Condor announces 2015 year end results
CALGARY, March 16, 2016 – Condor Petroleum Inc. (“Condor” or the “Company”) (TSX: CPI) is pleased to announce the release of its Consolidated Financial Statements for the year ended December 31, 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.
- On January 7, 2016 the Company entered into an agreement (“Arrangement Agreement”) with Marsa Energy Inc. (“Marsa”) for Condor to acquire all of the issued and outstanding common shares of Marsa (“Marsa Shares”). The acquisition will be effected by way of a plan of arrangement (“Arrangement”) under the Business Corporations Act (Alberta). Pursuant to the Arrangement Agreement, all of the Marsa Shares will be exchanged for common shares of Condor (“Condor Shares”) based on an exchange ratio of 1.84326 Condor Shares for each Marsa Share held. On February 24, 2016 the shareholders of Condor and the shareholders of Marsa each approved the Arrangement. On February 25, 2016 the Arrangement was approved by the Court of Queen’s Bench of Alberta. On March 11, 2016 the outside date for completion of the Arrangement was extended from March 11, 2016 to April 11, 2016 in order to obtain the necessary consent of the Government of the Republic of Turkey. Completion of the Arrangement is also subject to certain stock exchange approvals and satisfaction or waiver of other closing conditions customary for a transaction of this nature. Subject to the completion of the Arrangement, Condor intends to undertake a 10-to-1 share consolidation of the Condor Shares immediately following the completion of the Arrangement.
- The Company’s gross Proved plus Probable reserves increased 83% to 3,104 Mboe as of December 31, 2015 as per the independent evaluation prepared by McDaniel & Associates
Consultants Ltd. for the Kazakhstan assets. The increase is due to higher estimated recovery rates related to the positive Shoba horizontal well performance and re-mapped reservoir volumes based on new geologic information.
- Working capital (defined as current assets minus current liabilities) as of December 31, 2015 was $47.3 million and the Company had no debt.
- The Zharkamys exploration period was extended for an additional ten months until December 14, 2016 with no associated increase in the Company’s work commitments.
- 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 during the first quarter of 2015 included production from the two Shoba horizontal wells which were drilled in the fourth quarter of 2014 representing the first shallow horizontal wells drilled in Kazakhstan’s Pre-Caspian basin. Although flow rates on both wells were restricted to minimize the potential for water and gas coning, the Shoba field produced an average of 424 bopd during the forty nine producing days in the first quarter of 2015 in which both wells were producing. Production is expected to resume in 2016 once Shoba and Taskuduk production contracts are executed and export sales are permitted.
- The KN-501 Primary Basin well was drilled to 3,992 meters and encountered numerous gas shows while drilling the over-pressured main hole section. However, no commercial hydrocarbon reservoirs were identified and the well was abandoned. The target zones appear to have been fully encapsulated in salt before younger, coarser-grained sediments could be deposited and therefore lacked the reservoir quality rock which was encountered in the Company’s play opening KN-E Primary Basin discovery. The total cost of drilling KN-501 was $7.7 million.
- The Company recorded net loss from continuing operations of $3.3 million for the year ended December 31, 2015 (2014: $10.8 million).