Reconnaissance Energy Africa arranges $10M offering

Executive Summary

• ReconAfrica announced a C$10 million overnight marketed public offering of units at 60 cents per unit, with gross proceeds of $10 million.
• The company entered into a Production Sharing Contract (PSC) for the Ngulu Block (Block C-7) offshore Gabon, acquiring a 55% working interest and operatorship in a joint venture with Record Resources, Gabon Oil Company, and the Republic of Gabon.
• Drilling operations on the Kavango West 1X well in Namibia are proceeding on schedule, currently at the last casing depth above the Otavi reservoir, with Total Depth (TD) expected in Q4 2025.

Key Details

• Financing Structure:

  • Gross Proceeds: $10 million.
  • Price: 60 cents per unit.
  • Underwriters: Research Capital Corp. (lead underwriter/sole bookrunner), Canaccord Genuity Corp., and Haywood Securities Inc.
  • Insider/Management Participation: Approximately $3 million in units expected from management, directors, and president's list investors.
  • Unit Composition: One common share and one common share purchase warrant.
  • Warrant Terms: Each warrant allows purchase of one common share at an exercise price of 72 cents, exercisable for 24 months from closing.
  • Use of Proceeds: Advancement of appraisal and exploration expenses for the Ngulu PSC, including geological/geophysical studies, 3-D seismic data reprocessing, advancement of the initial development well at the Loba complex, and general corporate purposes/working capital.
  • Closing Date: Expected on or about Sept. 29, 2025.
  • Overallotment Option: Underwriters have an option to purchase up to 15% additional units to cover overallotments.

• Ngulu Block (Gabon) Transaction Details:

  • Asset: Offshore Block C-7, renamed Ngulu, covering 1,214 square kilometres in shallow water offshore central Gabon.
  • Working Interests: ReconAfrica (55%, Operator), Record Resources (20%), Gabon Oil Company (15%), Republic of Gabon (10%, carried).
  • Commitments: Initial four-year term with option to renew for another four years. Commitments include detailed geological/geophysical studies, 3-D seismic reprocessing, and drilling one well.
  • Strategic Rationale: Diversifies portfolio into offshore West Africa; adds low-risk appraisal/development assets with near-term cash flow potential; leverages existing infrastructure (10km from Perenco operations).

• Ngulu Block Operational Highlights:

  • Loba Field: Existing oil discovery drilled in 1976.
    • Reservoir: Batanga formation, 27-degree API gravity oil.
    • Dimensions: 140 metres gross pay (70 metres net pay).
    • Production Potential: Approximately 20,000 barrels per day (based on offset fields).
    • Location: 60 metres water depth, 10 kilometres from existing infrastructure.
  • Exploration Inventory: 28 mapped prospects analogous to Gulf of Mexico play types.
    • Marquee Prospects: Lepidote Deep (postsalt) and Palomite Deep (presalt).
    • Offset Fields: Range from 38 million to 250 million barrels.

• Kavango West 1X Drilling Update (Namibia):

  • Status: Spudded July 31, 2025. Currently at last casing depth immediately above the Otavi reservoir.
  • Next Steps: Set casing, then drill ~1,500 metres of Otavi carbonate section.
  • Total Depth (TD): Approximately 3,800 metres.
  • Timeline: On track to reach TD and release results in Q4 2025.

Notable Quotes

• Brian Reinsborough, President and CEO: "Our drilling operations in Namibia on the highly anticipated Kavango West 1X well are proceeding on schedule... We are on track to reach TD and are expecting to release results in Q4 2025."
• Brian Reinsborough, President and CEO: "The addition of the offshore Ngulu PSC accomplished many of our goals. We have added near-term development drilling opportunities with line of sight to production and cash flow... Accelerating activity towards production and cash flow at Ngulu is the most efficient deployment of capital to maximize value for shareholders."