Gas Explorer Uncovers Record Flow in Uzbekistan

Condor Energies Inc. (CDR:TSX) has provided an operational update on its Uzbekistan operations, highlighting strong initial results from its latest horizontal drilling campaign, according to a September 17 release.

The Kumli-48 horizontal well (K-48) reached a total depth of 3,233 meters, including an 863-meter open-hole lateral drilled into a lower carbonate reservoir identified by the earlier K-42 vertical well, the release said. The well initially delivered a peak flow of 19.5 million standard cubic feet per day (MMscf/d), equivalent to 3,250 barrels of oil equivalent per day (boe/d), before Condor restricted the rate to control high gas velocities.

During a four-hour test on a 1-inch choke, K-48 averaged 18.1 MMscf/d, or 3,017 boe/d, at a flowing tubing pressure of 1,005 psi. Formation water production was negligible, while the preliminary condensate-gas ratio stood at 7.6 barrels per MMscf. The company is now connecting the well to the infrastructure ahead of the start of gas sales.

Kumli-50 (K-50), which also targets the lower carbonate reservoir, has reached 3,375 meters and is undergoing completion work before testing, the company said. The rig used for K-50 has since moved to the K-51 horizontal well, which is targeting the same productive lower carbonate interval as K-48 and K-50. Meanwhile, the K-48 rig has been transferred to the nearby Andakli field, where it will drill the A-22 horizontal well into a regionally extensive stratigraphic carbonate play.

"The very strong flow results from K-48 and its predecessors demonstrate the transformative impact horizontal wells can deliver and validates the significant value realized by successfully applying proven reservoir characterization and modern drilling technologies," said President and Chief Executive Officer Don Streu.

Streu added that Condor has drilled eight wells on the Kumli Northwest structure during 2026, increasing production while expanding its inventory of drillable prospects to 58.

Moving one rig to the northern Andakli field marks the next stage of the company's Uzbekistan growth strategy, while the second rig continues developing Kumli.

Andakli covers a large area with an established gas charge, and recent testing has produced gas beyond the boundaries of previously mapped structural closures. With the commercial viability of horizontal development already demonstrated at Kumli, Condor believes the results could support broader exploration of Andakli's prospective acreage while continuing to advance production from the Kumli field.

Second-Quarter Results Set the Stage

Condor's second-quarter results, released August 13, showed Uzbekistan production averaging 13,851 boe/d — up 17% from the first quarter and 35% year-over-year — with natural gas and condensate sales totaling $27.14 million, a 20% increase from Q1.

During the seven-day period from August 6–12, the company achieved a production record of 17,925 boe/d over a 24-hour period, while production averaged 17,709 boe/d for the week, with weekly average production up 28% versus the Q2 average.

The results also detailed the K46 and K47 horizontal wells, which initially flowed at peak rates of 18.3 MMscf/d and 18.4 MMscf/d, respectively, before both were rate-restricted to manage high gas velocities, while the K42 vertical well tested at 11.2 MMscf/d — more than double pre-drill expectations and the same lower carbonate interval later targeted by K48 and K50.

Record Well Test Points to Growing Production

K-48 set a new field flow-rate record with a peak flow of 19.5 MMscf/d, surpassing the previous high set by K-46, and is expected to enter production shortly as the first horizontal well targeting the lower carbonate reservoir identified by the K-42 vertical well, according to a research report by Auctus Advisors Analyst Stephane Foucaud on September 19.

Additional wells should drive further production growth. K-50, which targets the same lower carbonate reservoir, has reached total depth and is preparing for testing, while drilling has started at K-51 into the same reservoir. A second rig has moved to the adjacent Andakli field in the northern part of the concession. Results from A-21, which encountered gas outside the previously mapped structural closure, have highlighted a substantial stratigraphic opportunity that could expand the prospective resource base if further drilling confirms its potential.

With several wells expected to begin producing before the end of 2026, Foucaud's current target of approximately 20 Mboe/d by year-end could prove conservative. The 2027 production forecast stands at about 23.5 Mboe/d, providing additional potential for growth. He maintains a CA$5.60-per-share target price.

