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, 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 news release are presented in
Canadian dollars.
2012 highlights include:
Zharkamys West 1 territory ("Zharkamys")
Kazakhstan annual production increased by 153% year-on-year
resulting from Shoba trial production commencing, as scheduled, in
September 2012 and from various ninety day production tests of
Shoba appraisal and Taskuduk wells. Total production from Zharkamys
to date in 2013 has averaged 570 bopd including 410 bopd from Shoba
where production has been constrained due to gas flaring
limitations. When Shoba transitions into commercial production,
which is expected in 2014, the permanent facilities will address
these limitations.
Four successful Shoba appraisal wells were drilled during the
year, which extends the field north of the previously mapped fault
and identified potential in the Basal Jurassic zone. Two of these
wells may be produced during the trial production period.
Subsequent to year-end, the Company discovered oil on the
KN-E-201 well; 58 meters of net hydrocarbon pay was identified from
wireline and mud logs with an additional 16 meters of pay indicated
from mudlogs without wireline log data. This discovery validates
Condor's unique geologic model and 3D seismic interpretation for
this play-type. Multiple intervals are planned to be completed and
put on individual ninety day production tests starting in the
second quarter of 2013. Drilling the first appraisal well,
KN-E-202, is also targeted to begin in in the second quarter of
2013.
In 2012, detailed seismic interpretation and geologic mapping
generated an exploration portfolio of 66 prospects for three
exploration phases, ranging from the shallow Cretaceous to deep
Devonian targets. This equates to an internal company estimate of
1,550 MMboe unrisked mean recoverable resource potential (see
resource advisory). Sproule International has performed a resource
audit on the Phase 1 prospects, a portion of the Phase 2 prospects,
and those Phase 3 prospects mapped from the 2010 3D seismic volume.
The internal company resource potential volumes are aligned with
the Sproule audits.
During the year, the Company signed a Letter of Intent to
purchase a 90% interest in the Sagiz oil storage terminal, located
12 kilometres northwest of Zharkamys. The Company will complete the
purchase of the terminal once it is fully refurbished, operational
and licensed for use. Refurbishment activities continue on the
terminal and commissioning is planned for 2013. The Sagiz Oil
terminal includes 7,500 barrels of oil storage capacity and has a
rail spur which ties directly into the main rail line between
Aktobe and Atyrau. In addition to providing expected oil
transportation cost savings, the terminal's existing access to the
rail system allow the Company to consider alternative oil marketing
options.
Marsel territory
The Asa-1 gas 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.
In November the Company signed a Memorandum of Understanding
with an international oil and gas group related to the sale of the
Company's 66% participation interest in the Marsel territory in
Kazakhstan. The parties are continuing due diligence and drafting a
Sale and Purchase Agreement is ongoing. The sale of the
participation interests would be subject to, among other things,
consent and certain approvals from the Government of
Kazakhstan.
The Government of Kazakhstan recognized weather-related force
majeure conditions and extended the current Marsel exploration
contract period to March 27, 2015. A further two year extension to
the existing contract is possible and will be applied for in 2014,
extending the Marsel exploration contract period to March 27,
2017.
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.
Resource Advisory
This press release includes information pertaining to internal
Condor generated estimates of Company resources effective February
8, 2013, which were prepared by a qualified reserves evaluator in
accordance with National Instrument 51-101.
Statements relating to resources are deemed to be forward
looking statements, as they involve the implied assessment, based
on certain estimates and assumptions, that the resources described
exist in the quantities predicted or estimated, and can be
profitably produced in the future. Many of these assumptions are
subject to change and are beyond the Company's control.
The resource estimates of Condor's properties described herein
are estimates only. The actual resources may be greater or less
than those calculated. Estimates with respect to resources that may
be developed and produced in the future are often based upon
volumetric calculations, probabilistic methods and analogy to
similar types of resources, rather than upon actual production
history. Estimates based on these methods generally are less
reliable than those based on actual production history. Subsequent
evaluation of the same resources based upon production history will
result in variations, which may be material, in the estimated
resources.
Prospective Resources disclosed herein are those quantities of
petroleum estimated, as of a given date, to be potentially
recoverable from undiscovered accumulations by application of
future development projects. Prospective Resources have both an
associated chance of discovery (geological chance of success) and a
chance of development (economic, regulatory, market and facility,
corporate commitment or political risks). The chance of
commerciality is the product of these two risk components. These
estimates have not been risked for either chance of discovery or
chance of development. There is no certainty that any portion of
the Prospective Resources will be discovered and, if discovered,
there is no certainty that it will be developed or, if it is
developed, there is no certainty as to either the timing of such
development or whether it will be commercially viable to produce
any portion of the resources. Unless otherwise stated, any
reference to Prospective Resources refers to Gross, Mean
Recoverable, Prospective Resources (Unrisked).
Forward-Looking Statements
All statements other than statements of historical fact may be
forward-looking statements. Such statements are generally
identifiable by the terminology used, such as "seek",
"anticipate'', "believe'', "intend", "expect", "plan", "estimate",
"continue", "project", "predict", "budget'', "outlook'', "may",
"will", "should", "could", "would" or other similar wording.
Forward-looking statements include, but are not limited to,
statements and information with respect to estimates of reserves
and/or resources, future production levels, targets, goals,
objectives and plans together with the respective timing associated
therewith. Forward-looking statements require the use of
assumptions that may not materialize or that may not be accurate
and are subject to known and unknown risks and uncertainties and
other factors, which may cause actual results or events to differ
materially from those expressed or implied by such information.
Such factors and assumptions include, among other things, the
results of exploration and development activities, prices of oil
and natural gas, regulatory changes, the timing of regulatory
approvals, the ability to obtain sufficient financing on reasonable
terms, the effects of weather and climate conditions, fluctuation
in interest rates and foreign currency exchange rates, the
availability of suppliers and their ability to meet commitments,
risks inherent with oil and gas operations, both domestic and
international. These factors are discussed in greater detail under
Risk Factors - Risks Relating to the Company in Condor's Annual
Information Form for the year-ended December 31, 2012. The Company
believes that the expectations reflected in these forward-looking
statements are reasonable, but no assurance can be given that these
expectations will prove to be correct and such forward-looking
statements should not be unduly relied upon. The Company does not
undertake any obligation to update or to revise any of the
forward-looking information, except as required by applicable
law.
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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