CND appoints former $1BN Karoon Energy CEO - Dr Julian Fowles as Non-Executive Director

Our oil & gas Investment Condor Energy (ASX: CND) just added $1BN Karoon Energy’s former CEO and Managing Director - Dr Julian Fowles to its board as a non-executive director.

He brings over 35 years of international oil & gas experience but his time at Karoon is most relevant to CND.

Karoon was actually the previous holders of the block CND is operating right now offshore in Peru.

Karoon actually brought in tullow as a farm-in partner for a well on the project - the well was eventually drilled in 2020 and then stopped when COVID sent oil prices negative:

(source)

Karoon literally stopped drilling the well in mid 2020 before hitting Total Depth (TD).

Dr Julian became CEO/MD of Karoon in November 2020 in the middle of Karoon’s restructure away from offshore assets like Peru.

So Julian will know and understand the asset fairly well from his time at Karoon.

(source - Julian’s LinkedIn page)

And we think Julian is coming onboard at the right time - as CND waits for the outcome of its application to Peruvian regulators for a license contract over the block.

At the moment, CND holds a TEA over the block which has:

• An existing 1 Tcf gas discovery (contingent resource), and
• >3.3 billion barrel prospective oil inventory across six prospects (as well as plenty of other targets that aren’t included in the current prospective resource estimates)

All surrounded by $251BN TotalEnergies…

(source)

CND is currently operating the block under a TEA (Technical Evaluation Agreement) - basically an agreement between CND and the Peruvian regulators to do desktop studies on a project AND negotiate the terms for an exploration license on a block.

Under the TEA, CND had a few years operating the asset under a low cost desktop study focused work program with obligations to do:

• Reprocess and reinterpretation of existing 2D seismic data across the block
• Desktop geological and geophysical evaluation studies
• Environmental baseline assessment studies

Back in May, CND applied to convert the TEA into an exploration license contract.

The exploration license will be when CND commits to a drilling well over a multi-year pre-determined commitment for the project.

(source)

CND is currently capped at ~$12M (at 1.5c) and given the block already has a discovery + multi billion barrel oil prospects, we think that a conversion into an Exploration Licence could be a major catalyst on its own.

The flip side of this is also true, IF CND isn’t granted the block then it could be left with no core asset and the market cap could re-rate lower.

What's next for CND?

🔄 Convert the TEA into an exploration license

CND has now completed the final steps of its Technical Evaluation Agreement work program (focused on seismic reprocessing).

Next we want to see CND move forward and apply for a conversion of its TEA into the equivalent of exploration licenses.

The application was submitted in May - so now its just a matter of waiting to see what comes from the application process.