Mr. Don Streu reports

CONDOR ANNOUNCES 2023 SECOND QUARTER RESULTS

Condor Energies Inc. has released its unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2023, together with the related management's discussion and analysis (MD&A). 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:

• In July, 2023, the government of Kazakhstan awarded Condor a 100-per-cent working interest in a contiguous 37,300-hectare lithium brine mining licence in Kazakhstan for a six-year term.
• The company is awaiting final approval from the government of Kazakhstan for its 95-per-cent working interest in a separate lithium brine mining licence in Kazakhstan.
• In June, 2023, the company established a $5.9-million (U.S.) ($7.8-million (Canadian)) three-year term loan facility that bears interest at 9.0 per cent per annum, and is available for working capital requirements and general corporate purposes.
• The company continues with final negotiations and approval of the definitive legal documents for a production redevelopment project to assume full operations of eight existing gas-condensate fields in Uzbekistan.
• In Kazakhstan, discussions are continuing to secure a long-term LNG (liquefied natural gas) feed gas supply contract.

Lithium licences in Kazakhstan

In July, 2023, the government of Kazakhstan awarded Condor a contiguous 37,300-hectare lithium brine mining licence in Kazakhstan (the first lithium licence). The company holds a 100-per-cent working interest in the first lithium licence, which provides the subsurface exploration rights for solid minerals for a six-year term.

A prior well drilled in the first lithium licence for hydrocarbon exploration encountered and tested brine deposits with lithium concentrations of 67 milligrams per litre in Carboniferous-aged intervals as reported by the Ministry of Geology of the Republic of Kazakhstan. A 670-metre column of tested and untested brine reservoir has been identified from historical wireline log and core data. This well also penetrated the very top of the Devonian-aged sediments and reservoir sands were encountered but not tested.

As previously disclosed, Condor has also entered into a binding sale and purchase agreement for a separate lithium brine mining licence (the second lithium licence) with a state-owned entity (the seller). A prior well drilled in the second lithium licence for hydrocarbon exploration encountered and tested brine deposits with lithium concentrations of up to 130 milligrams per litre in Devonian and Carboniferous-aged intervals as reported by the Ministry of Geology of the Republic of Kazakhstan. A 1,000-metre column of tested and untested brine reservoir has been identified from historical wireline log and core data. Condor will hold a 95-per-cent working interest in the second lithium licence and operate and be responsible for financing all activities while the seller will maintain a 5-per-cent carried working interest. The second lithium licence was originally assigned to the seller on April 3, 2019, and provides the subsurface exploration rights for solid minerals on a contiguous 6,800-hectare area for a six-year term. The company is awaiting final approval from the government of Kazakhstan for the second lithium licence.

The first and second lithium licences are strategically located between Europe and China, providing direct access to existing and robust lithium markets. The company intends to produce the lithium by utilizing closed-looped direct lithium extraction (DLE) technologies. Given that the company's lithium licences are not associated with legacy oil wells nor any reported presence of hydrogen sulphide, a less complex and less capital intensive modular DLE technology is envisioned for the separation of lithium from the brine when compared with lithium extraction projects targeting oil field brines. By applying proven DLE production technologies, the company expects to have a much smaller environmental footprint than existing lithium production operations which use open-pit mining or brine evaporation ponds. The company is also evaluating the construction of a renewable power generation project to achieve net-zero emissions for its lithium production.

The company's initial development plan over the next 12 months includes drilling and testing two wells to verify deliverability rates, confirm the lateral extension and concentrations of lithium in the tested and untested intervals, conduct preliminary engineering for the production facilities, and prepare a mineral resources or mineral reserves report compliant with National Instrument 43-101, Standards of Disclosure for Mineral Projects. Procurement of long-lead equipment and contracting a drilling rig is under way.

New 9.0 per cent loan facility established

On June 30, 2023, the company established a $5.9-million (U.S.) ($7.8-million (Canadian)) three-year term loan facility that bears interest at 9.0 per cent per annum. The loan facility is unsecured, non-revolving, requires quarterly interest payments, and is available for working capital requirements and general corporate purposes, including the advancement of the lithium brine and Uzbekistan gas field redevelopment initiatives.

The loan facility comprises separate loans from a group of arm's-length lenders (each a lender) made pursuant to credit agreements between Condor and each lender on substantially the same terms other than the timing for principal repayment. The loan facility was completed in two tranches comprising $500,000 (U.S.) ($700,000 (Canadian)) with an effective date of June 30, 2023, and principal due at maturity on June 30, 2026, and, subsequent to period-end, $5.4-million (U.S.) ($7.1-million (Canadian)) with an effective date of July 14, 2023, of which $2.6-million (U.S.) ($3.4-million (Canadian)) of principal is due at maturity on July 14, 2026, and $2.8-million (U.S.) ($3.7-million (Canadian)) of principal is due in eight equal quarterly payments commencing on Oct. 14, 2024 and the final payment due on July 14, 2026.

In connection with the loan facility, Condor issued a total of 2,600,002 common share purchase warrants at an exercise price of 48 cents per share. Each lender received one-third of a warrant for each dollar contributed to the loan facility for a total of 1,966,669 warrants and an intermediary received one-sixth of a warrant for each dollar of the loan facility loaned by a lender introduced by the intermediary to the company for a total of 633,333 warrants.

Uzbekistan production contract and LNG strategy

The company continues with final negotiations and approval of the definitive legal documents for a production redevelopment project to assume full operations of eight existing gas-condensate fields in Uzbekistan, along with two additional exploration blocks in the surrounding area. The intent is to optimize production and increase domestic gas supply by utilizing modern production technologies and techniques. Included with the eight producing gas fields are the associated gathering pipelines and gas treatment infrastructure.

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 to replace 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.

Turkey operations

Gas production for the second quarter of 2023 decreased 69 per cent to 9,007,000 cubic feet or an average of 99,000 cubic feet per day from 29,053,000 cubic feet or an average of 319,000 cubic feet per day for the second quarter of 2022. The Poyraz Ridge field has been producing for over five years with water production and natural pressure declines impeding gas production rates. Gas production during the second quarter of 2022 was also much higher due to the successfully drilled Poyraz 7 infill well that began producing in June, 2022, and has since naturally declined.

Posted Turkish gas prices for the second quarter of 2023 averaged $17.89 per thousand cubic feet as compared with $23.14 per thousand cubic feet in the second quarter of 2022, in Canadian dollar terms, but have decreased to $13.31 per thousand cubic feet as of Aug. 1, 2023.

The company is seeking a partner to finance development activities at the Yakamoz field, which is located two kilometres north of the existing Poyraz Ridge field and within the Poyraz Ridge operating licence. 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.

We seek Safe Harbor.