At Saryozek, Foucaud expects LNG sales to begin in the second quarter of 2027 with an initial capacity of 0.2 million liters per day, rising to 0.95 million liters per day within a year. The facility will supply long-haul trucks with an estimated 1,250-kilometer range. Kazakhstan's approval of Chinese LNG-powered trucks creates a potential local market, particularly given the more than 1 million such vehicles already operating in China and regional diesel supply constraints. Condor could secure a financing package covering both Phase 1 and the expansion to 0.95 million liters per day during the fourth quarter of 2026.

Foucaud estimates ReNAV at CA$5.54 per share, while the LNG business carries an unrisked NAV of CA$8.45 per share. Under a scenario involving diesel prices 10% above the base case, the LNG NAV rises to CA$10.11 per share. Foucaud expects the first modular LNG facility to start up in the second quarter of 2027.

Record Flow Rate Lifts Analyst's Price Target

In a September 17 note, Research Capital Analyst Bill Newman maintained a Speculative Buy rating on Condor Energies and raised his target price to CA$6.30 per share from CA$5.35, following the company's strongest Kumli well test yet at K-48, which reached 19.5 MMscf/d and averaged 18.1 MMscf/d over a four-hour test with negligible water production.

The analyst said he views the result as further support for developing a second carbonate interval at Kumli, and has raised his 2027 production forecast to approximately 22,500 boe/d and his Uzbekistan funds flow estimate to CA$66.9 million from CA$51.8 million.

K-48's average rate compared with 11.2 MMscf/d from the earlier K-42 well that identified the same lower carbonate zone, while its preliminary condensate-gas ratio of 7.6 bbl/MMscf would equate to roughly 138 bbl/d of condensate if sustained at the test's average gas rate. Research Capital said the result increases confidence in applying horizontal development to the lower carbonate, with K-50 and K-51 providing near-term tests of its repeatability. K-50 has reached total depth in the same interval and is being completed ahead of a flow test, while K-51 is drilling into the zone, and a second rig has moved to the Andakli field to drill A-22, targeting a regionally extensive stratigraphic carbonate play where gas has already been found beyond previously mapped structural closures. The company has also flagged a Jurassic clastic opportunity at North Syuzma, where two workovers averaged 13.3 MMscf/d over 90 days.

In a September 17 note, Research Capital Analyst Bill Newman maintained a Speculative Buy rating on Condor Energies and raised his target price to CA$6.30.

Condor has identified 58 drilling locations and plans to operate two rigs through 2027, drilling 13 to 16 wells at an average cost of roughly US$3.7 million each. A contracted 1,200-kW Kumli booster compressor, targeted for commissioning in the second quarter of 2027, could add up to 30 MMscf/d — equivalent to about 5,000 boe/d — by lowering gathering pressure and offsetting declines from older wells.

Research Capital left its 2026 forecasts unchanged at 15,050 boe/d and CA$33.3 million of Uzbekistan funds flow, while lifting 2027 estimates to roughly 22,500 boe/d and CA$66.9 million — forecasts the analyst said could prove conservative if drilling results and the compression timeline hold. The revised CA$6.30 target applies a 5.0x multiple to Uzbekistan funds flow, up from 4.5x, and incorporates the multi-year drilling inventory, the newly tested second reservoir interval, planned compression, and a 50%-risked NPV for the first Kazakhstan LNG facility.

Near-term catalysts include K-48 reaching sustained production and tie-in for gas sales, the K-50 flow test, continued K-51 and A-22 drilling, an updated 2026 exit production rate, Kumli compression startup targeted for the second quarter of 2027, and financing and offtake agreements for the Kazakhstan LNG project ahead of initial sales targeted for the same quarter.

The Catalyst: Gas Market Tightens as LNG Demand Set to Double

U.S. natural gas supply keeps setting records even as demand pulls in different directions. Lower 48 production averaged roughly 113.1 billion cubic feet per day (Bcf/d) in September, edging past August's record monthly average of 112.2 Bcf/d, according to Trading Economics, which also reported a below-average storage build of 44 Bcf for the week ended September 11 — well under the five-year average of 74 Bcf — as late-season heat boosted power-sector demand.

