Condor announces 2015 third quarter results
CALGARY, November 12, 2015 – Condor Petroleum Inc. (“Condor” or the “Company”) (TSX: CPI) is pleased to announce the release of its Unaudited Interim Consolidated Financial Statements for the three and nine months ended September 30, 2015, together with the related Management’s Discussion and Analysis. These documents will be made available under Condor’s profile on SEDAR at www.sedar.com and on the Condor website at www.condorpetroleum.com. All financial amounts in this news release are presented in Canadian dollars, unless otherwise stated.
Q3 2015 Highlights
- The KN-501 Primary Basin well located on the Company’s 100% owned Zharkamys West 1 Territory in Kazakhstan was drilled to 3,992 meters and encountered numerous gas shows while drilling the overpressured main hole section. However, subsequent to the end of the third quarter, it was determined that no commercial hydrocarbon reservoirs had been identified and the well was abandoned. It appears that the target zones were fully encapsulated in salt before younger, coarser-grained sediments were deposited. This resulted in a lack of reservoir quality rock similar to what was encountered in the Company’s play opening KN-E Primary Basin discovery. The total cost of drilling KN-501 was $7.7 million.
- Using KN-501 data, the Company’s high resolution 3D seismic has been calibrated to the geological age of Primary Basin sediments. This is extremely beneficial in helping to identify potential reservoir quality rock in the extensive Primary Basin inventory. KN-501 has also confirmed that hydrocarbon source, migration, trap and seal are present in this region and that the Company’s geologic model is able to accurately predict sedimentary packages within salt. The Company is currently prioritizing the Primary Basin inventory with the newly calibrated 3D seismic data and applying the KN-501 and KN-E seismic interpretation learnings to mature drill-ready targets for 2016. Prospects with favorable attributes, including 4-way closure, top seal, touchdown directly on source rock, and potential for coarser grained reservoirs are being identified. Based on KN-501, the targeted drilling costs range from $7 to $9 million for well depths of 4,000 to 4,800 meters.
- The recent Primary Basin geological and operations learnings are also being applied to the Company’s Pre-Salt prospect inventory. The geologic model validation from KN-501 now provides a high degree of confidence in predicting structures within the Pre-Salt. The seismic responses within the Primary Basin also confirm the ability to seismically predict the Pre-Salt geology, which is key to further developing this play type. Pre-Salt well cost estimates of $21 to $25 million for a 6,500 meter well are considerably less than prior estimates given the knowledge gained while drilling KN-501’s massive salt section and highly over-pressured formations. The Company is discussing Pre-Salt farm-down alternatives.
- There was no production in the three months ended September 30, 2015 as Shoba operations were suspended on March 15, 2015 due to constraints in local refining capacity and low prices for
domestic crude oil and refined crude oil products. Production is expected to resume in the first quarter of 2016 once Shoba and Taskuduk commercial production contracts are executed and
export sales are permitted.
- Working capital (defined as current assets minus current liabilities) as of September 30, 2015 was $49.3 million and the Company has no debt.