CALGARY, ALBERTA--(Marketwire - March 20, 2013) - 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.
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.
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).
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.