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Reconnaissance Energy (Africa) Ltd V.RECO

Alternate Symbol(s):  RECAF | V.RECO.WT | RCNWF

Reconnaissance Energy Africa Ltd. is a Canada-based oil and gas company. The Company is engaged in the exploration of the Damara Fold Belt and Kavango Rift Basin in the Kalahari Desert of northeastern Namibia and northwestern Botswana. The Company holds interest in a petroleum exploration license no. 0073 (PEL 73) in northeast Namibia and an interest in petroleum exploration rights in northwest Botswana over the Kavango Sedimentary Basin. The Company's exploration license covers an area of approximately 25,341.33 square kilometers (km2) (6.3 million acres) of oil and/or gas exploration properties comprising Blocks 1719, 1720, 1721, 1819, 1820 and 1821 situated in the Kavango Basin of northeast Namibia (the Namibia Licensed Property) and approximately 7,592 km2 (1.88 million acres) in Botswana (the Botswana Licensed Property). The two licenses together comprise over 32,933 km2 (8 million acres).


TSXV:RECO - Post by User

Comment by ClaySRFon Jul 12, 2021 10:27am
465 Views
Post# 33529458

RE:RE:RE:RE:To value RECO: calculate $ 6/barrel (how many barrels???)

RE:RE:RE:RE:To value RECO: calculate $ 6/barrel (how many barrels???)I've been reading all the evaluations posted here. I'm a Petroleum Engineer with 45 years experience primarily in operations of drilling and production worldwide but have a lot of experience in reserve evaluations. What's being missed is this: assume there are only 50 Billion barrels found in place (OOIP) and a recovery factor of 40% yielding 20 Billion Barrels of recoverable oil which is huge. But it takes years to fully develop the infrastructure for that size operations and even if in 5 years the daily oil production is 1 Million Barrels per day - that takes some 50 years to produce the 20 B barrels of oil. Present Value Discounted kills any cash flow of 20 years out. It's still a huge deal and the stock price will do great but it will take diluting the ownership percentage to get big companies like Exxon to farm out to drill wells and exploit the field. I am long on reco - got 2,500 shares at about $2.50 and another 2,500 shares 100-300 at a time so my average cost is about $3.75/share. And the first wells are just for testing: as a young drilling engineer in the early 1980's we drilled 3 wells in the south china sea at a cost of some $35 Million each ($100mm in today's $) and plugged each one even though they tested over 10,000 BCPD and 100 MMCFDG because more reseves were needed to justify pipelines and offshore facilities. Granted the reco wells are onshore but it will take a few Billion+ $ to drill and install the infrastructure needed - ergo the project needs the Exxon's of the world to participate. Think Aramco: started some  60 years ago and is a going concern - that's the future for reco if the project pans out. 
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