Condor Energies Inc. (TSX: CDR): Equity financing to accelerate production growth and bolster the balance sheet
• Condor has completed a C$19.4 mm equity financing priced at C$1.90 per share. This represents a C$2 mm increase compared the latest announcement.• The proceeds of the raise will allow the company to bring to Uzbekistan a third service rig in 1Q25 and a drilling rig in 2Q25 (4Q25 previously). This will enable the company to grow production more quickly than previously expected. Condor will use the drilling rig to drill the first multi-lateral well in the country. This well could have a material impact on the development and the production profile.
• Production is now expected to reach 14-15 mboe/d in mid 2025 and 15.5-17 mboe/d by YE25. Current production is ~11 mboe/d. We have now added 1 mboe/d production in 1Q26 to our previous forecasts of ~15.5 mboe/d. Given the performance of the field, we have also assumed a longer production plateau until 2029. The required capex to maintain production at that level is ~US$8 mm per year.
• The increased cash position puts the company in a stronger position ahead of taking FID at the first modular LNG project in Kazakhstan, particularly as the company looks to negotiate financing terms with debt providers and a JV partner. Our unrisked NAV for the first LNG plant at Alga alone is ~US$3.80 per share. The unrisked NAV of the second plant at Kuryk is ~C$3.70 per share.
• Another important near term newsflow is the first independent reserves certification at YE24. Given the good results achieved during the work-over programme, the estimated resources could be high. We now assume >350 bcf recoverable resources based on the development programme.
• As we incorporate the recent equity financing, we have changed our target price to C$5.60 per share, in line with our new ReNAV.
Valuation
Our new ReNAV is C$5.60 per share with a Core NAV of C$1.58 per share. The key source of upside continues to be the Kazakh LNG project. We estimate that the first two modular LNG plants are worth ~C$7.50 per share. Overall, Condor believes there is the potential for eight modular LNG plants in Kazakhstan.
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.
Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors.
Auctus provides Corporate Broking, Equity Research and Investment Banking services.
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