Bullboard - Stock Discussion Forum 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... see more

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TSXV:RECO - Post Discussion

Reconnaissance Energy (Africa) Ltd > Perspective

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Post by LongHaulOil on Nov 21, 2021 2:25am

Perspective

First, perspective on the potential for Recon's land holdings. Based on a rough estimate of the length of the seismic lines, the area surveyed is at most approximately 8000 square kilometres (roughly 100km x 80 kms). This equates to around 197,000 acres or roughly 1/40th, or 2.5% of Recon's land holdings of 8.5 million acres. The drilling and seismic to date have been confined to only one of the sub-basins. Already on a very preliminary basis we have heard talk of "oil shows", a "working petroleum system", "conventional reservoirs", and "traps". Not to mention Dan Jarvie's hints at the potential for oil reseves that would rival that any oil field yet discovered in the world.

Secondly , almost all of the management team are in a mature stage of their careers, and there is no way they would, as a cohesive group, jeopardize all they have achieved. Dan Jarvie in particular worked for EOG Resources, a sucessor company to Enron. It is inconceivable that Dan, or any of the others for that matter, who worked in the industry during the time of the fallout from the Enron fraud, would use the language they have, without first considering the import of their words. There is just no way they would say anything that would expose them to the "real" risk of shareholder lawsuits or regulatory investigation. I use the term real in quotations because although there is nothing to stop anyone from filing suit against the company, whether any of them have any "real" merit or any "real" chance of success is very much in doubt. To date I am not aware of any walk back from any of the language used in any news release from the company. They meant what they said, and are confident enough to use the language they have.

Finally, nothing much is said any more about the Botswana holdings, which if I'm correct, represent the deepest part of the basin. However, I for one, am tempted to follow the money in this case, that being Ian Telfer. He is one of the top mining executives in Canada, a former Chairman of Goldcorp, and was a significant shareholder in Rennaisance Oil before it was folded into Reco Africa. I can't imagine him rolling his shares over in silence to Recon unless he recognized the value of the bigger play.

To those shorting and talking the stock down, I only see short term gain, which admitedly may be the goal, albeit at considerable risk of more positive news coming out at any time. In the short term, a depressed stock price serves only to thwart capital raises by the company, which aren't needed anyway, or to produce an artificially low base upon which a takeover could be launched promising a hefty premium over a depressed stock price. I see this as one of the greatest risks at this point to the longs, but a huge risk to the shorts.

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