I posted this last night on the RECAF discord, and a couple of people suggested posting it here. Do your own DD and then do some more, this is not financial advice, etc and so forth.
I’ve been invested since spring 21 and along the way have found myself again and again telling friends and family a version of this story — and I wonder if there’s not an evocative and inspiring storytelling aspect to this play that we sometimes forget, take for granted or get too close to fully appreciate. Maybe it’s helpful from time to time to hear a version of it told in layman’s terms.
What if I told you that a small group of esteemed career oil and gas professionals — deeply pedigreed guys with decades of experience at the top of their fields — had coalesced around a virgin oil field in one of the most remote corners of the world, in a country second only to Mongolia for lack of population density, a place that wasn’t even a country until the early 1990. Most people couldn’t place it on a blank map. It is here, in northeast Namibia, as invited guests of a stable democracy that leads the continent of Africa on issues like press freedom, that this company may well have discovered an unexplored oil basin on the scale of those in South Texas or the Zagros Thrust of the Persian Gulf. The company—incorporated in Canada, with national subsidiaries in Namibia and Botswana (where a substantial portion of the post happens to be)—has moved in lockstep with thus far with the stable Namibian government as partners to prove out the play, developing ESG as a bedrock of their corporate structure and using state of the art technology to prove the impossible: a vast new source of clean, conflict free oil. Not one single 20th century pipe or pump can be found here, in a nation that has never before produced a barrel of oil.
Over the last year progress has been significant: “derisking” is the term used in the industry. The company’s lease is 8.5 million acres, roughly the size of Switzerland. Early “wildcat” drill sites made for promising returns (in layman’s terms), and the promising area around these sites have now been much better defined using non-invasive environmentally mindful seismic data gathering. A national wealth fund has been established by the government of Namibia in anticipation of what come next, and leading government figures up to and including the president regularly speak out in support of the discovery. Early overtures to major investors, including Goldman Sachs, are underway, and there has been “unsolicited interest” in joint venture agreements from third party oil and gas companies. Uplisting from the TSXV exchange is “imminent”, according to recent coverage from Haywood Securities—this is a critical facet of attracting larger investors in the months to come. And the company has successfully taken their find on the road to the biggest oil and gas conferences in the world over the last 18 months, publicly exposed to scrutiny and due discourse.
Right now RECAF is perhaps on the cusp of proving out the greatest onshore oil discovery of the 21st century. If this play were anywhere else on earth we’d have drilled it dry decades ago—it is only because of history, geography, and geopolitical quirk that it remained undiscovered until now, hidden away in a remote corner of Africa where the locals report gas seeping out of the sand like spirits, the same as way indigenous peoples did in the Texas and Oklahoma oil fields a hundred years ago.
At the same time there are market forces at play. Before initial positive results were announced, the company was targeted by short sellers at a notorious Canadian hedge fund, currently under investigation in multiple jurisdictions. When the first round of good news was announced the fund found itself trapped by price action — and now they’ve spent a year desperately manipulating that price back towards their initial short price, employing onerous, felonious besmirchers to do their dirty work, spreading bullshit and lies to tear down RECAF and taking advantage of an exchange that appears to be badly in need of oversight. In that same time the global need for oil has exploded, setting up a macro environment few investors would have dreamed of when they first discovered thr stock — I know it was the last thing from my mind in early 21. I had to convince friends a year ago that oil would matter first and foremost to name them understand the promise of RECAF. I don’t have to convince them anymore.
These competing forces — the generational oil exploration discovery and the desperate, trapped hedge fund — are hurtling towards each other at an incredible speed, essentially playing a many multi-million dollar game of chicken in real time on the TSXv. Investors who believe in the play, in the promise and the possibility and the geology and the expertise, have what might very well be a once in a lifetime chance to get in early on the last great onshore oil play on this known planet.
It takes guts and gumption, research and humility, and a willingness to learn from the extraordinary community that has coalesced around this play to really understand the possibilities. It also requires understanding and ignoring the most wild psychological warfare and flailing bullshit FUD spewed nonstop by the trapped fund and their lackeys, whose opprobrium is presently oozing out of every message board and comments section.
But the play is real, the geology is real and the expertise is real. How much oil, we don’t know and when we’ll find out is anyone’s guess, but the drill is turning again now after a long permitting process, and we are presently waiting on results from the first seismic well. It is a scary and exciting moment. But more than any shitcoin, more than any shotgun junior miner or NFT puss monkey or whatever other thing people are hoping and praying their money against in 2022, RECAF echoes back to one of the oldest, earliest forms of the stock market, a pure resource play: prove that you’ve discovered oil, and the price goes up. It’s a very old sort of magic and science, a market response amalgamation of the two. And when it happens, well…science is part of it, the market is part of it, brilliant rock nerd geology is a huge part of it, but there is also the not insignificant matter of belief.
Throughout human history and the history of markets, the same thing has happened again and again to early believers when the truth at last arrives, and it turns out they were right.