Mr. Don Streu reports

CONDOR ANNOUNCES 2023 FIRST QUARTER RESULTS

Condor Energies Inc. has released its unaudited interim condensed consolidated financial statements for the three months ended March 31, 2023, together with the related management's discussion and analysis. These documents will be made available under Condor's profile on SEDAR and on the Condor website. Readers are invited to review the latest corporate presentation available on the Condor website. All financial amounts in this news release are presented in Canadian dollars, unless otherwise stated.

Highlights

• The company is awaiting final approval from the government of Kazakhstan for its 95-per-cent working interest in a lithium brine mining licence in Kazakhstan. Procurement and contracting of long-lead equipment for 2023 drilling activities continues.
• Natural gas production in Turkey increased 3 per cent in the first quarter of 2023 to 18,536 Mcf (thousand cubic feet) or an average of 206 Mcf/d from 18,003 Mcf or an average of 200 Mcf/d for the first quarter of 2022.
• The company continues to actively pursue an agreement to operate multiple mid-sized existing natural gas fields in Uzbekistan.
• In Kazakhstan, activities are ongoing to secure a long-term LNG (liquified natural gas) feed gas supply contract.

Lithium licence acquisition

The company is awaiting final approval from the government of Kazakhstan for its 95-per-cent working interest in a lithium brine mining licence in Kazakhstan. A prior well drilled in the lithium licence for hydrocarbon exploration encountered and tested lithium brine deposits with lithium concentrations of up to 130 milligrams per litre as reported by the Ministry of Geology of the Republic of Kazakhstan. Title transfer for the licence is expected to be completed in the second quarter of 2023.

The lithium licence provides subsurface exploration rights for solid minerals until April 3, 2025. Within the 6,800-hectare lithium licence area, a well drilled in 1975 flow tested multiple horizons and discovered lithium concentrations in the Devonian-aged and Carboniferous-aged intervals. Based on wireline logs, the tested Devonian sand interval is 70 metres and the tested Carboniferous sand interval is 118 metres. The untested Devonian and Carboniferous sand intervals provide an additional 863 metres of lithium brine potential.

During 2023, the company plans to drill and test up to two wells to confirm the lateral extension and lithium concentrations in the tested and untested intervals, well deliverability rates, conduct preliminary engineering for the production facilities, and prepare a National Instrument 43-101-compliant mineral resources or mineral reserves report. Procurement and contracting of long-lead equipment for these drilling activities is under way.

The company intends to produce the lithium by utilizing closed-looped direct lithium extraction (DLE) technologies. With the lithium already in brine solution and applying existing DLE production technologies, the company expects to have a much smaller environmental footprint than existing lithium production operations. Furthermore, the company is evaluating the construction of a solar power generation project to support the long-term expansion of the project to achieve net-zero emissions. Also, given that the company's lithium licence is not associated with legacy oil wells, a less complex and capital intensive DLE technology is envisioned for separation of lithium from the brine.

Turkey operations

Gas production for the first quarter of 2023 increased 3 per cent to 18,536 Mcf or an average of 206 Mcf/d from 18,003 Mcf or an average of 200 Mcf/d for the first quarter of 2022. The Poyraz Ridge field has been producing for over five years and water production is increasing which requires additional well workovers to help mitigate its impact along with natural pressure declines. Artificial lift equipment recently installed on select wells has contributed to the above noted increased gas rates and additional wells are being evaluated for future artificial lift applications.

Posted Turkish gas prices for the first quarter of 2023 averaged $28.60 per Mcf as compared with $16.36 per Mcf in the first quarter of 2022, in Canadian dollar terms, but have decreased to $19.04 per Mcf as of May 1, 2023.

The company is seeking a partner to fund development plans at the Yakamoz field, which is located two kilometres north of the existing Poyraz Ridge field. The company was encouraged with the results from the previously drilled Yak 1-ST, as it encountered numerous strong gas shows while confirming reservoir-quality formations and an active hydrocarbon system and, despite being temporarily suspended, casing pressure has built up at the surface, indicating a gas presence. Development of the Yakamoz field would consist of re-entering, casing and fully evaluating the Yak 1-ST well, drilling the Yak-2 well and additional production wells as required. If successful, the Yakamoz field would be tied by pipeline into the Poyraz Ridge production and sales facilities.

General elections are scheduled to take place in Turkey on May 14, 2023, comprising Presidential elections to select the President and parliamentary elections to select Members of Parliament to the Grand National Assembly. The previous general election in Turkey was conducted in 2018.

Uzbekistan production contract and LNG strategy

The company continues to actively pursue an agreement to operate multiple mid-sized existing natural gas fields in Uzbekistan to optimize production and increase domestic gas supply by utilizing modern production technologies and techniques. The agreement is expected to include eight producing gas fields, associated gathering pipelines, gas treatment infrastructure, and the rights to explore and develop certain exploration areas surrounding the respective gas fields.

In addition, the company has presented a proposal to the government of Uzbekistan to use a portion of the increased gas production for LNG feedstock and provide the resulting LNG to mining operators and other users to displace diesel fuel usage. The company's LNG strategy in Uzbekistan would create a vertically integrated business with self-sufficient gas supply and by replacing expensive diesel with cleaner and cheaper LNG, decrease the mines operating costs, reduce the country's dependency on diesel imports, and positively impact the country's carbon reduction efforts by reducing overall carbon emissions.

LNG initiatives in Kazakhstan

The company continues to mature opportunities to implement proven North American modular LNG technologies and processes in Central Asia to displace diesel fuel usage in the industrial, transportation and power generation sectors. Kazakhstan is experiencing a natural gas shortage as internal demand continues to increase without sufficient new gas field development, which is impacting the company's ability to secure a long-term LNG feedstock gas supply contract.

Front-end engineering for a 125,000-gallon-per-day modular LNG facility has been completed. Design on a scaled down trailer-mounted version is also under way to utilize feed gas supplied from stranded gas assets that are not commercially viable due to pipeline infrastructure costs or from the associated gas from producing crude oil fields. The potential to profitably generate LNG at feed gas site locations is one of the many advantages that the company's LNG approach provides.

Natural gas production increased 3 per cent to 18,536 Mcf or an average of 206 Mcf per day for the three months ended March 31, 2023, from 18,003 Mcf or an average of 200 Mcf per day in the same period in 2022 due mainly to the continuing workover program that is offsetting increased water production and natural pressure declines. The company also produced 10 barrels of condensate in the three months ended March 31, 2023 (2022: nil).

The operating netback on natural gas sales increased to $100,000 or an average of $6.69 per Mcf for the three months ended March 31, 2023, from $50,000 or an average of $3.01 per Mcf in the same period in 2022 due mainly to higher natural gas prices, partially offset by higher production costs which includes $100,000 related to the workovers conducted in the first quarter of 2023.

We seek Safe Harbor.