Reconnaissance Energy (Africa) Ltd V.RECO

Economic Viability of Kavango Project

[fredo1]

I have posted elsewhere that this project is not economically viable at current (then $44) oil prices IF horizonal drilling is required. Management has now said pubically that no horizontal completions are being contemplated. I take this as an admission that only vertical wells will be economic and even then flow rates and EUR's per well need to be healthy. Of course, all of this is moot at $65 or better oil price.

[madmax69]

You're partially correct...but it is a moot point nonetheless. Thanks

[C6J6Dub6U]

First. LOL! you wrote "pubically" instead of "publically" Second. YES! Please everyone start panick selling immediately! Just like what... 2 days ago? Yes I bought on some peoples lows cheap. So please listen to me. Run away and sell those stocks QUICK! GLTA

[madmax69]

The only people panicking right now are the shorters of which there are many: https://shortdata.ca/stock/RECO.V/

[fredo1]

Now, now. Don't be mean. Publically was pretty funny, but hey, I'm old. Not short, bot at$1.50, $1.30 ish and $1.16 on the way down. 

[Ebenizer3]

https://www.investopedia.com/articles/active-trading/051215/cost-shale-oil-versus-conventional-oil.asp. before u talk ur self into dumping ur shares before they spud #1.

[fredo1]

Thanks. I'll look at the link. I'm not selling. I would buy this even if oil were $30. 

[NameOfTheGame]

Petroleum Engineer here. How are you coming to the conclusion that horizontally drilled wells would be less economic that vertical? To make the determination on the economic viability of drilling horizontal into a formation, you would need to know critical factors such as how tight the organics are, oil viscosity, permeability, porosity, water saturation. More detailed calculations regarging OOIP,

[fredo1]

Everything yousay is correct. But, take a look at location. I think you will come to the same conclusion. Also, management has stated that they are not contemplating horizontal completions. Certainly, this view does not apply over the long term if, for example a pipeline is built, then the economics change drastically.

[scatman]

Can you provide your cost assumptions and how you calculate the netback. I can't figure out how you can make such a statement. Assume $45 Brent?

[NameOfTheGame]

Respectively, the OP statement is nonsense. Horizontally drilled wells by their very nature have greater inflow production then vertical wells. Yes they cost more, but those costs have reduced over time and are usually offset by drastically higher production rates over the economic life of the well. Again, not enough information for any of us to have anything more than "objectively high

[GorgeousGeorge1]

@Nameofthegame while you're on here, would you mind sharing your thoughts on probabilities of success drilling for source rock vs hitting flowing oil? I've been in oil plays before and seen probabilities thrown around, but I've never been in one targeting source rock. I'd assume this gives a greater chance of success in the upcoming 3 drills and then upon finding source rock, the

[Hiddensecrets]

It is my thinking exactly.    RECO.V is drilling to confirm a Petreloem System in Place with source rocks.  In Q2-2021 discussions begin with major players and they put up the big money for drilling the reservoirs.  So yes, common logic dictates that we are in a SAFE INVESTMENT period for the 3 holes.  We have three worldwide specialists whom agree on basin: (a) Spoule

[fredo1]

Need both source rock and hydrogen content. If present, I believe Recon will drill a few wells on their own after running the seismic survey. There is risk in each of those assumptions. Hard to reduce to probabilities. So, yes and no on the transfer of risk to farm-in partners.

[GorgeousGeorge1]

Thanks, yes understood. It's a unique value/risk proposition, unlike anything I've ever been involved with previously. Hard to get my head around drilling for source rock with the intention of farm outs as opposed to the standard risk v reward of exploratory drilling for reservoirs. Feels like we've got more scope to succeed in the upcoming drill but really, it's just as binary

[fredo1]

It is binary but the odds of finding source rock are a lot higher than drilling a producing well.

[TurnToTheRight]

Can someone please explain to me why there is so much emphasis on the delineation between drilling and logging source rock compared to drilling and logging the reservoir? I'm an engineer that has worked in the oil and gas industry (oil sands, unconventional shale, WCSB conventional) and source rock is simply where the diagenesis occurs. All we care about is the reservoir, and depending on the

[GorgeousGeorge1]

Well as an investor I'm trying to quantify risk as best I can, and more specifically what the market will deem as successful in the upcoming drill. I think it's important to highlight what the drill aims to achieve; that is to prove the presence of a petroleum system in the basin by finding source rock, and more importantly that it isn't to test the commercial viability of a reservoir.

[Elephants]

Good post, couldn't agree more. Controlling the basin adds additional value. Because of the basin shape and the rift system, if there is a petroleum kitchen, finding producing wells with just be a matter of time.

