Reconnaissance Energy Africa Ltd (RECAF)

[tdbowieknife]

Two to four more weeks... They sure missed that earlier mark of drilling first Q.

During drilling, ReconAfrica’s share price boomed. Following the conclusion of the second well last year, though, investors have been left wanting more.

“We’ve almost completed our second phase of seismic,” Andersen said. “We’ve got a lot of things to choose from.”

It plans to drill three or four wells this year. Three of the wells will be based on the seismic shoot. The presentation highlighted four prospects, numbered 33, 32, 23 and 2-7.

“We’re also looking at drilling a sidetrack off the 6-2 well we drilled last year,” Andersen said.

Since ReconAfrica’s successes last year, Shell and TotalEnergies have drilled two seemingly major discoveries offshore the country.

“Namibia is the most exciting place on the planet for exploration,” the company official told conference attendees. ReconAfrica hopes to “replicate the success [of Shell and Total] onshore. Onshore has a shorter cycle time, it’s more scalable, it’s lower cost to first development. It’s different but we believe equally exciting.”

Finding support
For the time being, ReconAfrica is content to finance its own way. It has about $75mn in cash, with Andersen putting well costs at $10mn.

Furthermore, should the wells be successful, warrants could be exercised providing “anywhere from $70 to $140mn”, he said .In the longer term, though, it will bring in a partner. The company aims to open a data room this year. It has been in “preliminary talks” with potential partners.

“It’s a matter of getting the data together. It’s better to have two or three phases of seismic, with four or five wells, then the two wells and seismic we have so far,” Andersen said.

“If we continue to have success we’ll be looking at a partnership process around the fourth quarter,” he continued.

Total and Shell will return to appraise their wells in the second half of the year, setting the stage for Namibia to climb the world rankings.

Along the way, there may be challenges. Some local environmentalists have opposed ReconAfrica’s activities. Activists outside the summit named the company, among some others.

Andersen said there was a “small minority” opposed to the company’s activities. “There’s a lot of enthusiasm and hope that a progressive hydrocarbon industry can bring all the benefits that the developed world experiences,” he said.

Furthermore, success will bring new challenges for the administration. A number of companies are now expressing interest in Namibia. “More activity brings more challenges with government having to staff up”, he said.

https://www.energyvoice.com/oilandgas/africa/ep-africa/413373/namibia-reconafrica-zimbabwe-invictus/