Condor Energies, a Canadian based energy transition company with activities in Turkiye and Kazakhstan has announced the release of its unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2023. 

Highlights 

• The Company is seeking final approval of the contracts for a production redevelopment project to assume full operations of eight existing gas-condensate fields in Uzbekistan.
• In July 2023, Condor was awarded a 100% working interest in a contiguous 37,300-hectare lithium brine mining license in Kazakhstan for a six-year term.
• In Kazakhstan, the Company continues to mature opportunities to implement proven modular LNG technologies and processes to displace diesel fuel usage in the industrial, transportation and power generation sectors.
• The Company completed a USD 5.9 million (CAD 7.8 million) three-year term loan facility in July 2023 that bears interest at 9% per annum and is available for working capital requirements and general corporate purposes.

Uzbekistan Production Contract and LNG Strategy

The Company is seeking final approval of the contracts for a production redevelopment project to assume full operations of eight existing gas-condensate fields in Uzbekistan, along with two additional exploration blocks in the surrounding area. The Company’s intent is to generate near term cashflow by increasing production from existing gas fields while decreasing greenhouse gas emissions by utilizing modern production technologies and techniques. Included with the eight producing gas fields are the associated gathering pipelines, and gas treatment infrastructure.

In addition, the Company has presented a proposal to the Government of Uzbekistan to use a portion of the increased gas production for LNG feedstock and provide the resulting LNG to mining operators and other users to displace diesel fuel usage. The Company’s LNG strategy in Uzbekistan would create a vertically integrated business with self-sufficient gas supply to replace expensive diesel with cleaner and cheaper LNG, decrease the mine’s operating costs, reduce the country’s dependency on diesel imports, and positively impact the country’s carbon reduction efforts by reducing overall carbon emissions.

Lithium Licenses in Kazakhstan

In July 2023, the Government of Kazakhstan awarded Condor its first lithium brine mining license (the “First Lithium License”). The Company holds a 100% working interest in the First Lithium License which is a contiguous 37,300-hectares and provides the subsurface exploration rights for solid minerals for a six-year term. Given its strategic access to Asian and European lithium markets, this region is ideally suited for the rapid deployment of emerging North American and European lithium DLE technologies to generate material lithium volumes for EV batteries and other electricity storage applications.

A prior well drilled in the First Lithium License for hydrocarbon exploration encountered and tested brine deposits with lithium concentrations of 67 milligrams per litre in Carboniferous-aged intervals as reported by the Ministry of Geology of the Republic of Kazakhstan. A 670-meter column of tested and untested brine reservoir has been identified from historical wireline log and core data. This well also penetrated the very top of the Devonian-aged sediments and reservoir sands were encountered but not tested.

Since the First Lithium License is not associated with legacy oil wells nor any reported presence of hydrogen sulphide, a less complex and less capital intensive modular DLE technology is envisioned for the separation of lithium from the brine when compared with lithium extraction projects targeting oilfield brines. By applying proven DLE production technologies, the Company expects to have a much smaller environmental footprint than existing lithium production operations which use open-pit mining or brine evaporation ponds. The Company is also evaluating the construction of a renewable power generation project to achieve net-zero emissions for its lithium production.

The Company’s initial development plan over the next twelve months includes drilling and testing two wells to verify deliverability rates, confirm the lateral extension and concentrations of lithium in the tested and untested intervals, conduct preliminary engineering for the production facilities, and prepare a mineral resources or mineral reserves report compliant with National Instrument 43-101 Standards of Disclosure for Mineral Projects (the “Mineral Report”).

As disclosed in previous reporting periods, the Company is also pursuing approval for a second lithium brine mining license.

LNG Initiatives in Kazakhstan

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. The LNG industrial uses the Company is proposing are proven worldwide, and the Company’s intent is to introduce them to a region where they are currently not deployed. The site location has been finalized, the land package has been secured and the front-end engineering has been completed for the Company’s planned first modular LNG facility.

New 9% Loan Facility Completed

On July 14, 2023, the Company completed its USD 5.9 million (CAD 7.8 million) three-year term loan facility (“Loan Facility”) that bears interest at 9% per annum. The Loan Facility is unsecured, non-revolving, requires quarterly interest payments and is available for working capital requirements and general corporate purposes, including the advancement of the Kazakhstan lithium brine and Uzbekistan gas field redevelopment initiatives. Implementing this financing strategy also successfully minimized shareholder dilution, which has always been one of the Company’s core values.

Turkiye Operations

Gas production for the third quarter of 2023 decreased 91% to 6,021 Mcf or an average of 65 Mcf/d from 67,494 Mcf or an average of 734 Mcf/d for the third quarter of 2022. The Poyraz Ridge field has been producing for six years with water production and natural pressure declines impeding gas production rates. Gas production during the third quarter of 2022 was also much higher due to the successfully drilled Poyraz 7 infill well that began producing in June 2022 and has since naturally declined.

Posted Turkish gas prices for the third quarter of 2023 averaged $13.55 per Mcf as compared to $26.75 per Mcf in the third quarter of 2022, in Canadian dollar terms, but increased to $16.04 per Mcf as of November 1, 2023.

The Company is seeking a partner to fund development activities at the Yakamoz field, which is located 2 km north of the existing Poyraz Ridge field and within the Poyraz Ridge operating license. The Company was encouraged with the results from the previously drilled Yak 1-ST, as it encountered numerous strong gas shows while confirming reservoir-quality formations and an active hydrocarbon system and, despite being temporarily suspended, casing pressure has built up at the surface, indicating a gas presence. Development of the Yakamoz field would consist of re-entering, casing and fully evaluating the Yak 1-ST well, drilling the Yak-2 well and additional production wells as required. If successful, the Yakamoz field would be tied by pipeline into the Poyraz Ridge production and sales facilities.

KeyFacts Energy: Condor Petroleum Turkey country profile   l   Kazakhstan country profile