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Price Performance (1-year)
Financials (Year-End: Dec 31st)
In Q1-2025, nearly all of CDR’s output came from its Production Enhancement Contract (PEC) with the Government of Uzbekistan, which commenced in Q1-2024.
Q1 production, revenue, and EBITDA were in line with our estimates. Production was up 4% QoQ. Since assuming operations in Q1-2024, CDR has effectively stabilized production decline rates, which previously exceeded 20% p.a.
Revenue was up 6% QoQ, EBITDA was up 37% QoQ, and EPS improved from -$0.06 to -$0.001. EPS was 15% lower than our estimate due to higher amortization expenses. EBITDA and net margins improved significantly. Free cash flows turned positive
Debt-to-capital declined, moving closer to the sector average. Can raise up to $4M from in-the-money options and warrants
Company Updates
CDR is focused on three initiatives:
1) Uzbek Gas: Redeveloping natural gas projects in Uzbekistan,
2) Modular LNG: Developing Central Asia’s first LNG facility in Kazakhstan, and
3) Lithium Brine Exploration: Investigating lithium brine resources in
Planning a multi-well program this year
Development Plans: Uzbek Gas (proposed 2025 CAPEX: $30M, to be funded through operating cash flows) - CDR’s current production is 65,000 mcf/d. Through a combination of workovers, and new wells, the company aims to boost production to over 100,000 mcf/day across 120 wells (total CAPEX - $80M+). Q1-2025 production was up 4% QoQ, primarily driven by new production from a previously unproductive well. The company has identified at least five additional wells with a similar profile that can be brought into production. In 2025, CDR plans to drill a vertical, horizontal, and multi-lateral well. If successful, this could yield over 15,000 mcf/d of new production.
Development Plans: Kazak LNG (proposed 2025 CAPEX: $25M) - CDR intends to roll out a series of modular LNG facilities in a phased development approach. When fully operational, these facilities will produce up to 600 Kt of LNG annually, potentially displacing 680 Kt of diesel fuel.
Earlier this month, CDR purchased its first modular LNG facility for $9.3M (to be paid in stages), capable of producing 66M liters (30 Kt) per year. Operations are scheduled to begin in Q2-2026. The total estimated CAPEX for the facility is $36M, including $9.3M for the modular facility, and $26.7M for construction and commissioning. Condor has already secured various natural gas supply agreements, which will be used as feedstock to produce LNG.
Development Plans: Kazak Lithium (proposed 2025 CAPEX: n/a) - CDR is collecting and evaluating historical data, with no firm plans to drill any wells this year. We note that delineating a lithium resource is a faster and cheaper process vs mainstream metals such as gold and copper.
FRC Projections and Valuation
As Q1 was largely in line with our expectations, we are not making any major changes to our full-year estimates
However, we are raising our amortization expenses, and lowering our 2025 EPS estimate from $0.07 to $0.06
We are revising our valuation from $3.33 to $3.27/share, reflecting a slightly higher near-term CAPEX budget than previously estimated
We are reiterating our BUY rating, and adjusting our fair value estimate from $3.33 to $3.27/share. Q1 results aligned with our expectations, with improvements in production, EBITDA, and free cash flow, despite a slight miss on EPS due to higher amortization. The company's multi-well program, and the upcoming LNG facility, are key developments that could greatly enhance production capacity in the near future. We continue to believe the market has yet to recognize the potential of CDR’s LNG initiative.
Risks
We believe the company is exposed to the following key risks (not exhaustive):
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