Condor Energies starts drilling program in Uzbekistan

Mr. Don Streu reports CONDOR BEGINS MULTI-WELL DRILLING PROGRAM IN UZBEKISTAN Condor Energies Inc. has started a multiwell drilling program in Uzbekistan. The first well is being drilled vertically to approximately 3,000 metres to penetrate and evaluate the currently producing carbonate reservoir sections as well as multiple deeper, underexploited stacked clastic reservoirs and basement rock formations. Drilling of the first well and a detailed evaluation program are expected to be completed in October, 2025. Data from the first well will be used to optimize subsequent horizontal wells which are internally estimated to initially produce between 13 and 20 MMscf/day (million standard cubic feet per day) per well, cost $4.2-million (U.S.) to drill and complete and take 40 to 45 days to drill. Accounting for a drilling learning curve, the estimated cost of the upcoming 12-well horizontal program is, on average, $3.3-million (U.S.) per well to drill and complete. The first horizontal well has a planned 1,000-metre lateral section which could be extended in subsequent wells as reservoir parameters dictate. Given that horizontal well performance was not included in the company's 2024 reserves report prepared by independent reserves evaluator McDaniel & Associates Consultants Ltd., material proved and proved plus probable reserves growth is possible once production history is obtained from the initial horizontal wells. Condor continues to expand its well prospect inventory by interpreting and integrating 1,462 square kilometres of recently reprocessed 3-D seismic data and 142 square km of 3-D seismic inversion attributes. These efforts have increased Condor's portfolio to 18 targets that can be classified as either undrilled attic gas accumulations in producing structures or newly identified structures and could extend the drilling program beyond 2026. The company is currently investigating the availability and timing to contract a second drilling rig to further accelerate overall gas production. In Uzbekistan, a detailed engineering study is under way for the installation of field compression to mitigate increasing sales gas pipeline pressures. Field compression is expected to be installed in 2026, and internal estimates suggest base production could increase by 25 to 55 per cent, although actual results may differ. The preliminary cost of compression could range between $12-million (U.S.) and $20-million (U.S.) based on various compression scenarios that will be further refined during detailed engineering and procurement activities. Uzbekistan production for the third quarter of 2025 through Sept. 7, 2025, has averaged 10,284 boepd (barrels of oil equivalent per day), in line with the second quarter of 2025 which averaged 10,258 boepd. Near-term production growth has been impacted by a combination of increased sales gas pipeline pressures and recent workovers that were more focused on modern data collection. However, production growth is expected to resume from the multiwell drilling program and the installation of field compression. In Kazakhstan, fabrication of the company's first modular LNG (liquefied natural gas) facility is on schedule to be completed by the end of the fourth quarter of 2025 (the first facility). The first facility and supporting equipment will then be shipped to Saryozek, Kazakhstan, for assembly and commissioning. Construction of LNG storage tanks and transport trailers has also commenced. LNG production from the first facility remains on track to begin in the second quarter of 2026 at 48,000 gallons of LNG per day. The company is finalizing LNG offtaker agreements and advancing several financing solutions for the first facility. Two additional liquefaction units are planned to be constructed at Saryozek shortly afterward, increasing Saryozek LNG production to approximately 150,000 gallons per day for a total EPC cost of $70.4-million (U.S.). As previously disclosed, planning for additional LNG facilities at Kuryk and Aktobe is continuing. Non-controlling interest in PEC project The company operates under a production enhancement services contract in Uzbekistan to increase the production, recovery and overall system efficiency from an integrated cluster of eight conventional natural gas-condensate fields (the PEC project). In the company's financial statements, the company recognizes 100 per cent of the production volumes, sales volumes, sales revenues, royalties and expenses related to the PEC project in Uzbekistan and then allocates 49 per cent of the comprehensive income (loss) attributable to the non-controlling interest holder. Accordingly, the production volumes, planned wells to be drilled, estimated capital costs and other metrics disclosed in this news release related to the PEC project are 100 per cent of the amounts attributable to the PEC project, of which 51 per cent are attributable to the company. We seek Safe Harbor.