Reconnaissance Energy Africa Ltd. (the “ Company ” or “ ReconAfrica ”) is pleased to announce that it has completed its previously announced and upsized underwritten public offering (the “ Offering ”) of units of the Company (the “ Units ”) at a price of C$0.50 per Unit, including the full exercise of the over-allotment option, for aggregate gross proceeds of approximately C$19 million.
The Offering was led by Research Capital Corporation as the lead underwriter and sole bookrunner, on behalf of a syndicate of underwriters, including Canaccord Genuity Corp. and Haywood Securities Inc. (collectively, the “ Underwriters ”).
BW Energy Limited (“ BW Energy ”) (OSE: BWE), directors and management of ReconAfrica and certain other investors, participated in the Offering for approximately C$4.7 million. The Units purchased by BW Energy are subject to a six-month lock-up agreement.
Each Unit is comprised of one common share of the Company (“ Common Share ”) and one Common Share purchase warrant of the Company (“ Warrant ”). Each Warrant entitles the holder thereof to purchase one Common Share at an exercise price of C$0.60? until June 17, 2027. The Warrants will commence trading on the TSX Venture Exchange (“ TSXV ”) under the symbol "RECO.WT.A" on or about June 24, 2025, subject to final TSXV acceptance.
The net proceeds from the Offering will be used for exploration activities, working capital and general corporate purposes. The primary exploration activity to be funded with net proceeds from the Offering will be the drilling of Prospect I, which has been named the Kavango West 1X well. Work on the access road and drill site is currently being completed while the Company awaits receipt of the remaining requisite permits. The rig mobilization to the Kavango West 1X location is scheduled in late June, with drilling to begin thereafter.
Kavango West 1X – High Potential Exploration Well
The Kavango West 1X exploration well will be the second test in the expansive Damara Fold Belt play. The prospect is a large fold identified on modern 2D seismic data which extends over 20 kilometers long by 5 kilometers wide and is expected to penetrate a thick Otavi carbonate reservoir section, which is the primary target in the play. The Kavango West 1X well will be drilled to a planned total depth of approximately 3,800 metres (12,500 feet) and is targeting 346 million barrels of gross unrisked (30 million barrels of gross risked) prospective light/medium crude oil resources on a 100% working interest basis, 312 million barrels (1,2) net unrisked (27 million barrels net risked) to ReconAfrica’s 90% working interest as at the date of the NSAI report or 1,839 billion cubic feet of gross unrisked (133 Bcf risked) prospective natural gas resources on 100% working interest basis, 1,655 billion cubic feet ( 1, 2) unrisked net (120 Bcf net risked) to ReconAfrica’s 90% working interest as at the date of the NSAI report), based on the most recent prospective resources report prepared by Netherland, Sewell & Associates, Inc. (“NSAI”) as at December 31, 2024, filed on SEDAR+ at www.sedarplus.ca (the “NSAI Report”) (1) (2) .
Damara Fold Belt Play Across 11.5 Million Acres in Namibia and Angola
The Damara fold belt trend is identified in the subsurface by a grid of 2D seismic data, and the Company has mapped 19 prospects and 4 leads on the Namibia side of the play. The Namibia area is estimated to hold 2.6 billion barrels (1,2) of unrisked prospective light/medium crude oil resources and 157 million barrels (1,2) of risked prospective light/medium crude oil resources from the Damara Fold Belt play prospects on PEL 73.
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. 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.
Not reflective of ReconAfrica’s current working interest of 70% of PEL 73.
Recently, the Company has entered a Memorandum of Understanding (MOU) with National Agency for Petroleum, Gas and Biofuels of Angola (ANPG) ?for a joint exploration project in the Etosha-Okavango basin, located onshore in southeastern Angola. This agreement is a strategic addition to the Company’s asset portfolio, which creates an opportunity for early entry into onshore Angola at a low cost, with minimal work commitments. It complements ReconAfrica’s activities in Namibia and highlights the potential of the Damara Fold Belt and Rift Basin by adding 5.2 million contiguous acres in Angola to the existing 6.3 million acres in Namibia in the Damara Fold Belt and Rift Basin exploration plays.
Additional Details on the Offering
The Offering was completed by way of a prospectus supplement to the Company’s short form base shelf prospectus dated February 29, 2024, filed in all of the provinces and territories of Canada, and the Units were sold outside of Canada on a private placement basis. Copies of the prospectus supplement and the base shelf prospectus are available under the Company’s profile on SEDAR+ at www.sedarplus.ca .
Directors and officers of the Company participated in the Offering and were issued an aggregate of 687,400 Units. Such participation in the Offering constitutes a “related party transaction” as defined in Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“ 61-101 ”). The Offering is exempt from the formal valuation and minority shareholder approval requirements of 61-101 as neither the fair market value of the securities issued to related parties nor the consideration for such securities exceed 25% of the Company’s market capitalization. The Company did not file a material change report 21 days prior to closing of the Offering as the participation of insiders of the Company in the Offering had not been confirmed at that time and the shorter time period was necessary in order to permit the Company to close the Offering in a timeframe consistent with usual market practice for transactions of this nature.
The Underwriters received a cash commission equal to 7.0% of the gross proceeds of the Offering (other than from the sale of Units to BW Energy and purchasers on the president’s list, for which a 3.0% cash commission was paid), for an aggregate of C$1,124,936. In addition, the Underwriters were issued an aggregate of 2,124,472 broker warrants (the “ Broker Warrants ”), equal to 7.0% of the number of Units sold under the Offering (other than with respect to those sold to BW Energy and purchasers on the president’s list, for which no Broker Warrants were issued). In addition, the Underwriters received an advisory fee of C$95,000 (plus GST) and 121,380 advisory broker warrants on the same terms as the Broker Warrants. Each Broker Warrant entitles the holder to acquire one Common Share at a price of C$0.50 until June 17, 2027.
This press release is not an offer to sell or the solicitation of an offer to buy the securities in the United States or in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to qualification or registration under the securities laws of such jurisdiction. The securities being offered have not been, nor will they be, registered under the U.S. Securities Act and such securities may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws.
TSXV Final Approval of Certain Warrant Extensions
The TSXV has approved the application for extension of certain previously issued unlisted warrants announced by the Company in a news release on May 21, 2025. The warrants with an original expiry date of September 1, 2025, and an exercise price of C$1.40 per Common Share will be extended to March 1, 2027. The warrants with an original expiry date of July 18, 2025, and an exercise price of C$1.35 per Common Share will be extended to January 18, 2027. Warrant holders will not have to take any action in connection with the extensions. The exercise prices remain unchanged.