Condor Petroleum Inc. ("Condor" or the "Corporation") (TSX:CPI) is
pleased to announce the release of its unaudited Interim Financial
Statements for the three and nine months ended September 30, 2011,
together with the related Management's Discussion and Analysis
("MD&A"). 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 press
release are presented in Canadian dollars. The unaudited Interim
Financial Statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS"). Further
details on Condor's conversion to IFRS are provided in the
Financial Statements and MD&A.
Third quarter and recent highlights include:
Kazakhstan - Zharkamys West 1
In September 2011, the Company completed a 1,280 km2 3D seismic
program on the south-eastern portion of Zharkamys and 87% of
Zharkamys is now covered with high fold, high resolution 3D
seismic, providing a data source for on-going prospecting
activities. This is also a key component to progressing the
Company's two phase exploration strategy.
Phase 1 of the exploration strategy targets shallow (up to 1500
meters), lower risk prospects that are intended to provide early
production and cash flow. Phase 2 focuses on deeper (1500 to 3500
meters), higher impact prospects that are intended to generate
significant reserve additions. The Phase 2 prospects currently
being matured are incorporating Phase 1 well results and insights,
including the calibrated 3D seismic responses to help identify
direct hydrocarbon indicators. The intent is to mitigate Phase 2
geologic risks. Tendering and contracting activities are underway
to drill the first Phase 2 sub-canopy well, Zhaman Koblandy 2
(Zk-2), which is planned to commence in December 2011.
Of the nine Phase 1 wells drilled to date in 2011, five have
been cased (Sh-1, Sh-2, Sh-3, Eb-1, Tas W-4) and four have been or
will be abandoned (Kn-3, Tse-1, Eb-5, Ut-6). The 90 day production
tests on the three Shoba wells began in August and September with
combined flow rates from the three wells averaging over 500 barrels
per day on various choke settings.
The Eb-1 exploration well was drilled to a total depth of 1,000
meters and encountered 8 meters of net oil pay in the Triassic
zone. After completing the well and beginning clean-up flow
activities, there was limited inflow to the wellbore as indicated
from surface pressure and flow measurements. Given the extensive
oil saturation observed in core recovered and porosity (16%)
derived from wireline logs, the reasons for the low inflow are
being further investigated. The well is currently suspended
awaiting possible further evaluation and remedial work.
The Eb-5 exploration well was drilled after Eb-1 and reached a
total depth of 1,000 meters. Although oil shows were encountered on
core samples and oil pay indicated on wireline logs, the well was
deemed non-commercial and abandoned. The most recent exploration
well, Ut-6, targeted a Triassic Post Salt prospect and reached a
total depth of 1,236 meters but did not encounter commercial
hydrocarbon accumulations and will be abandoned.
The TasW-4 Phase 1 well was drilled to a total depth of 1,329
meters and penetrated 19 meters of net oil pay within two Triassic
intervals. The lower interval, which contains 13 meters of net oil
pay, was not encountered in the original TasW-3 discovery and
represents an additional pay zone for the field. This interval was
identified using Condor's 3D seismic attribute and pre-stack
analysis. Based on formation pressure data, the oil gravity at
TasW-4 is estimated to be 35 degrees API. Production casing has
been run and cemented and the 90 day flow test will commence once
regulatory approvals are obtained.
One other well completed during the third quarter was TasW-3.
Originally drilled and tested in 2009 (stabilized oil rate of 220
barrels per day from a 5 meter net pay interval), an additional 5
meter net pay interval was identified with the recently acquired 3D
seismic data. The new interval flowed at a stabilized oil rate of
300 barrels per day during well clean-up operations and up to 580
barrels per day initially. The well produced 35 degree API gravity
oil with no water. The 90 day flow test will commence once
regulatory approvals are obtained.
There is no certainty that any of the hydrocarbons will be
recovered. Hydrocarbon recovery is subject to all of the risks
associated with oil and gas operations, both domestic and
international, as discussed in greater detail in Condor's
Management's Discussion and Analysis for the three and nine months
ended September 30, 2011 and in Condor's prospectus dated March 31,
2011.
Kazakhstan - Marsel
Since acquiring the Marsel license, the Company has gathered and
processed 1,761 km of high resolution 2D seismic and 426 km2 of 3D
seismic. The corresponding interpretation of the data has generated
a portfolio of both Devonian sandstone and Carbonate shoal
prospects. Acquisition of an additional 900 km of 2D seismic data
commenced in August 2011 and is now 70% complete, while remaining
on target to finish in December 2011. This latest seismic program
is focused on defining additional prospects in the under-explored
southern area of Marsel.
A drilling rig has been mobilized for the Assa 1 prospect, a
Devonian sandstone target with a total well depth of nearly 3,000
meters. Drilling operations are expected to commence in November
and reach the target interval by year end.
