Condor Energies Inc. (TSX: CDR): Swift drilling. Smooth operations. Promising early results
• The second horizontal well (A‑21) in Uzbekistan has now been drilled, delivering a 1,279 m open‑hole lateral, including 960 m within the carbonate reservoir exhibiting porosity above 6%. Reservoir quality exceeded pre‑drill expectations: cuttings from 223 mm of the lateral showed visible porosity of up to 12%, accompanied by strong gas shows. The well will now undergo acid stimulation (as planned)—using small‑diameter tubulars —before being tested. First production is expected in the second half of February.• An acid stimulation is also scheduled for the lateral section of the first horizontal well (A‑23), again using small‑diameter tubulars within the same timeframe. This is a constructive development, as Condor had previously anticipated that a larger‑diameter coiled‑tubing unit—still not mobilised to site—would be required.
• The K‑45 vertical well is approaching total depth, with testing expected to commence in February.
• We reiterate our target price of C$5.60 per share. With three wells potentially contributing by the end of February, production could increase meaningfully from the 11,462 boe/d reported in December. Notably, the company will have drilled and tested two new wells within a two‑month window—an appreciable improvement relative to the A‑23 timeline. This acceleration supports the feasibility of the 2026 plan to drill 12 new wells.
Divesting Turkey
Condor has agreed to divest its Turkish business in exchange for a gross overriding royalty ranging from 0% to 15% depending on production, capped at US$10.0 mm, along with a cash payment of €18,000 at closing. The transaction releases the company from its remaining workover commitments and the obligation to drill an additional well. It also frees up management capacity, allowing greater focus on advancing the Uzbekistan and Kazakhstan portfolios.
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.
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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