CND provides update on Piedra Redonda gas project in Peru

Our 2023 Energy Pick Of The Year Condor Energy (ASX: CND) has provided a promising update on its Piedra Redonda gas project in Peru, outlining multiple potential development pathways.

Piedra Redonda, is one of three prospects that CND is working on:

(Source)

Today’s announcement says that CND completed a technical review of the Piedra Redonda gas field, identifying scalable development options like gas-to-power and compressed natural gas (CNG) for industrial/domestic use.

Within Piedra Redonda, lies a historical discovery well called C-18X.

The 1978 discovery well C-18X tested at 8.2 mmcf/d “from a limited 36 feet interval out of an estimated total 152 feet net pay interval. A significant amount of pay in the C-18X well was not tested due to program constraints and presents additional deliverability upside”.

So it looks like CND’s Peru project is shaping up nicely, with recent studies today demonstrating that CND is thinking ahead to development and monetisation.

Two things which could help advance any potential commercial discussions.

We note energy supermajor TotalEnergies has ground next door to our Investment:

Oil & Gas Supermajor TotalEnergies picks up ground next to CND

How does this impact our CND Investment Memo?

Today’s announcement sees CND thinking about how the project can be developed and monetised, which is closely related to why we Invested in CND:

Why did we invest in CND?

Existing processing infrastructure

CND’s project sits ~70km to the north of the Talara oil refinery. The refinery has been processing oil from the Talara basin for decades.

Source: 5 December 2023 CND Investment Memo

What’s next for CND?

Target #1 (Bonito-Volador prospect) 🔄

At Bonito, CND has completed ~250km^2 of 3D seismic reprocessing.

Target #2 (Raya prospect) 🔄

At the Raya prospect, CND has completed ~400km^2 of 3D seismic reprocessing.

CND picked Raya as one of its three main targets primarily because this part of its project had the potential for similar “stratigraphic and structural traps” to the two nearby discoveries.

The two discoveries are - Barracuda and Delfin, which were both confirmed oil discoveries.

Target #3 (Piedra Redonda) 🔄

At Piedra Redonda CND has completed ~400km^2 of 3D seismic reprocessing.

As mentioned earlier, CND already has a 404 billion cubic feet of gas (Bcf) contingent resource and a 2.2 trillion cubic feet (TCF) prospective resource for Piedra Redonda (on a 100% basis).

That resource comes from only a small part of the overall area covered in Piedra Redonda.

Next up, we want to see an Updated Independent Resource Estimate across this target.

Read our latest note on CND below:

How big is it? CND resource estimate due - TotalEnergies next door