ReconAfrica is preparing to drill its second exploration well in Namibia’s Kavango Basin in the coming months, backed by a new fundraising plan.
The company announced plans to raise C$10 million (US$7.3 million) through a share offering, disclosed after markets closed on the Toronto Stock Exchange.
ReconAfrica said it will direct most of the proceeds toward exploration, along with working capital and general expenses, with the offering expected to close around the week of June 16.
Following the dry Naingopo-1X well drilled earlier this year, ReconAfrica is now shifting focus to Kavango West-1X — described by CEO Brian Reinsborough as one of the company’s top prospects.
The company-owned Jarvie 1 rig is scheduled to arrive at the PEL 73 site by late June to prepare for drilling.
Crews are currently finalizing access roads and the well pad while ReconAfrica awaits final permit approvals.
Kavango West-1X will explore the Damara Fold Belt, a large play covering over 20 kilometers in length and five kilometers in width.
Drilling will target a thick carbonate reservoir in the Otavi formation, the main objective of the play.
The well is planned to reach a total depth of roughly 3800 meters.
ReconAfrica estimates the prospect could hold 346 million barrels of oil or 1.8 trillion cubic feet of gas on an unrisked basis.
The risked estimates suggest about 30 million barrels of oil and 133 billion cubic feet of gas.
So far, the company has identified 19 prospects and four leads in Namibia’s section of the Damara Fold Belt, which also stretches into Angola, where ReconAfrica seeks to expand.
BW Energy, a 20% stakeholder in PEL 73, plans to acquire around 20% of the new shares, potentially raising its stake in ReconAfrica from 6.5% to 7.6%, with a six-month lock-up period on the new stock.
source:upstreamonline.com
African Energy Council