Reconnaissance Energy Africa has struck a definitive deal with Namcor to swap increase its ownership in the Kavango Basin licence.
The Canadian company will acquire an extra 5% stake in PEL 73 from state-owned Namcor.
According to the letter of intent (LoI) on the deal from February, it will pay for this 5% interest with the issue of 5 million shares in ReconAfrica and $2 million in cash.
ReconAfrica said it expected to complete the deal by the end of 2022. It will need to receive approvals from various parties, including the Namibia Ministry of Mines and Energy and the TSXV.
The deal will see ReconAfrica increase its stake in the northeastern licence from 90% to 95%.
The company launched a process to find a joint venture partner earlier this month. It said it had signed up Alvarez & Marsal and Hannam & Partners to help manage the data room. The companies will launch a global push to find “potential, high quality, joint venture partners”.
ReconAfrica also announced today that it had extended the expiry date of 7.5 million warrants. It held a public offering in March covering the issue of 7.5mn shares, with a warrant attached to each share. The sale price was C$6.35 per share and the warrants were exercisable at C$9.
The company is trading today at C$4.65.
ReconAfrica has extended the warrants’ expiry to the end of March 2023.
It is in the midst of a drilling campaign but has been tight lipped about how this is going. At the end of August, ReconAfrica said it had reached total depth at the 8-2 well of 2,056 metres. Before drilling, the company had said it was targeting a depth of 2,800 metres.
Discussion amongst ReconAfrica investors online suggests the Jarvie-1 rig has now moved to the 6-2 location.
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