(Disclosure: The following represents my opinions only. I am not receiving any compensation for writing this article, nor does Hydra Capital have any business relationship with companies mentioned in this post. I am long CPI.TO).
Condor Petroleum put out a very nice looking update from their Poyraz drilling program in Western Turkey today. You can link to the full news here. In a nutshell, and to quote directly from the company's press release:
“The Poyraz West 5 well log results are very impactful as they identify gas pay in the previously untested footwall section with the additional benefit of a new lower Sogucak interval. When combined with the recently drilled Poyraz 5 appraisal well, the gas pools have been significantly extended beyond prior mapped reserves areas. We are very pleased with these positive results which should yield meaningful additional reserves.”
How much has the field area been expanded you ask? Well, the Footwall target that the Poyraz well drilled into represents up to 30% of the total mapped area of the field and it had no reserves assigned to it. Addtionally, previously unknown reservoir intervals have been encountered in wells to date with gas found at deeper levels than what was previously known. Put those two factors together and you have a recipe for a very nice reserves bump in the New Year.
Test results from the recently drilled Poyraz 3 well are due in Janurary, as are results from the Poyraz West 2 well that is currently drilling. Will the market care? From the reaction today, Condor is clearly a bit of an obscure/lightly followed name, but that can only persist for so long in my mind. There's a whole investment world out there and when more people start looking at the economics of gas production in Turkey, Condor could get popular in a hurry. The stock is up 5 cents as I type this, which represents about a $2 million change in market cap. From my perspective, Condor's latest well result just added a lot more than $2 million of value to the company, so I've added to my position on the news.
Some assets get better with more drilling while others can seem to shrink away. Poyraz hasn't disappointed yet. Bring on the New Year.