CND - US Major Anadarko confirms 2027 offshore Peru well

Our oil and gas Investment Condor Energy (ASX: CND) holds 100% of a Technical Evaluation Agreement (TEA) over a giant offshore block in Peru's Tumbes Basin.

Inside CND's block there is a previously flow tested 1.1 trillion cubic feet gas discovery (contingent resource, 2C) AND 3.3 billion barrels of unrisked prospective oil resources (2U).

CND currently has an application in with the Peruvian regulators to convert the TEA into a full Exploration Licence Contract.

That licence would give CND the right to drill and do deals over its block and we think the granting alone could be a major catalyst.

During the week CND shared an article from Peruvian energy outlet Energiminas that we think is another positive signal for offshore Peru…

(source - article is originally in spanish)

Anadarko is part of US$86BN supermajor Occidental which has confirmed it will move into the Third Exploration Period on its three blocks south of CND.

Part of that move is a commitment to drill its first deepwater exploration well in 2027.

Anadarko's decision is backed by the 3D marine seismic survey it shot in 2024, the biggest ever recorded off Peru's Pacific coast at 6,018km2, at a cost of ~US$40M.

So they have already spent ~US$40M and now have committed to drill.

(source)

Occidental is one of four supermajors (alongside TotalEnergies, Chevron and Repsol) that came into offshore Peru AFTER CND picked up its ground back in 2023.

So we think every new dollar and drill commitment can only increase interest in the basin... and also in CND's block, which we have said in the past is a dealable project.

(A farm-out or funding deal is never guaranteed though, and these things can take time.)

The key catalyst remains the licence decision - which we covered in our latest CND Deep Dive article: CND: TEA to full license conversion in coming weeks to rerate $12M CND?

What does CND have?

CND holds a 100% interest in a Technical Evaluation Agreement (TEA) for an offshore oil and gas exploration block in Peru.

A TEA is basically the step before an exploration license is officially granted and a company gets full exploration rights over a block in Peru.

CND has an application in right now to convert its TEA into an exploration license and we think that could be the next big catalyst for CND.

Inside CND’s block there is:

• 3.3 billion barrels of unrisked prospective oil resources (2U) (the swing for the fences exploration upside), AND
• An existing, previously flow tested 1 trillion cubic feet (TCF) gas DISCOVERY (contingent resource, 2C).

We think IF CND’s TEA is converted into an exploration license any warming up done during those discussions can start being converted into deals…

By that we mean IF any other supermajor wanted to come into Peru they could just partner with CND on either:

• The 3.3BN oil unrisked prospective resources - big enough to warrant drilling AND if a discovery is made - plenty of follow up targets to drill.

(source)

• A 1.1TCF gas discovery (contingent resource) that has seen a development scenario considered for it back in 2006.

Someone could hypothetically come in for the gas alone OR come in for the oil alone.

The big appeal will be for someone big enough to come in and develop the gas while going for moonshot exploration on the oil.

We also like that there is a precedent for big deals being done offshore in Peru too.

Back in 2009, KNOC (the South Korean National Oil Corporation) and Ecopetrol (the Colombian National Oil Company) signed a deal worth US$900M for projects to the south of CND's block. (source)

Then there was the farm-out the previous owners of CND’s block ($960M Karoon Energy) did a deal with Tullow Oil back in 2019.

And the most recent one is the one that Occidental did with Westlawn…

(source)(source)(source)

We think there is a very good chance CND is able to attract a farm-in partner for the project again.

What’s next for CND?

License application outcome

The single biggest catalyst for CND right now is the outcome of the licence contract application.

Up until now, CND operated the project under a Technical Evaluation Agreement (TEA).

Reprocessing seismic data, new geological modelling and updating the resource estimates over the project. (source)

Back in May CND made its submission to convert the TEA into a license contract:

Ultimately, the licence contract is what gives CND the right to drill and develop the block.

And we think IF successful - that grant alone could be a major catalyst for a re-rate in CND’s share price…

We think it will also put CND’s block in play and allow for deals to be done over the asset:

(source)