Selected information
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For the three months ended September 30 2011 2010
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Gross petroleum and natural gas sales 1,037,542 792,858
Net loss attributable to Condor Petroleum Inc. (2,371,064) (3,707,239)
Net loss per share - basic and diluted (0.01) (0.02)
Capital expenditures 12,388,091 9,971,126
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For the nine months ended September 30 2011 2010
----------------------------------------------------------------------------
Gross petroleum and natural gas sales 2,741,826 2,519,491
Net loss attributable to Condor Petroleum Inc. (7,145,849) (8,947,103)
Net loss per share - basic and diluted (0.02) (0.05)
Capital expenditures 27,908,572 19,092,896
----------------------------------------------------------------------------
As at September 30 December 31
2011 2010
----------------------------------------------------------------------------
Total assets, end of period 208,304,996 129,775,751
Working capital, end of period 88,760,683 42,333,310
----------------------------------------------------------------------------
About Condor Petroleum Inc.
Condor is a junior oil and natural gas corporation engaged in
the exploration for, and the acquisition, development and
production of oil and natural gas resources in Kazakhstan and
Canada. Condor holds a 100% interest in the oil and natural gas
exploration rights to the 2,610 km2 Zharkamys West 1 territory
located in Kazakhstan's Pre-Caspian basin, a 66% interest in the
oil and natural gas exploration rights to the 18,500 km2 (gross)
Marsel territory located in Kazakhstan's Chu-Sarysu basin and
operates certain properties in Alberta and Saskatchewan and holds
non-operated working interests and royalty interests in a number of
other properties in Alberta. For further information, see Condor's
prospectus, dated March 31, 2011, a copy of which is available
under Condor's SEDAR profile at www.sedar.com.
Forward-Looking Statements
Certain statements in this MD&A constitute forward-looking
statements under applicable securities legislation. Such statements
are generally identifiable by the terminology used, such as
"anticipate'', "believe'', "intend", "expect", "plan", "estimate",
"budget'', "outlook'', "scheduled", "may", "will", "should",
"could", "would" or other similar wording. Forward-looking
information in this MD&A includes, but is not limited to,
information concerning the timing and ability to obtain various
regulatory approvals; the timing of planned well testing and
drilling operations; the expectations, timing and ability of the
Company to mature and drill future targets and prospects; the
timing and ability of the Company related to the acquisition of
seismic data and its proposed use thereof; the possible extension
of exploration periods; the execution of drilling contracts; excess
profit taxes; the potential for additional contractual work
commitments; the flexibility of capital spending plans and the
source of funding therefore; the effect of the Company's risk
management program; the Company's ability to pay its creditors,
suppliers, and to meet and fund its contractual work commitments;
the effect of the Company's risk mitigation policies, systems,
processes and insurance program; the expected impact and timing of
various accounting pronouncements, rule changes and standards,
including IFRS, on the Company and its consolidated financial
statements; projections relating to the adequacy of the Company's
provision for taxes; projections with respect to natural oil and
gas production, the possible further evaluation and remedial work
on the Eb-1 well, interpretation of well results, increase to the
Marsel work program, the commencement of drilling operations, the
target interval and timing thereof, the intensions of the Phase 1
and Phase 2 strategies at Zharkamys, and the satisfaction of the
work commitments at Zharkamys and Marsel. By its very nature, such
forward-looking information requires Condor to make assumptions
that may not materialize or that may not be accurate.
Forward-looking information is subject to known and unknown
risks and uncertainties and other factors, which may cause actual
results, levels of activity and achievements to differ materially
from those expressed or implied by such information. Such factors
and assumptions include, but are not limited to: the results of
exploration and development drilling and related activities;
imprecision of reserves and resources estimates, ultimate recovery
of reserves, prices of oil and natural gas; general economic,
market and business conditions; industry capacity; competitive
action by other companies; fluctuations in oil and natural gas
prices; the ability to produce and transport crude oil and natural
gas to markets; the effects of weather and climate conditions;
fluctuation in interest rates and foreign currency exchange rates;
the ability of suppliers to meet commitments; actions by
governmental authorities, including increases in taxes; decisions
or approvals of administrative tribunals; changes in environmental
and other regulations; risks associated with oil and gas
operations, both domestic and international; international
political events; expected rates of return; and other factors, many
of which are beyond the control of Condor. Capital expenditures may
be affected by cost pressures associated with new capital projects,
including labour and material supply, project management, drilling
rig rates and availability, and seismic costs. Additional
information about Condor is contained in greater detail as set
forth in Condor's prospectus dated March 31, 2011, as well as in
other filings made by Condor with Canadian securities regulatory
authorities and may be accessed through the SEDAR website
(www.sedar.com).
Readers are cautioned that the foregoing list of important
factors affecting forward-looking information is not exhaustive.
Readers should also read the Risks and Uncertainties section below.
The forward-looking information contained in this MD&A are made
as of the date of this MD&A and, except as required by
applicable law, Condor does not undertake any obligation to update
publicly or to revise any of the included forward-looking
information, whether as a result of new information, future events
or otherwise. The forward- looking information contained in this
news release is expressly qualified by this cautionary
statement.
Contacts: Condor Petroleum Inc. Don Streu President & Chief
Executive Officer (403) 201 9694 Condor Petroleum Inc. Sandy Quilty
Vice President, Finance & Chief Financial Officer (403) 201
9694
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