CND identifies structural similarities the world’s biggest offshore oil discoveries

Our Investment Condor Energy (ASX: CND) just put out a strong technical update on its offshore oil and gas project in Peru.

CND holds 80% of a Technical Evaluation Agreement (TEA) on a giant offshore block in Peru’s Tumbes Basin.

A TEA means that CND has an oil and gas agreement that grants it the exclusive right to negotiate an exploration License Contract over a specified area..

The project has:

1. An existing gas discovery based on a Best Estimate Contingent Resources of 1 Tcf (100% gross) of natural gas.
2. Undrilled oil exploration prospects for a combined ~3.3BN barrels (with the single biggest target being Bonito at approx 1BN barrels).

(source)

Today, CND confirmed that “large-scale deepwater turbidite fan systems extending across the block”.

Basically telling us CND is seeing the right type of technical setting for the rocks/sands to host oil and gas deposits.

We are not geophysicists so it's always difficult to evaluate these technical announcements - the way we try to get a read on these type announcements is by looking at how these feature in other deposits globally.

So it was nice to see in CND’s announcement the comparisons to the Venus discovery in offshore Namibia…

Venus was discovered by Impact Oil & Gas and in 2022, containing an estimated 1.5 billion barrels of light crude and 4.8 Tcf of natural gas. (source)

TotalEnergies ended up purchasing an additional 10.5% of this block (plus 9.5% of another for US$99M in reimbursement for Impact’s costs removed cost obligations until production (with future costs to come out of future sales). (source)

According to CND “basin floor turbidite fan reservoirs host the Venus discovery”:

(source)

We already know there are existing discoveries inside CND’s block:

• Barracuda 1972 oil discovery
• Corvina (excluded from CND), which produced ~3,500 barrels per day at its peak (source)

And the broader basin has produced 1.7BN barrels of oil historically.

So now to see the geology start to stack up too we the technical case for drilling some of CND’s targets just got a lot stronger.

(Hopefully the majors with blocks in the area (like TotalEnergies, Chevron and Occidental are looking at today’s announcement and liking what they see too):

Interestingly, Occidental, Chevron and Westlawn ran Peru’s largest-ever 3D marine seismic survey so we await to see if this turns into drilling, results were expected early this year so might be near. (source)

The case for a farm-out just got stronger too?

CND has previously said it has commenced a farmout process with multiple parties in the data room. (source)

With the reservoir risk now addressed, CND has another data point to put in front of potential partners, this is on top of the ~3.3BN barrels of prospective resources and the 1Tcf gas discovery.

We are hoping this kind of work is what gets a major partner over the line to fund the first exploration well…

We think, CND is deal ready for two reasons:

1. We think the oil prospects are big enough to warrant drilling AND IF someone gets lucky and discovers something there are plenty of other leads that can be followed up over CND’s blocks.
2. Because a development scenario was considered for the gas asset back in 2006. Now with more demand for gas locally (in both Peru and Ecuador) as well as internationally, we think the chances someone relooks at that old development plan is much higher.

Check out our most recent deep dive article: CND: 3 billion barrels of oil prospective resource. 1Tcf gas DISCOVERY. $13.6M market cap. Oil & gas back in 2026?

Since this article, CND expanded the Raya prospect adding 341M barrels oil, which we covered here.

What's next for CND?

🔄 1D basin modelling — final TEA component

CND is currently completing the final steps of its Technical Evaluation Agreement (focused on seismic reprocessing).

Next we want to see CND move forward and apply for a conversion of its TEA into the equivalent of exploration licenses.

Once that's done, CND can apply to convert the TEA into an exploration Licence Contract, which is the critical step that gives CND the regulatory framework to drill exploration wells.

In a recent presentation CND made note that it is preparing the paperwork for this step, so we await for further updates on the timeline:

(source)

🔄 Piedra Redonda gas commercialisation

A few months ago, CND signed an MOU with Promigas Peru (the gas distributor for 94% of the Peruvian market) to evaluate development pathways for its 1Tcf gas discovery:

(source)

We covered that news here: CND signs MOU with Peruvian Gas Distributor for its 1tcf gas project

CND’s most recent update in the quarterly said that for the gas project it was aiming to establish the framework for joint commercial and technical studies to supply gas from its gas field.

This was from a non binding Memorandum of Understanding, so we wait to see if this progresses further because it looks like an interesting commercial opportunity.

We think the gas discovery underpins CND’s current $16M valuation so we’re looking forward to seeing any updates from that part of the project.

See our deep dive on the gas asset here: CND: 3 billion barrels of oil prospective resource. 1Tcf gas DISCOVERY. $13.6M market cap. Oil & gas back in 2026?