Condor Petroleum, a Canadian based oil and gas company focused on exploration and production activities in Turkey and Kazakhstan, announce the release of its unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2020.

Q2 2020 Highlights

• On April 22, 2020, the Government of Kazakhstan signed the Shoba and Taskuduk production contract addendums and no further approvals are required in order to complete the sale of the two properties. The transaction is scheduled for closing as soon as practical once the current novel coronavirus (“COVID-19”) pandemic related restrictions on travel and office closures in Kazakhstan have been eased and the re-registration of the properties and equipment to the Buyer can be completed.  
• Discussions continue with the Government of Uzbekistan for the Company to secure an agreement to operate five producing gas fields and associated gathering pipelines and gas treatment infrastructure. However, progress has been hampered by COVID-19 travel restrictions.
• Two well workovers were performed in Turkey during the second quarter of 2020, increasing production to an average of 326 boepd for the past thirty days compared to an average of 107 boepd for the three months ended June 30, 2020.
• The Company is in discussions for farm-in partners to drill the Yakamoz prospect in Turkey and multiple prospects in the Zharkamys West 1 territory in Kazakhstan.
• The Company has taken a number of measures to protect the safety and health of its personnel, contractors and suppliers during the COVID-19 pandemic and is well positioned for the challenges of the current business environment, has a cash position of $16.1 million as of June 30, 2020, no debt, and positive netbacks from natural gas sales and no capital commitments in Turkey.
• Continuing operations in Turkey to date have not been materially affected by the COVID-19 pandemic although production decreased to an average of 107 boepd for the second quarter of 2020 from 293 boepd in 2019 due mainly to a combination of natural declines and forty two days of restricted production related to a refrigeration unit compressor failure at the processing facility. Corresponding sales decreased to $0.5 million for second quarter of 2020 from $1.3 million in 2019 and the net loss increased to $2.7 million for second quarter of 2020 from $1.4 million in 2019.

Shoba and Taskuduk Sale

In September 2019, the Company entered into a binding agreement to sell its 100% interests in the Shoba production contract, Taskuduk production contract and associated field equipment for total proceeds of USD 24.6 million (“Sale Agreement”). The buyer (“Buyer”) paid USD 3.8 million in October 2019, USD 18.7 million in January 2020 and USD 0.6 million in May 2020. The remaining USD 1.5 million is due at Closing and will be reduced by an estimated USD 0.7 million for the net revenues minus operating costs from the properties which attribute to the Buyer from the effective date of December 25, 2019 until the Closing date.

On April 22, 2020, the Government of Kazakhstan signed the Shoba and Taskuduk production contract addendums and no further approvals are required in order to complete the sale of the two properties. At the request and expense of the Buyer, production was immediately shut in and there will be no further production or sales until Closing has occurred. The transaction is scheduled for closing as soon as practical once the current COVID-19 related restrictions on travel and office closures in Kazakhstan have been eased and the re-registration of the properties and equipment to the Buyer can be completed and the parties are able to conduct the customary Closing and commercial handover procedures.

Production Contract Negotiations with the Government of Uzbekistan

Discussions continue with the Government of Uzbekistan for the Company to secure an agreement to operate five producing gas fields and associated gathering pipelines and gas treatment infrastructure. The Company has submitted and presented a detailed feasibility study and economic analysis for the five producing gas fields to the Government of Uzbekistan and an independent reserves volume evaluation has been completed. An environmental baseline study is currently being performed by an independent contractor. In parallel, the Company is also pursuing the possibility of acquiring exploration acreage in areas surrounding the respective gas fields. Material progress on these initiatives has been hampered by the recent COVID-19 travel and office closure restrictions.

If executed, the production contract is expected to include five producing gas fields of interest, associated gathering pipelines, and gas treatment infrastructure. The fiscal and operating terms expected to be defined in the production contract include royalty rates, cost recovery, allocation of profits, gas marketing and pricing, government participation, governance and steering committee structures, baseline production levels and reimbursement methodology.

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