‑end 2026.
Andakli
The A-21 is expected to be brought onto production later this month. In addition, the lateral section of the A-23 will be acid-stimulated, tested, and brought online in March.
Valuation
Our ReNAV for Condor is C$5.55 per share. The total unrisked value of Condor’s broader LNG portfolio is ~C$6.80 per share.
Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector.
The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy.
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