Henry Hub spot prices have climbed to around $2.90 per million British thermal units on the back of that heat-driven draw. At the same time, flows to major U.S. LNG export terminals dipped to a three-week low of 17.5 Bcf/d, largely due to maintenance at Cameron LNG in Louisiana, per Energy Intelligence.

Overseas, the picture is tighter still. European buyers are outbidding Asian importers for LNG cargoes as spot prices have surged roughly 150%, with several LNG-producing countries hobbled and Europe facing a winter storage deficit — leaving the U.S. well positioned to help fill a potentially tight global market, according to Mansfield Energy and Energy Intelligence.

Adding to the geopolitical premium, Qatar's energy minister said this week that pipeline routes bypassing the Strait of Hormuz aren't commercially feasible, underscoring the chokepoint's continued importance to global gas flows, per Energy Intelligence. Against that backdrop, capacity keeps expanding: Corpus Christi LNG's ongoing expansion has made it the second-largest LNG export facility in the U.S., according to LNG Global's Gastech 2026 industry roundup.

A September 17 ExxonMobil Global Outlook report argues that sustained oil and gas investment is more critical now than ever, since producing wells naturally decline over time and require continued capital just to hold supply steady. ExxonMobil estimates that without any new investment starting today, global natural gas supply would fall roughly 11% per year, opening a shortfall of more than 350 billion cubic feet per day by 2035 — about 75% of projected global demand — while limiting investment to existing fields alone would still leave supply well short of what's needed under the International Energy Agency's and IPCC's lower-emission demand scenarios. The company projects LNG trade, which met nearly 15% of global natural gas demand in 2025, will climb past 20% by 2050 as global LNG demand roughly doubles, with Asia Pacific driving about 70% of that growth and new supply flowing primarily from North America, the Middle East, and Africa.

Ownership and Share Information¹

About 3.7% of the company is owned by insiders and management, about 16.74% by strategic investors, and about 0.28% by institutions. The rest is held by retail.

Its market cap is CA$377.72 million with 86.36 million shares outstanding. It trades in a 52-week range of CA$1.51 and CA$4.90.

Common Investor Questions

What did Condor Energies announce on September 17? An operational update on its Uzbekistan operations, highlighted by its K-48 horizontal well, which reached a peak flow of 19.5 MMscf/d — a new field flow-rate record — before being rate-restricted to 18.1 MMscf/d during a four-hour test.

How does K-48 fit into the company's broader drilling program? It's the first horizontal well to target the lower carbonate reservoir interval identified by the earlier K-42 vertical well. Follow-up wells K-50 and K-51 are testing the same interval, while a second rig has moved to the nearby Andakli field to drill A-22, targeting a separate stratigraphic play where gas has already been found beyond previously mapped boundaries.

What did the company's second-quarter results show? Uzbekistan production averaged 13,851 boe/d, up 17% quarter-over-quarter and 35% year-over-year, with a brief production record of 17,925 boe/d hit in early August as new wells were tied in.

What do analysts think of the K-48 result? Research Capital's Bill Newman raised his price target to CA$6.30 from CA$5.35, maintaining a Speculative Buy rating and lifting his 2027 production and funds-flow forecasts. Auctus Advisors' Stephane Foucaud maintained a CA$5.60 target, saying his roughly 20,000 boe/d year-end 2026 target could prove conservative given the pace of new wells coming online.

What's happening with Condor's Kazakhstan LNG plans? Foucaud expects the Saryozek LNG facility to begin sales in the second quarter of 2027, with initial capacity of 0.2 million liters per day scaling to 0.95 million liters per day within a year, aimed at supplying long-haul trucks. Foucaud estimates an unrisked NAV of CA$8.45 per share for the LNG business alone.

What's the broader backdrop for natural gas and LNG right now? U.S. Lower 48 gas production is running at record levels (roughly 113.1 Bcf/d in September), while European buyers are outbidding Asian importers for LNG amid a roughly 150% spot-price surge and a looming European winter storage deficit. ExxonMobil's latest Global Outlook projects global LNG demand will roughly double by 2050, with continued investment needed just to offset natural production declines.