[TurnToTheRight]

But that is exactly my point, just because there is a "petroleum kitchen" does not mean that there is necessarily a producable reservoir that currently exists - which in a conventional reservoir is contingent on the presence of "traps" with very minimal permiability (shale or salt would be the most common). Source rock is worthless unless there is oil associated with it

[Ebenizer3]

really, with all the info on reco website along with interviews with jarvie,cathey,steinsberger. For an engineer ur not very curious. I suggest the presentation in Houston it's on the website. Good luck

[Ebenizer3]

also interviews with CEO Evan's, founder steinke and cob park . didn't mean to leave them out.

[Letsmake1]

Hey Tehran Don't you just love these newbies...joined Dec 19th...only posts are about RECO and claims of all things he/she is an engineer There is more info on RECO site than any investor could ever hope for At least you have to give the new wave of shorts/bashers credit they at lease take a shot at trying to be credible...LOL GO RECO GO!!!

[investor55x]

I've noticed that too ("...joined Dec 19th...only posts are about RECO and claims of all things he/she is an engineer). And because of his questions I very much doubt that he's an engineer, because there is so much technical and other information available on RECO's website. But to me it's a very good sign that new bashers / shorters have appeared here recently in this board

[TurnToTheRight]

What I asked was if there was a specific comment that management made to indicate that for some reason they were after infomation regarding the source rock specifically. Because based on the December 2020 Investor presentation, there is nothing in there specifically dientifying a plan to drill and log source rock. Slide 10 indicates that there are Permian source rock, indicating the geological

[Reconafrica]

maybe this will help https://oilprice.com/Interviews/The-Largest-Oil-Play-Of-The-Decade-Interview-With-Daniel-Jarvie.html

[Reconafrica]

I believe it's been stated repeatedly that the three initial wells are test wells, for the purpose of logging data, hence jarvies happiness about using water based drilling fluid. Thier initial goal is to fundamentally understand the geography of the basin. As jarvie says, without source rock all you have is a dry hole. They'd why they are targeting source rock. There's enough

[TurnToTheRight]

I understand exactly what Mr.Jarvie is saying, but what people on this board are conflating is that they are going to drill through and log the entire reservoir. As I stated earlier, that includes source rock and the trap, and is echoed Mr.Jarvies exact works.  After reading the board it was clear that posters were a little confused. RECO will be drilling and logging the entire reservoir

[Reconafrica]

well I'm glad thats settled. Let's leave jarvies job to him. I'm confident he knows what he's doing. Anyone that disagrees should contact the company for a job.

[crude]

Frequently Asked Questions: ReconAfrica Initial Drilling Project Who is ReconAfrica? ReconAfrica is an oil and gas company engaged in the exploration and development of oil and gas in NE Namibia and NW Botswana.  The company began work in Namibia in 2013, and has been diligently pursing the analysis and evaluation of PEL 73, in conjunction with our local partner Pioneer Energy. What is

[GoldenEra]

This post has been removed in accordance with Community Policy

[Ebenizer3]

100 billion bbls estimated in the shale is the easy answer. Am guessing u know how this all got started with the ST1 well drilled in 1964 where they cored 620ft of immature Permian aged shale, and they hypothesized that the Basin deepen to the east, and then they came across the aeromagnetic survey which shows a deeper basin. So they are expecting, hypothesizing 6000ft thick stacked play similar

[TurnToTheRight]

I'm not sure anyone would ever core right out of the SC shoe, not much to gain from that. Not to mention the amount of time that it would take to core pilot holes, prior to reaming the holes open to run intermediate casing string(s)... that's a lot to ask of a carrier mounted kelly drive rig. And I don't know of any producer that would drill a monobore exploration well.  Looks

[Letsmake1]

Do you own any shares of RECO? Or are you just here wasting our time with your gibberish?

[Ebenizer3]

I think the core's will be shipped back to Houston for analysis. With them running in and out of the hole every 30ft ,what kind of problems can we see. and they did upgrade rig with a top drive. Seems the biggest concern for this project is covid19. Hopefully there rig crew is locked in for the next 3months.

[teheran10]

Hahahah, yes, brand you bashers trying very hard to plant the seed of doubt in investors' minds. I do not care what they say, I have been with RECO for several months now and each day I am even more excited about the project.  Some here, or the insiders, will be billionaires, I will be just a very very very wealthy person if our predictions are correct. Yes and that 500,000 has been

[GorgeousGeorge1]

Absolutely agree on your point re stranded asset. The infrastructure build out would be enormous and will hit massive opposition from environmental groups. Nothing will be developed anywhere near the Okavanga delta, I've been there and camped on it for several days. That is a very important body of water to the surrounding ecology, not a chance they'll take on any risk of polluting it.

[fredo1]

Since current oil prices have shut down all but lowest cost drilling in the Permian where there is infrastructure in place, how can we not conclude that economics are poor in this brand new basin in the middle of nowhere with only truck and rail transportation options?  This is a long term play and will,if successful, hit its stride at higher oil price levels.