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Namibia: ReconAfrica announces an operations update, JV update and termination of FTB Capital contract

23 May 2024

Photo - see caption

Reconnaissance Energy Africa has announced an operations update with respect to activity relating to Petroleum Exploration Licence 73 ('PEL 73'), onshore northeast Namibia, an update on the joint venture process and the termination of the marketing agreement with FTB Capital Inc.

Brian Reinsborough, President and CEO commented: 'Our operations teams and contractors are working diligently to ensure we remain on schedule for a June 2024 spud of the high potential Naingopo exploration well, the first exploration well in the Damara Fold Belt. Our drilling teams are now in Namibia with the Jarvie-1 drilling rig undergoing routine maintenance and certification ahead of its planned move to the well location in the first week of June 2024. Advanced planning work has also commenced for our second Damara Fold Belt exploration well, Prospect P. Excitement is building ahead of drilling as recent investor meetings in London and industry conferences have highlighted the significance of the Naingopo well given the large potential for oil and gas resources. With the completion of our recent financing, we are well positioned to execute our drilling plans going forward. And finally, we have progressed our joint venture process to the next level of negotiation, as we are in advanced discussions with potential joint venture partners and expect to conclude negotiations in the coming weeks.'

Photo - see caption
Source: ReconAfrica

First Damara Fold Belt Well – Naingopo Prospect

Major civil works are wrapping up on the well site access roads and well pad construction. Members of the drilling crew have arrived in-country to undertake rig maintenance and certification activities which are ongoing ahead of the move of the Jarvie-1 rig to the Naingopo well (Prospect L), in the Damara Fold Belt. The drilling and operations teams, including all major third-party service providers, have completed a drilling on paper activity with all critical path processes reviewed and tested. All major equipment has been ordered and is either in country or in transit to Namibia. The well remains on schedule to begin drilling in June 2024 and is targeting 163 million barrels of unrisked prospective oil resources or 843 billion cubic feet of unrisked prospective natural gas resources based on the most recent prospective resources report prepared by Netherland, Sewell & Associates, Inc. ('NSAI') dated March 12, 2024, and available on the Company's website (the 'NSAI Report')(1) (2).

Damara Fold Belt Well – Prospect P

The Company is in advanced planning for Prospect P, which is expected to be the second Damara Fold Belt exploration well. Debushing activities are expected to begin in the near term and will be followed by demining activities before major civil works are started. The well is expected to spud in the fourth quarter of 2024, soon after the drilling of the Naingopo exploration well and is targeting 278 million barrels of unrisked prospective oil resources or 1.5 trillion cubic feet of unrisked prospective natural gas resources based on the NSAI Report(1) (2).

(1) 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.

(2) 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 are the volumes that could reasonably be expected to be recovered in the event of the discovery and development of these prospects.

Joint Venture Process Update

The Company has progressed its joint venture process to the next level of detailed discussions and continues to negotiate contract terms relating to its farm out process. In its review, Management has placed a strong emphasis on negotiating terms that will enable the Company to execute a multi-well exploration drilling program targeting wells in both the Damara Fold Belt and Rift Basin plays over the next 12 to 24 months. Results from these discussions are expected to conclude in the next several weeks.

Cancellation of FTB Contract

Following the press release dated March 18, 2024, the Company terminated its contract with FTB Capital Inc.on May 10, 2024, prior to the provision of any marketing or investor awareness services. As a result of the termination, all previously granted stock options to FTB were canceled.

Original announcement link

Source: ReconAfrica

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