Condor Petroleum Inc. ("Condor" or the "Company") (TSX:CPI) is
pleased to announce the release of its Interim Condensed
Consolidated Financial Statements for the three and six months
ended June 30, 2012, 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.
Second quarter 2012 highlights include:
During the second quarter the Company continued the exploration
programs at the Zharkamys West 1 territory ("Zharkamys") and the
Marsel territory ("Marsel") in Kazakhstan.
At Zharkamys, ninety day production tests on wells TasW-4 and
TasW-3 began in April and June, respectively, and these wells
produced an average of 166 bopd during the quarter (334 barrels of
oil per day flowed). Testing of TasW-3 will be completed in August
2012 and an additional ninety day test for TasW-4 is expected to
commence in August 2012, targeting a separate 11 meter
interval.
The Company drilled three successful Shoba appraisal wells
during the quarter. Shoba-8 and Shoba-9 s successful results extend
the Shoba field north of the mapped fault and confirm that a common
oil-water contact exists between fault compartments. These results
are expected to be used to upgrade reserves contained in the
northern fault block from their current 'Possible category. Shoba-6
results confirm the continuity of the reservoir within the Triassic
to the southeast of Shoba-1, in addition to defining new reserves
potential across the field from the Basal Jurassic zone.
Approval of the Shoba Trial Production Project ("TPP") has been
granted by the Kazakhstan regulatory authorities and the remaining
permits are expected in the third quarter of 2012, coinciding with
the originally planned production start-up and completion of the
facilities. The trial production and facilities will allow the
Company to continue to ramp up its sustained production
volumes.
The Ebeity East 201 ("Eb-E-201") exploration well was
directionally drilled to a total depth of 2,157 meters in June 2012
for a total cost of $1.5 million. EB-E-201 targeted a 3 way fault
closed structure in the shallow Cretaceous zone and a secondary
target zone in the deeper upper Permian. The shallow target was wet
and interpreted as lacking a suitable migration pathway. After
crossing a faulted section, a 20 meter hydrocarbon interval was
encountered at the top of the deeper Permian zone, as defined by
mud gas logs (c1 - c4 gas shows) and drill cuttings. While
continuing to drill to total depth, the wellbore conditions began
to destabilize due to the shallower fault zone. Despite several
days of reaming, hole-conditioning and multiple wireline
configurations, wireline logs could not be obtained over the
Permian zone. The wellbore conditions continued to deteriorate
while attempting to condition the hole and run production casing.
Ultimately, the inability to stabilize the wellbore resulted in
production casing not being run and the wellbore has been plugged
and abandoned.
Drilling of Shoba-7, the fourth Shoba appraisal well this year,
commenced in August 2012. The well was drilled to core point at 730
meters. While tripping out of the hole for core barrels, a gas
influx occurred and the well was shut in. There have been no
injuries to personnel or damage to equipment. Well control
operations are ongoing. Shoba-7 is unlikely to be ready to produce
when the planned Shoba TPP commences in the third quarter of
2012.
In the first quarter of 2012, the Company signed a Letter of
Intent ("LOI") to purchase a 90% interest in the Sagiz oil storage
terminal, located 12 kilometers northwest of Zharkamys. Project and
construction approvals for the refurbishment of the Sagiz Oil
terminal have been obtained from the Kazakhstan regulatory
authorities and operations have commenced. This project is on track
to receive its operating permit and be commissioned in the fourth
quarter of 2012.
At Marsel, the Asa-1 well reached a total depth of 2,670 meters
in April 2012. The primary Devonian target zone was encountered at
2,408 meters, consisting of fractured conglomerates and breccias.
Wireline logging, in combination with two successful open-hole
Drill Stem Tests ("DSTs"), confirms a continuous 288 meter gas
column has been penetrated with an estimated 110 meters of net pay.
The DSTs resulted in flow rates ranging between 2.1 and 11.1
MMscf/day. The gas was dry with no formation water indicated during
the flow periods. A gas-water contact was not encountered.
Production casing has been set in anticipation of additional flow
testing.
The Company disposed of the non-core Steelman (Saskatchewan,
Canada) properties during the quarter for proceeds of $3.1 million
and realized a $2.4 million gain on the disposal.
Selected financial information:
For the three months ended June 30 (000's) 2012 2011
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Oil and natural gas sales 825 866
Net loss attributable to Condor (879) (1,780)
Net loss per share - basic and diluted (0.00) (0.01)
Capital expenditures 8,127 10,160
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For the six months ended June 30 (000's) 2012 2011
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Oil and natural gas sales 1,622 1,704
Net loss attributable to Condor (4,933) (4,775)
Net loss per share - basic and diluted (0.01) (0.02)
Capital expenditures 16,957 13,429
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As at (000's) June 30, 2012 December 31, 2011
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Working capital 44,271 64,132
Total assets 197,169 206,170
Total liabilities 8,740 14,387
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About Condor Petroleum Inc.
Condor is an oil and gas corporation engaged in the exploration
for, and the acquisition, development and production of oil and
natural gas 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 and holds
non-operated working interests in a number of other properties in
Alberta, Canada.
Forward-Looking Statements
Certain statements in this news release 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'', "may", "will", "should",
"could", "would" or other similar wording. Forward-looking
information in this news release includes, but is not limited to,
information concerning the timing and ability to obtain various
regulatory approvals; the timing of planned well testing,
production, drilling and completion operations; the expectations,
timing and ability of the Company to mature and drill future
targets and prospects; reserve estimates, information concerning
the status and timing of the TPP, expected completion of the
transaction provided for in the LOI and the potential expansion of
oil marketing options, together with the timing associated
therewith. 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: satisfaction of the conditions to, and completion of,
the purchase of the oil storage and rail terminal; 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 attendant 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. These factors are discussed in
greater detail in filings made by Condor with Canadian securities
regulatory authorities.
Readers are cautioned that the foregoing list of important
factors affecting forward-looking information is not exhaustive.
Furthermore, the forward-looking information contained in this news
release is made as of the date of this news release 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 www.condorpetroleum.com
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