Reconnaissance Energy Africa has set out plans to wrap up its joint venture process in April and begin drill its next well, in the Damara Fold Belt, in June.
Company CEO and president Brian Reinsborough said ReconAfrica had “significantly advanced our understanding of the prospectivity of the Damara Fold Belt play” in the quarter. The team has also made progress in hashing out a joint venture and preparing for drilling operations.
“Our technical team has increased our understanding of the oil potential of the Fold Belt play by integrating all available geochemical data and conducting additional basin modelling studies.”
Netherland, Sewell & Associates, Inc. (NSAI) is evaluating the company’s studies and should provide a revised resource report in early March.
The NSAI report will provide additional insights to potential partners, Reinsborough said. ReconAfrica restarted the farm-out talks in December. It has previously said its preferred option would be to secure a partner to fund a “multi-well” drilling programme.
ReconAfrica has carried out three seismic phases on its Namibian acreage, covering 2,767 km of 2D. Based on its assessment of the Damara, ReconAfrica said it expects there could be oil in the shallower Mulden reservoir areas, while the deeper Otavi may hold gas.
The fold belt will be its initial focus, the company said. It also has a Karoo Rift play, but it intends to acquire a tight grid 2D seismic on this. It targets drilling a first well in the rift in 2025. This play, which was ReconAfrica’s original focus, now appears more challenging with the company saying it had additional complexity.
The first well will be on Prospect L, in the Damara Fold Belt, it said. ReconAfrica said it had already begun civil works on the project, including roads, drilling pad and long-lead tendering.
Once the company begins drilling, it intends to keep on going.
As of the end of December, it had C$8.9 million ($6.56mn) of working capital. This week, the company also announced a settlement for class action lawsuits in the US and Canada. This will not have a direct financial impact on ReconAfrica, it said, with insurance covering the deal.
It also filed a short-form prospectus – to cover 25 months – during which it can raise $120mn ($88.5mn) through various instruments. The cash, it said, would go to funding exploration and evaluation.
ReconAfrica has focused most of its efforts in Namibia. However, it has begun early works over the border in Botswana. The company said it had awarded a contract for a groundwater feasibility study.