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Reconnaissance Energy (Africa) Ltd V.RECO

Alternate Symbol(s):  RECAF

Reconnaissance Energy Africa Ltd. is a Canada-based oil and gas company. The Company is engaged in the opening of Kavango Sedimentary Basin in the Kalahari Desert of northeastern Namibia and northwestern Botswana. It holds 90% interest in a petroleum exploration license in northeast Namibia and a 100% interest in petroleum exploration rights in northwest Botswana over the entire Kavango Sedimentary Basin. The Company's exploration license covers an area of approximately 25,341.33 square kilometers (6.3 million acres) and 8,990 km2 (2.2 million acres) in Botswana. The two licenses together comprise 34,325 sq km (8.5 million acres). Its conventional drilling program is focused on analyzing the rocks to determine if there is a working petroleum system in the Kavango Basin.


TSXV:RECO - Post by User

Comment by Luckboxxon Feb 07, 2022 10:34am
268 Views
Post# 34404573

RE:RE:RE:RE:New deal with Namibia is good news

RE:RE:RE:RE:New deal with Namibia is good newsThe value of the newly acquired 5% will go up with drill bit success, JV deals, and the 3rd party resource report.  I assume RECO has high confidence this will happen.  They can farm out the 5% for a profit later this year.  Also, I highly doubt NAMCOR would be able to fund the 10% carry costs on the intitial basin development which is how oil JVs operate.  NAMCOR has probably realized this since Namibia is currently poor.  NAMCOR likely expecting its RECO stake to increase in the near future so they can sell later this year to fund its 5% of initial costs.  I am speculating on the timing of course which may happen later.  Eventually with enough wells, the basin production will become self-sustaining with some downstream assets in place (transportation, storage, etc.).  This deal will look a lot better to all later this year with more holes and JV deals.  The big thing right now is that this completely takes the legs out of the climate NGOs and their media strategy.
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