Condor Energies Inc. (TSX: CDR): Further production increase in Uzbekistan
• Production in Uzbekistan in December to date has averaged 11,354 boe/d. Adjusting for one day of shutdown implies a production capacity of almost 12 mboe/d.• The average production in December to date (11,354 boe/d) represents an increase of over 600 boe/d compared to the latest announcement (10,706 boe/d from 5 November to 11 November) and 1,344 boe/d compared to the 3Q24 average production.
• This production increase has been achieved through simple and low-cost workover operations and the addition of surface equipment, highlighting the potential upside of Condor’s assets.
• We believe that production growth is set to accelerate as a third workover rig and a second wireline unit will be imported in early 2025.
• The second in-field flowline water separator is expected to be installed later this month, with three additional units expected to be added in 1Q25.
• Before YE24, there are two areas of significant potential production addition: (1) A thick non depleted Jurassic-aged pay zone that had been bypassed is being perforated. (2) Shallower Cretaceous-aged stacked channel sands not previously penetrated on Condor’s fields have been perforated with gas indications observed at surface. these will now be tested.
• A multi-well vertical and horizontal drilling campaign is expected to commence in 2Q25.
• Condor is on track to grow production to 14-15 mboe/d by mid 2025 and 15.5-17 mboe/d by YE25.
• We re-iterate our target price of C$5.60 per share, in line with our ReNAV. We view the current share price weakness as an opportunity.
Valuation
Our ReNAV is unchanged at 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.
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.
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