CND - 12 month extension to permits granted
Our oil & gas exploration Investment, Condor Energy (ASX: CND) just had its permits extended for another 12 months.
CND holds ~80% of a giant offshore block in Peru - surrounded by oil and gas super majors, TotalEnergies, Occidental Petroleum and Chevron.
CND has been operating the permit under a Technical Evaluation Permit (TEA), which meant CND had 24 months after picking up the project to complete mostly data reprocessing work.
After that work, CND has managed to define:
- Piedra Redonda gas project - 2C contingent resource net to CND of ~802Bcf of gas - one of the largest undeveloped offshore gas discoveries on the west coast of South America.
- Oil exploration targets - unrisked ~2.4BN barrel prospective resource net to CND across five targets (the single biggest being a ~800M barrel prospect).
CND has for the past few months been running a “Farmout process” that “had commenced with multiple parties in the data CND room”.
The 12 month extension means CND will have the permitting runway to run the farm-out process without any time constraints.
CND said in today’s announcement that it would complete additional regional mapping and basin modelling to de-risk the project further AND “Advance commercial discussions through an active partnering process, with interest from global players already underway”.
CND was a first mover into the region, picking up its blocks before all of those majors and so we think there is a good chance they (at the very least) have been following CND’s work…
What’s next for CND?
🔲 Farm-out/partnering on oil exploration targets
CND has managed to define ~3bn barrels of oil in prospects (100% basis) across multiple targets on its project.
We want to see CND lock in a partner for these and firm up a first drill program for one of these targets.
We covered these targets in a previous CND note here: Tiny CND just declared a new multi-billion barrel prospective oil resource - farm-in to drill next
🔄 Farm-out/partnering on gas project
A few weeks back CND announced that it would commence marketing and commercialisation studies to “evaluate development pathways, assess viable market opportunities and identify the optimum commercialisation options”.
CND’s gas discovery is in shallow water and is less than 15km from the Peru shoreline…
It’s also a discovery that is technically de-risked, previous operators flowed gas to surface at a maximum 8.2mmcf per day.
AND that flow rate was from just a 32 feet section of the well that had 152 feet of total net pay…
Back in 2006 the gas field was also almost developed to try solve Ecuador and Peru's energy crisis..
(which is now a much bigger problem...)
Ecuador only has one offshore gas field (Amistad) which has 1Tcf of gas and has been in production since 2002 - its right near the maritime border with Peru (and CND’s Peruvian acreage).
We are hoping that this marketing study will be added to CND’s data room to help the company identify a farm-in partnership for this part of the project.
