Condor operations update – March 16, 2015
CALGARY, March 16, 2015 – Condor Petroleum Inc. (“Condor” or the “Company”) (TSX:CPI) is pleased to provide an update on operational activities on the Zharkamys West 1 Territory in Kazakhstan (“Zharkamys”).
Shoba Trial Production: Production at Shoba has been temporarily suspended due to constraints in domestic refining capacity and low prices for crude oil and refined crude oil products. Kazakhstan is experiencing an oversupply of refined crude oil products, including diesel, which is causing downward pricing pressures on domestically produced diesel and on crude oil. Currently, Kazakhstan refineries are either not operating or the offering prices are below the Company’s cost of operations.
The Government of Kazakhstan recently announced that customs duties on crude oil and certain refined products will be reduced. A temporary ban on imports of gasoline and diesel fuel from Russia has also been imposed. Both measures are intended to help alleviate the domestic market oversupply.
The Company plans to commence with export oil sales from Shoba and Taskuduk later on this year once the respective commercial production contracts are executed.
Drilling Update: The tendering process is underway to select contractors to drill the KN‐501 Primary Basin target with operations scheduled to commence in Q2 2015. The KN‐501 well offsets the Company’s play opening KN‐E Primary Basin discove y by 8 kilometers and is located under the same salt dome. The well is planned to reach 4,250 meters and is targeting 67 MMboe unrisked mean prospective resources (internal Company estimate – see Resource Advisory). The remaining costs to drill the well are estimated at CA$8 million.
Working Capital: The Company estimates current working capital at CA$58 million and has no debt.