CALGARY,
AB, July 30, 2024 /CNW/ - Reconnaissance
Energy Africa Ltd. (the "Company" or "ReconAfrica") (TSXV: RECO)
(OTCQX: RECAF) (Frankfurt: 0XD)
announces the filing of annual disclosure documents for the year
ended March 31, 2024, including
audited annual consolidated financial statements, management's
discussion and analysis ("MD&A"), annual information form
("AIF"), annual statement of reserves data and other oil and gas
information under National Instrument 51-101 ("NI 51-101 Report")
and estimates of prospective resources to the Reconnaissance Energy
Africa Ltd. interest in certain prospects and leads located in
Petroleum Exploration Licence 73 ("PEL 73"), Kavango Basin,
Namibia as of March 31, 2024 (the "NSAI Report").
ANNUAL HIGHLIGHTS
Corporate
- Sold Renaissance Oil Corporation, holder of the Mexican assets,
for gross proceeds of approximately C$10.3
million (US$7.5 million), and
discharged approximately C$100
million of related liabilities.
- Granted approval for the Second Renewal Exploration Period by
the Ministry of Mines and Energy ("MME") in Namibia, covering the period from January 30, 2024 to January 29, 2026.
- Handed over an additional 10 solar powered community water
wells drilled and completed by the Company to the Ministry of
Agriculture, Water and Land Reform ("MAWLR"), in Namibia, bringing the total number of 36 water
wells handed over to date.
- Increased technical capabilities of the Company by hiring
Chris Sembritzky as Senior Vice
President of Exploration and a team of former Anadarko Petroleum
explorationists.
- Enhanced internal controls and legal capabilities by hiring
Adam Rubin as General Counsel,
reducing third party legal expenses.
- Increased governance structure at the Board of Directors level,
adding the Honourable Diana McQueen ECA, ICD.D as Chair of the
Board of Directors, the appointment of D. Jeffrey Harder, FCPA, FCA, FCBV, ICD.D as a new
independent director and Chair of the Audit Committee and the
appointment of Iman Hill as a new independent director.
- Streamlined organization and relocated head office to
Calgary, reducing G&A.
Operational
- Completed the acquisition of enhanced full tensor gravity
surveys totaling over 5,000 km2 and phase 2 extension of
the 2D seismic program bringing the total acquired 2D seismic to
2,767 km.
- Received an Environmental Clearance Certificate ("ECC"), from
the Environmental Commissioner, Ministry of the Environment,
Forestry and Tourism, covering PEL 73, for the drilling of 12
exploration and appraisal wells.
- Completed the technical evaluation of the entire exploration
inventory to understand the potential of the Damara Fold Belt and
Kavango Rift Basin plays.
- Re-opened the virtual data room which included a comprehensive
assessment of the entire exploration inventory, including drill
ready prospects and an integration of that work into the farm out
joint venture process.
- Selected the first two drilling locations and began the process
required for well site preparation and procurement for
operations.
- Spud the Naingopo exploration well in the Damara Fold Belt on
July 7, 2024. The Naingopo well is
targeting 181 million barrels of unrisked prospective oil resources
on a 100% working interest basis, based on the NSAI
Report(1).
- Civil works associated with Prospect P continue, including
debushing, demining and road construction activities. Prospect P is
expected to spud in the fourth quarter of 2024, following the
completion of the Naingopo exploration well.
- NSAI Report highlighting over 19.6 billion barrels of
undiscovered original oil-in-place, consisting of 3.4 billion
barrels of unrisked prospective oil resources in the Damara Fold
Belt basin from 19 prospects on a 100% working interest basis and
0.5 billion barrels of unrisked prospective oil resources in the
Kavango Rift Basin from 6 prospects on a 100% working interest
basis (1).
