Condor Energies to sell Poyraz Ridge, Destan licences

Executive Summary

• Condor Energies provided a significant drilling update for its Uzbekistan operations, highlighting record-breaking horizontal drilling and strong reservoir quality at the Andakli-21 (A-21) well, with production expected in February 2026.
• The company announced the sale of its Turkish assets (Poyraz Ridge and Destan licenses) to a third-party buyer for a 10-year gross overriding royalty and nominal cash, subject to government approval.
• Concurrently, Condor is drilling a second rig for the Kumli-45 (K-45) vertical well to calibrate data for a future campaign of up to six horizontal wells, with testing planned for February 2026.

Key Details

• Uzbekistan Drilling Update (Andakli-21):
  • Reached Total Depth (TD) of 3,456 metres, including a 1,279-metre open-hole lateral section (record for longest horizontal in Uzbekistan).
  • Intersected over 960 metres of carbonate reservoir with >6% visible porosity.
  • Reservoir quality exceeded expectations: 223 metres of the lateral contained up to 12% visible porosity.
  • Significant gas shows observed, ranging from 20% to 31% gas volume in drilling fluid.
  • Plan: Acid stimulation of the entire A-21 lateral section to enhance productivity, followed by flow testing and bringing the well on production in the second half of February 2026.
  • Post-A-21, the 1,007-metre lateral of the previously drilled Andakli-23 (A-23) well will also be acid stimulated, tested, and brought online.
  • Acid stimulations to use small-diameter tubulars; larger coil tubing unit to be mobilized in Q1 2026.
• Uzbekistan Drilling Update (Kumli-45):
  • Second drilling rig operating on Kumli-45 (K-45), a vertical well targeting multiple reservoirs with a planned TD of 2,400 metres.
  • Recovered an 18-metre core at 2,150 metres from a target zone; core to be exported to Canada for special core analysis.
  • Purpose: Calibrate regional wireline log data to prioritize a subsequent drilling campaign of up to six horizontal wells from this pad.
  • K-45 planned to be tested in February 2026 after logging and casing.
  • Construction of a second drilling pad in an undeveloped portion of the Kumli field planned for Q1 2026 to drill one vertical and up to six horizontal wells.
• Sale of Turkish Assets:
  • Share Purchase Agreement (SPA) signed on Jan. 21, 2026, to sell shares of the wholly owned subsidiary holding Poyraz Ridge and Destan operating licences and gas fields.
  • Consideration: 10-year gross overriding royalty (rates 0-15% based on average daily production, calculated on sales revenues less government royalties and transport costs) with an aggregate cap of $10.0 million USD.
  • Cash Consideration: €18,000 due on closing date; no cash payment due on signing.
  • Buyer Minimum Work Commitment: Conduct workover activities and drill one new well on Turkish properties.
  • Operating Expenditures: Buyer responsible for all OpEx (production, G&A, taxes) commencing 60 days post-signing until completion.
  • Buyer Option: Can request company (as operator) to perform activities credited toward minimum work commitment; buyer pays related expenditures.
  • Termination: Either party may terminate if government approvals not received within one year. If terminated, company must repay capital expenditures for interim work from 90% of free cash flow from future Turkish gas production.
  • Completion: Expected within ten business days of receiving customary Turkish government approvals.

Notable Quotes

• "Our active drilling and completion programs are providing several catalysts that may yield further near-term production growth. We're very pleased with the reservoir quality and strong gas shows experienced while drilling the A-21 well and look forward to completing that testing program next month." — Don Streu, President and CEO
• "The sale of the Turkish assets reaffirms our strategic focus in Central Asia on our distinct first-mover energy security portfolio to increase production on the existing Uzbekistan fields, introduce LNG production in Kazakhstan, and develop and produce critical minerals from brines in Kazakhstan." — Don Streu, President and CEO