Condor Energies Inc. (TSX: CDR): Positive response from first workovers
• The initial result of the workover programme in Uzbekistan has delivered results exceeding the company’s expectations.• Seven made-in-Canada artificial lift systems (plunger lifts) have been installed in existing wells. The first three wells have been put on production at a much higher flow rates (+100-300%) than prior to the workovers. These three wells have added a cumulative 330 boe/d of incremental production.
• The four other wells are currently being reactivated and expected to be producing shortly.
• A second workover rig will begin activities by early November to accelerate production ramp-up. There are >100 wells on Condor’s fields. The company will also perforate by-passed and new gas intervals.
• A made-in-Canada in-line flow separation system to separate water at the field gathering station is being installed. This is expected to reduce pressure losses in the pipeline and allow for lower well head flowing pressure; which, in turn, is expected to lead to higher flow rates.
• 3Q24 production was ~10 mboe/d. We forecast 10.8 mboe/d in 4Q24 increasing to ~13 mboe/d in 1Q25 and 15.5 mboe/d in 4Q25.
• We re-iterate our target price of C$5.80/sh, in line with our ReNAV.
Valuation
The share price currently discounts a EV/DACF 2025 multiple of ~3.3x. Our ReNAV is ~C$5.70/sh. The key source of upside is the Kazakh LNG project. Our unrisked NAV for the first LNG plant at Alga is ~C$4.30 per share. The unrisked value of Kuryk would add ~C$4.20 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.
Auctus provides Corporate Broking, Equity Research and Investment Banking services.
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