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(1)
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There is no certainty
that any portion of the resources will be discovered. If
discovered, there is no certainty that it will be commercially
viable to produce any portion of the resources. Prospective
resources are those quantities of oil estimated, as of a given
date, to be potentially recoverable from undiscovered accumulations
by application of future development projects. Prospective
resources have both an associated chance of discovery and a chance
of development. For the purposes of the NSAI Report, the volumes
and parameters are associated with the best estimate scenario of
prospective resources. Prospective resources are the arithmetic sum
of multiple probability distributions. Unrisked prospective
resources are estimates of the volumes that could reasonably be
expected to be recovered in the event of the discovery and
development of these prospects.
|
Financial
- Raised gross proceeds of C$8.7
million from equity offerings in 2023.
- Raised gross proceeds of C$17.3
million via bought deal public offering in April 2024.
- Announced an underwritten public offering of C$35.0 million in July
2024.
- Entered into a memorandum of understanding ("MOU") with BW
Energy Limited ("BW Energy") (OSE:BWE), for a 20% working interest
in PEL 73, including a US$16 million
(C$22 million), equity investment to
support a multi-well exploration program, and additional contingent
payments of up to US$125 million
(C$171 million), based on certain
development, production and cash flow milestones. Total potential
exposure of the deal is US$141
million (C$193 million).
- Net income of C$41 million,
C$0.20 per share, for the year ended
March 31, 2024, driven by the sale of
Renaissance Oil Corporation in the fourth quarter of 2023.
Brian Reinsborough,
President and CEO of the Company stated: "2023 marked a
turning point for ReconAfrica. Since I joined the Company a year
ago, we have delivered on several major strategic objectives that I
set out last fall. One of those objectives was to generate a
portfolio of high impact drill ready prospects. This goal was
achieved and has led us to the recent spud of the highly
anticipated Naingopo exploration well, the first well in our
multi-well exploration to test the Damara Fold Belt. Operationally,
the well is drilling as expected with results anticipated in
October. We recently executed a MOU from our farm-out joint venture
process with BW Energy. The MOU provided for BW Energy to make a
strategic equity investment into ReconAfrica for US$16 million while also investing directly at
the asset level, with a 20% working interest in PEL 73 in exchange
for US$125 million in payments based
on achieving certain milestones with respect to commerciality,
first production and cash flow milestones. This transaction
maximizes cash up front for exploration drilling and provides
significant cash for development expenditures on success, while
still retaining a high level of working interest for ReconAfrica
and its shareholders. Our financing strategy has been executed as
planned with two successful equity financings undertaken in 2024
positioning us to execute our fully funded planned exploration
program. We streamlined our portfolio with the sale of the Mexican
assets and are now positioned as an onshore pure play in
West Africa. Additionally, we have
executed on some of our corporate objectives by streamlining our
organization to be fit for purpose and we have welcomed new members
to the Board of Directors who add a more diversified skill and
competency set. Overall, I am very pleased with the performance of
the Company over the past 12 months."
FILING UPDATE
The Company has filed its annual audited consolidated financial
statements, MD&A, AIF, and NI 51-101 Report for the year ended
March 31, 2024, as well as estimates
of prospective resources to the Reconnaissance Energy Africa Ltd.
interest in certain prospects and leads located in PEL 73, Kavango
Basin, Namibia as of March 31, 2024, available on SEDAR+ at
www.sedarplus.ca.
About ReconAfrica
ReconAfrica is a Canadian oil and gas company engaged in the
exploration of the Damara Fold Belt and Kavango Rift Basin in the
Kalahari Desert of northeastern Namibia and northwestern Botswana, where the Company holds petroleum
licences comprising ~8 million contiguous acres. In all aspects of
its operations ReconAfrica is committed to minimal disturbance of
habitat in line with international standards and will implement
environmental and social best practices in all of its project
areas.
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this
release.
