Questions and Answers from the Final Frontier of Onshore Oil Exploration
INTEREST OWNERSHIP. Staff of this website may have investments in the featured company and no duty to notify the market when they will be selling or buying more. Conduct your own extensive due diligence and seek the advice of your financial advisor or a registered broker-dealer before investing in anything.
NOT AN INVESTMENT ADVISOR. OTC WIKI, LLC is not licensed by any governing body to give investing advice or provide investment recommendation.
NO RECOMMENDATIONS OR OFFERINGS. Nothing in this article should be construed as, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy or hold, an interest in any security or investment product. We do not offer any investment products to the general public.
FORWARD-LOOKING STATEMENTS. This article and website contain certain statements, estimates and projections that are "forward-looking statements." All statements other than statements of historical fact on this website are forward-looking statements and include statements and assumptions relating to: plans and objectives of management for future operations or economic performance; conclusions and projections about current and future economic and political trends and conditions; and projected financial results and results of operations. OTC WIKI, LLC does not make any guarantees, representations or warranties (express or implied) about the accuracy of such forward-looking statements. Forward-looking statements involve certain risks, uncertainties, and assumptions and other factors that are difficult to predict. Readers are cautioned that actual results of the investments referenced in this website could differ materially from forward-looking statements; and readers of this website are cautioned not to view forward-looking statements as actual results or place undue reliance on forward-looking statements.
PERFORMANCE RISKS. Past performance is not indicative nor a guarantee of future results. No content on this website shall be viewed as a guarantee of future performance. Investing is inherently risky. Don't trade with money you can't afford to lose.
8/12/2022 Update - Recon Africa spud the long awaited 8-2 well in late January and is expecting to reach total depth by the end of August. Investor excitement is reaching a fevered pitch with hopes of excellent results (commercial quantities of oil). Another significant event is the company has confirmed that they will be opening the JV data room by 9/30/2022. Visit the Recon Africa wiki page.
Oil and Gas sector investors have watched with interest over the past two years as Recon Africa discovered and began exploring what could be the last large onshore oil discovery. Here are six questions that investors are asking about the company and this potentially incredible find.
Did Recon Africa discover oil in Namibia?
That depends on who you ask. Die-hard long investors will tell you that Recon Africa has discovered billions of barrels of oil. The company has only committed to saying it has discovered a working petroleum system, so there is no guarantee of commercial quantities of oil. A recently released resource report indicates about one billion unrisked barrels of oil and about 73 million risked barrels of oil. This report only covers a small portion of Recon Africa's license area in Namibia and is based on limited data.
Is Namibia a good place to look for oil?
While many nations, particularly in Africa, are burdened with corrupt, greedy and/or incompetent governments, Namibia has been a stable democracy since achieving independence 30 years ago. In addition, terms of Recon Africa's license agreement are reasonable by oil industry standards. Note that Namibia gets over 50% of oil production profits, so the nation is not getting a bad deal. Namibia has been eager to encourage oil exploration, as evidenced by two recent offshore oil discoveries by major oil companies. If successful, Recon Africa's discovery will be the first onshore find in Namibia. Many people in the oil and gas industry believe that Africa in general, and Namibia in particular, is a great place to explore.
If there is so much oil in Namibia, why are they only finding it now?
There are several reasons why oil exploration in Namibia as a whole, and the Kavango basin in particular, has been limited. As noted above, Namibia only gained its independence fairly recently, and only within the past 10 years or so have they turned their attention to encouraging oil exploration. Specific to the Kavango basin, the area was not considered a good target for commercial quantities of oil until recent analysis by geologists showed that the basin had the necessary geological characteristics and was much deeper than previously thought.
How much oil is there in the Kavango basin?
No one really knows how much oil there is, and how much of it can be pumped to the surface. In fact, it could be years or decades before this question has a clear answer. This lack of complete understanding is common in the oil industry since resource estimates are constantly updated as more information comes in. This information comes from seismic mapping and wells that are drilled and tested. In an area as large as the Kavango basin (Recon Africa has licenses for over eight million acres) it will take a long time to figure out how much oil it holds.
When will Recon Africa start drilling again?
Recon Africa completed two wells during 2021 but scrapped plans for a third well due to the success of the first two. In late 2021 2D seismic was completed which provided data for selecting future drilling locations. The company has stated that they expect to begin drilling again in Q2 2022 and will drill three to four wells in 2022. Based on recent comments, they will likely begin drilling within a few weeks. The company has C$75 million in cash which should be sufficient to complete the 2022 drilling program. Permit applications for multiple sites were submitted early in 2022 and it seems as though the necessary approvals have been obtained. One of the announced potential locations seems to have mine clearing activity going on and is quite obviously being cleared. Yes, you read that right. Mine and ordinance clearing is necessary in that region due to Namibia's war of independence in the 1990's.
Is Recon Africa a good investment?
Whether Recon Africa is a good investment for you depends on your risk tolerance and how likely you think they are to discover significant quantities of oil. The stock had a run up early in 2021 based on the discovery of a working petroleum system, but has been down significantly since that time. Some investors believe that short selling has had a big effect on the share price. It is possible that the huge increase during early 2021 made the stock overvalued as its market cap exceeded $1 billion. Some investors are also wondering if they should invest now while it is still a speculative stock, or wait until commercial oil is discovered and buy in at a higher price but with less risk.
How can I learn more about Recon Africa?
OTC Wiki contributors provide a wealth of information about RECAF Stock on the Recon Africa wiki page.