Condor Faces Funding Pressure Amidst Major Resource Upgrade at Piedra Redonda

Resource Upgrade and Technical Advances

Condor Energy Limited (ASX: CND) has delivered a compelling update in its December 2024 Quarterly Activities Report, announcing a best estimate contingent resource of 1 trillion cubic feet (Tcf) of gas at its Piedra Redonda field offshore Peru. This significant upgrade, independently assessed by RISC Advisory, follows the reprocessing of 3D seismic data and integrated geological, petrophysical, and geophysical studies that have refined the understanding of the field's reservoir and trapping mechanisms.

The reprocessed seismic data, conducted by Advanced Geophysical Technologies in Houston, has notably enhanced fault resolution, frequency content, and deep imaging quality. This has led to a reinterpretation of the Piedra Redonda trap as primarily stratigraphic, rather than the previously assumed structural fault-bound trap. Such a shift opens new exploration opportunities along strike and suggests improved reservoir connectivity, which is critical for future development potential.

Development Potential and Market Proximity

Strategically located near existing infrastructure and market demand, Piedra Redonda is positioned as one of the largest undeveloped offshore gas discoveries on South America's west coast. Condor has identified multiple scalable, phased development options, including gas-to-power projects and compressed natural gas (CNG) solutions targeting local industrial and domestic consumption. The proximity to the Talara Basin, where smaller successful gas projects supply electricity and residential gas, underscores the commercial viability of Piedra Redonda's development for the Tumbes region and beyond.

Review of the historical C-18X discovery well, which tested at 8.2 million standard cubic feet per day (MMSCF/d) on a limited choke size, indicates substantial additional deliverability potential. The well produced dry, sweet gas with minimal impurities, reinforcing the field's strong monetisation prospects. The follow-up C-13X well, despite drilling challenges, showed promising gas indications and reservoir quality, further supporting the resource base.

Portfolio Rationalization and Financial Position

Alongside its technical progress, Condor is streamlining its portfolio to focus on Peru. The company has submitted an application to surrender the EP127 license in the Northern Territory and noted the cancellation of the EP499 permit held through its shareholding in Goshawk Energy Pty Ltd. No activity was reported on other Australian permits during the quarter.

Financially, Condor ended December 2024 with $0.9 million in cash and no debt, maintaining a market capitalisation of approximately $17 million. The company reported net cash outflows from operating and investing activities, reflecting ongoing exploration and evaluation expenditures. To support its work program, Condor has announced a placement to raise $3 million before costs, aiming to extend its cash runway beyond the current estimated 1.75 quarters of funding.

Looking Ahead

High-graded prospects within the Technical Evaluation Agreement (TEA) LXXXVI block are undergoing detailed mapping and independent resource assessments, which could further enhance Condor’s resource base and development options. The company’s technical team, led by Managing Director Serge Hayon, brings extensive expertise in reservoir engineering and exploration, positioning Condor to advance its offshore Peru assets strategically.

As Condor continues to refine its resource estimates and development strategies, the market will be watching closely for updates on appraisal activities, funding progress, and potential partnerships that could unlock the full value of the Piedra Redonda discovery.