Cautionary Note Regarding Forward-Looking Statements:
Certain statements contained in this press release constitute
forward-looking information under applicable Canadian, United States and other applicable securities
laws, rules and regulations, including, without limitation,
statements with respect to enhanced internal controls, reducing
third party legal fees, the drilling of 12 exploration and
appraisal wells, the potential of the Damara Fold Belt and Kavango
Rift Basin plays, estimates of unrisked prospective oil resources,
the timing of the spud of Prospect P, estimates contained in the NI
51-101 Report, estimates of original oil-in-place, completion of
the underwritten financing announced in July
2024, completion of the MOU with BW Energy, the Company's
commitment to minimal disturbance of habitat, in line with best
international standards and its implementation of environmental and
social best practices in all of its project areas. These statements
relate to future events or future performance. The use of any of
the words "could", "intend", "expect", "believe", "will",
"projected", "estimated" and similar expressions and statements
relating to matters that are not historical facts are intended to
identify forward-looking information and are based on ReconAfrica's
current belief or assumptions as to the outcome and timing of such
future events. There can be no assurance that such statements will
prove to be accurate, as the Company's actual results and future
events could differ materially from those anticipated in these
forward-looking statements as a result of the factors discussed in
the "Risk Factors" section in the Company's annual information form
dated July 29, 2024, available under
the Company's profile at www.sedarplus.ca. Actual future
results may differ materially. Various assumptions or factors are
typically applied in drawing conclusions or making the forecasts or
projections set out in forward-looking information. Those
assumptions and factors are based on information currently
available to ReconAfrica. The forward-looking information contained
in this release is made as of the date hereof and ReconAfrica
undertakes no obligation to update or revise any forward-looking
information, whether as a result of new information, future events
or otherwise, except as required by applicable securities laws.
Because of the risks, uncertainties and assumptions contained
herein, investors should not place undue reliance on
forward-looking information. The foregoing statements expressly
qualify any forward-looking information contained herein.
Disclosure of Oil and Gas Information:
The report of Netherland, Sewell & Associates, Inc.
("NSAI") entitled "Estimates of Prospective Resources to the
Reconnaissance Energy Africa Ltd. Interest in Certain Prospects and
Leads located in PEL 73, Kavango Basin, Namibia as of March 31,
2024" (the "NSAI Report") and the prospective resource
estimates contained therein and in this press release were prepared
by NSAI, an independent qualified reserves evaluator, with an
effective date of March 31, 2024. The
NSAI Report was prepared in accordance with the definitions and
guidelines of the Canadian Oil and Gas Evaluation Handbook prepared
jointly by the Society of Petroleum and Engineers (Calgary Chapter)
(the "COGE Handbook") and the Canadian Institute of Mining,
Metallurgy & Petroleum and National Instrument 51-101 –
Standards of Disclosure for Oil and Gas Activities ("NI 51-101").
For additional information concerning the risks and the level of
uncertainty associated with recovery of the prospective resources
detailed herein and in the NSAI Report, the significant positive
and negative factors relevant to the prospective resources
estimates detailed herein and in the NSAI Report and a description
of the project to which the prospective resources estimates
detailed herein and in the NSAI Report applies are contained within
the NSAI Report, a copy of which has been filed with the Canadian
Securities Administrators and is available under the Company's
issued profile on SEDAR+ at www.sedarplus.ca.
The prospective resources shown in the NSAI Report have been
estimated using probabilistic methods and are dependent on a
petroleum discovery being made. If a discovery is made and
development is undertaken, the probability that the recoverable
volumes will equal or exceed the unrisked estimated amounts is 90
percent for the low estimate, 50 percent for the best estimate, and
10 percent for the high estimate. Low estimate and high estimate
prospective resources have not been included in the NSAI Report.
For the purposes of the NSAI Report, the volumes and parameters
associated with the best estimate scenario of prospective resources
are referred to as 2U. The 2U prospective resources have been
aggregated beyond the prospect and lead level by arithmetic
summation; therefore, these totals do not include the portfolio
effect that might result from statistical aggregation. Statistical
principles indicate that the arithmetic sums of multiple estimates
may be misleading as to the volumes that may actually be
recovered.
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SOURCE Reconnaissance Energy Africa Ltd.