Report
Stephane Foucaud

Condor Energies Inc. (TSX: CDR): Good quarter. Positive signals at high value LNG project for the mobility sector

• 3Q24 production was 10,010 boe/d; which is line with our expectations.
• Production has increased to 10,706 bo/ed in the last seven days following low cost work-over activities.
• With the expansion of the workover programme upon the arrival of the second work-over rig and the installation of additional in-field flowline water separation systems, we expect that this trend will continue. We forecast 10.8 mboe/d production in 4Q24 (that might be too conservative) increasing to ~13 mboe/d in 1Q25 and 15.5 mboe/d in 4Q25.
• Condor has been invited to present its Kazakhstan LNG project at the COP29 conference in Baku. The purpose of the project is to replace diesel with more environmentally friendly LNG as a fuel for the mobility sector (rail locomotives, marine and heavy trucks). We see this invitation by Kazakhstan as a positive signal. This highlights the commitment of the Kazakh government to the project. Condor has already been allocated sufficient feed gas to produce ~740 t/d of LNG. Our unrisked NAV for the first LNG plant alone is >US$4.30 per share.
• We re-iterate our target price of C$5.80/sh, in line with our ReNAV.

Financials
The operating netbacks in Uzbekistan are ~US$1/mcf (in line with our expectations). Condor held ~C$12.5 mm in cash at the end of September. This represents an increase of ~C$3 mm over 3Q24. Accounts receivable reached ~C$23 mm at the end of September but Condor has received cash payments since then and the receivables are now almost current.

Valuation
Our ReNAV is unchanged at ~C$5.70/sh. The key source of upside continues to be the Kazakh LNG project. Condor is expected to take FID on the first LNG plant at Alga in 1Q25. Our unrisked NAV for the first LNG plant at Alga is ~C$4.30 per share. The unrisked value of the second LNG plant at Kuryk adds ~C$4.20 per share. Overall, Condor believes there is the potential for 8 modular LNG plants in Kazakhstan.
Underlying
CONDOR ENERGIES INC

Provider
Auctus Advisors
Auctus Advisors

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. 

Analysts
Stephane Foucaud

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