ReconAfrica, a junior oil and gas exploration and development company, has begun drilling in the Kavango basin, located along the west coast of Africa. Owning 8.5 million acres within the region, the company has sole access to what one analyst predicts may generate up to 120 billion barrels of oil.
“Given the nature of this basin and the tremendous thickness, this is pretty much a no-brainer… it will be productive and I’m expecting high-quality oil,” said Dan Jarvie, a geochemist with Worldwide Geochemistry, LLC, in a press release.
With initial drilling phases underway, investors are now able to capitalize on this opportunity. Haywood Securities rated the company a BUY with a price target of $3.15 USD.
Wood Mackenzie, one of the world's leading natural resources research and consulting firms, has released a report comparing the Kavango basin to three similar world-class basins, particularly to that of the sizable Midland-Permian basin in Texas.
Knowing that many parts of the world have been thoroughly picked over in the pursuit of conventional oil production, some may wonder, will Africa’s Kavango basin be the final frontier?
ReconAfrica, an early mover in the vast Kavango basin
Bill Cathey, president and chief geoscientist at Earthfield Technology, was brought on to the project in 2014.
“Nowhere in the world is there a sedimentary basin this deep that does not produce commercial hydrocarbons,” Cathey said in a press release, addressing the likelihood of this basin being rich with viable product.
Holding sole rights to this lucrative basin, ReconAfrica is positioned at the forefront of perhaps the final frontier of oil exploration. The company’s strong relationship with local governments and extensive research into the viability of the basin enhance the predicted profitability of the project.
Sole rights to the region
ReconAfrica first acquired rights to 6.3 million acres in northeast Namibia, later purchasing an additional 2.45 million acres in northwest Botswana. They recently gave back more than 0.2 million acres to the government to protect pertinent UNESCO cultural and historical sites.
The company’s land package still covers nearly the entire Kavango basin, almost the size of Switzerland.
This allows ReconAfrica to avoid the challenges that commonly ensue when two powerhouses are producing within the same basin.
Furthermore, as the Kavango basin deepens to the east, ReconAfrica seeks to identify thicker, thermally mature marine Permian source rock where much of the petroleum generated has migrated to more shallow conventional traps.
World-class management and technical team discovering deposits
Since its inception in 2013, ReconAfrica has been diligently exploring the Kavango basin in preparation for this work, conducted with the use of world-class teams and equipment.
“We’ve been in business since 1987, and since that time we’ve analyzed data from virtually every sedimentary basin in the world from every large, independent, and major oil exploration company,” said Cathey in a press release. “We analyzed a portion of that data over NE Namibia. The data is some of the best data that we’ve ever had a chance to work with within our 35 years in existence. We analyzed it using our proprietary depth calculation software to determine areas where deep sedimentary basins haven’t been discovered yet.”
ReconAfrica has launched its initial exploration phase, drilling three wells to kick off the operation. The company’s initial goal is to establish the presence of an active petroleum system with its fully funded three-well drilling program which just started in early Jan., 2021.
“We expect to confirm the existence of a working hydrocarbon system. The sky's the limit for this company if we do that,” commented Jay Park, chairman of Reconnaissance Energy Africa.
Namibia and Botswana offer safety and stability, company says
Boasting solid infrastructures and pro-business democratic governments, Namibia and Botswana are an investor’s dream.
According to Park, Namibia is interested in development. “Its history includes a lot of mining activities, so they understand resource plays and they’re now seeking to establish in Namibia the kind of oil and gas they’re seeing being developed in Angola in the north.”
ReconAfrican has developed a strong relationship with the two countries by strongly adhering to the local rule of law and developing employment opportunities. The company is actively engaged with local communities, providing strong hiring and training policies while strictly adhering to regulations and environmental best practices.
The mutually beneficial relationship between ReconAfrica and Namibia and Botswana is creating opportunities for all parties. The publicly traded company hopes to attract investors looking for a resource play with the potential for a significant upside.
https://www.usatoday.com/story/sponsor-story/imperium-group/2021/02/05/reconafrica-begins-drilling-oil-along-west-coast-africa/4379817001/
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