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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 TurnToTheRighton Oct 25, 2021 2:23pm
280 Views
Post# 34046217

RE:multi well drilling in Q1 2022

RE:multi well drilling in Q1 2022Patience Peterj99, patience. Although you want to bring in another rig, it just can't be justified. Firstly, RECO owns this rig (very unorthadox for an E&P company) but only becuase it was cheaper to buy and retrofit this rig than it was to mobilize an approporiate rig from north america - I recall that being adressed by management in a Q&A, saying that RECO got a quote from Precision Driling (Canadian rig contractor) and intercontinental mobilization was going to cost more than to purchase the rig they currently have. Buying a second rig cannot be justified at this time, and neither can contracting a second. But, a second rig is not needed. 

To drill one well from spud to TD at these depths, as well as any associated services that must be conducted with the rig still on the well, takes 1-2 weeks. Keep in mind that to ensure wellbore integrity, well control, and any data/measurement operations, drilling is slower than in the production phase of development. Reco doesn't need another rig, they can easily drill 12 wells next year, and that would be excruciatingly slow because rig moves would likley not take 2 weeks (just a guess, I have no idea how difficult rig moves are in Namibia). There is no urgency here because if there were urgency by RECO I would have some serious questions and likely would not be invested. This is the exploration phase, efficiency and well counts are not what's important, de-risking the play and identifying the best well locations for appraisal testing is the end goal. What may be lost on some (not a dig at anyone) is that RECO is a junior but is developing/de-risking this play like a major; it takes time, but it sure beats being a wildcatter blindly drilling and relying on hope and dumb luck.
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