Condor Energies, a Canadian based energy company with activities in Turkiye and Kazakhstan,  announces the release of its unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2022 together with the related management’s discussion and analysis.

Highlights

• The Company successfully drilled and began producing the Poyraz-7 infill well in June and completed a Poyraz-2 workover in July.  Gas production from Turkiye has averaged 1.0 MMscf/day during the third quarter of 2022 to date.  
• The infill drilling and workover programs allow the Company to benefit from strong Turkish gas prices which have increased 95% year-to-date to $22.83 (CAD) per Mscf as of August 1, 2022.
• In June 2022 the Company’s President and CEO met with His Excellency the President of the Republic of Kazakhstan to review and discuss Condor’s plans to construct and operate modular LNG facilities in Kazakhstan. Discussions are ongoing to reach agreement on feed-gas and LNG end-user delivered volumes, plant locations and fiscal terms.
• Condor continues to actively pursue an agreement to operate multiple producing gas fields in Uzbekistan and has held numerous meetings during 2022 with various government ministries to discuss the proposed project.

Turkiye Operations

The Company successfully drilled and completed the Poyraz-7 infill well and gas production commenced in mid-June. Based on wireline logging data, the well intersected 45 meters of net gas pay in multiple sand packages. In June, 14 meters of net gas pay were perforated and in July an additional 21 meters of net gas pay were perforated and Poyraz-7 has averaged 0.88 MMscf/day over the past 30 days. A further 10 meters of net gas pay remains available to be perforated and can be added as production naturally declines. An additional Poyraz infill well location has been matured and will be inventoried for a future date.

As part of the 2022 workover program, 8 meters of perforations were added to the previously shut-in Poyraz-2 well in July 2022. Since re-commencing production on August 1, 2022, Poyraz-2 has averaged 0.09 MMscf/day over the past 11 days. Another workover program has also been matured. These infill drilling and workover programs allow the Company to benefit from strong Turkish gas prices which are posted in Turkish Lira and converted in CAD at prevailing exchange rates which have continued their strong escalation and have increased 95% year-to-date to $22.83 CAD per Mscf as of August 1, 2022.

Gas production decreased 32% to 4,842 boe for an average of 53 boepd for the second quarter of 2022 compared to 7,173 boe for an average of 79 boepd for the second quarter of 2021. The decrease was mainly due to natural reservoir declines and a field unit compressor failure during 2022 at the Destan field. However, production rates have increased in the third quarter of 2022 due to production from the newly drilled Poyraz-7 well which commenced production on June 16, 2022 and the Poyraz-2 workover which commenced production on August 1, 2022 and overall gas production has averaged 1.0 MMscf/day during the third quarter of 2022 to date. The Company also produced 69 barrels of condensate in the second quarter of 2022, compared to 30 barrels in the second quarter of 2021.

LNG Initiatives

The Company continues to mature opportunities to implement proven North American modular LNG technologies and processes in Central Asia to displace diesel fuel usage in the industrial, transportation and power generation sectors. In June 2022, the Company’s President and CEO met with His Excellency the President of the Republic of Kazakhstan, the Deputy Prime Minister of Kazakhstan and the Chairman of QazaqGaz, Kazakhstan’s National gas supply company to review and discuss Condor’s plans to construct and operate modular LNG facilities in Kazakhstan.

Discussions are ongoing to reach agreements on feed-gas and LNG end-user offtake volumes, plant locations and fiscal terms.  Front-end engineering and design work has been completed for the Phase 1A LNG facility, which will produce 125,000 gallons per day, primarily to meet the needs of heavy-duty haul trucks working in the mining sector. Detailed engineering is expected to commence shortly.

Uzbekistan Production Contract

Natural gas production in Uzbekistan continues to decline due to inadequate capital investment and limited new technology applications into the sector. As internal demand continues to escalate, the government has announced its intention to cease natural gas exports by 2025 to address the country’s domestic needs and foster the production of value-added products. The country’s large producing gas fields may realize reduced margins, in-line with having to supply gas at subsidized domestic prices.

Hence the Company has adjusted its focus to revitalizing and operating mid-sized existing gas fields with the intent of incremental gas production being used for LNG feedstock. Providing LNG to mining operations to displace diesel usage, as is planned in Kazakhstan, should yield stronger returns, especially given the high diesel prices that currently prevail in the Uzbekistan market. The Company’s LNG initiative should also result in decreased operating costs for the mines, less dependence by the country for diesel imports, and positively impact the country’s carbon reduction efforts.

The Company’s redefined corporate strategy has excellent synergies that could create a vertically integrated business with self-sufficient gas supply and have modified government negotiations accordingly. If executed, the gas production contract could include producing gas fields, associated gathering pipelines and gas treatment infrastructure. The fiscal and operating terms would be defined in the definitive contract and include royalty rates, cost deductibility, gas marketing and pricing, government participation, governance and steering committee structures, baseline production levels and reimbursement methodology.

Corporate Name Change

On June 23, 2022, the Company announced the corporate name change to “Condor Energies Inc.” (formerly “Condor Petroleum Inc.”). The addition of “Energies” to the Company's name represents the Company’s transition away from oil exploration and development to the current focus on natural gas and gas transition fuels such as Liquified Natural Gas, to support decarbonization and overall green-house gas emission reductions.