Condor Petroleum Inc.

Condor Petroleum Inc.

August 13, 2012 21:07 ET

Condor Announces 2012 Second Quarter Results

CALGARY, ALBERTA--(Marketwire - Aug. 13, 2012) - 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 and on the Condor website at 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-9Γǃs 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 „PossibleΓǃ 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
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
For the six months ended June 30 (000's) 2012 2011
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
As at (000's) June 30, 2012 December 31, 2011
Working capital 44,271 64,132
Total assets 197,169 206,170
Total liabilities 8,740 14,387

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 KazakhstanΓǃs Pre‐ Caspian basin, a 66% interest in the oil and natural gas exploration rights to the 18,500 km2 (gross) Marsel territory located in KazakhstanΓǃs Chu-Sarysu basin and operates certain properties and holds non-operated working interests in a number of other properties in Alberta, Canada.

ForwardLooking 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.

Contact Information

  • 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