June 11, 2021, 9:43 a.m. EDT

Is This The Most Exciting Oil Play Of The Last 20 Years?

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Jun 11, 2021 (Baystreet.ca via COMTEX) -- The African nation of Namibia has never produced a barrel of oil in its history. Now, for the second time in less than two months, it’s received positive signs that it could be home to 120 Billion barrels of oil generated in its giant Kavango basin.

The small-cap explorer that’s bringing in the good news for Namibia is Reconnaissance Energy Africa(“Recon Africa”) ( TSXV:RECO , OTC:RECAF ), and its stock spiked last week after it encountered evidence of oil and gas for a second time and made an impressive commitment to ESG .

On April 15th, Recon Africa announced the results of its first of three drills (6-2), showing evidence of an active petroleum system .

Not only did the results point to indicators of an active petroleum system in this nearly 9-million-acre basin, but also provided 200 meters of oil and natural gas indicators/shows over three discrete intervals in a stacked sequence of reservoir and source rock.

Then, on June 3rd, RECO gave investors another reason to be excited, when the first section of its second well (6-1) provided further confirmation of a working petroleum system. At shallow depths, the well encountered 134 meters of light oil and gas.

The second well is 16 kilometers from the first well and is in the same sub-basin.

"In these first two wells, the many oil and gas shows, with such variety, is certainly remarkable. It is highly encouraging to see clastic and thick carbonate sections which appear to have similar reservoir characteristics as observed in many other petroleum provinces,” ReconAfrica director Dr. Jim Granath said in a statement.

With intermediate casing operations now complete and drilling on schedule, Recon Africa ( TSXV:RECO , OTC:RECAF ) expects to finish drilling its 6-1 well by the end of this month.

The company also announced its commitment to allocate a minimum of CA$10 million of ESG expenditures to the Kavango region in which it operates.

The anticipation appears to have increased excitement around the stock since mid-April when early results and indications of a working petroleum system in the giant Kavango basin came as a surprise to many. The anticipation for us is now palpable.

Stock forums look to be buzzing… particularly since the rights to this huge basin, the size of Belgium, belong to a small-cap explorer that appears to have significant potential and cash in the bank…

Spencer Hohan, a petroleum engineer, commented on Yahoo :

“As a Petroleum Engineer of 40 years now, having spent a career with major oil companies, and smaller independents, it's hard to emphasize how rare it is for some like this to be a ‘hit’ on the first penetration well drilled based primarily on a geomagnetic survey. This is astounding. If the second well shows anywhere near similar geophysical properties, and further confirms the basin structure, this could easily be worth more than a hundred times its current price. Sorry, shorts. You'd best cover today, or you are bankrupt. And it may be too late already.”

Doug, an early investor, commented on Yahoo :

“So far, so good, not only in exploration success, but also good will and investment in the people of Namibia. I invested in RECAF in October, 2020 at 0.7138. I then invested for 3 of my grandkids and showed them the company video to give them background on the oil exploration and talk about a company helping the community and country. Good companies not only make profit, they help people prosper. From what I can see, well done, team RECAF, well done.”

It’s a hot topic of conversation on Stocktwits , too:

We think that retail investors may just have found their favorite new stock.

The Fast-Paced De-Risking of Our Pick For The Onshore Oil Play of the Decade

When the first results came in April, Dan Jarvie – Recon Africa’s geochemist and advisory board member - confirmed the results as showing indicators of the existence of a working petroleum system , stating:

“These shows are indicative of migrated, thermogenic petroleum and occur over three different intervals in the 6-2 test well. The intervals penetrated include highly porous, permeable sediments and marine source rocks as predicted, and extensive marine carbonate lithofacies. Mud gas results indicate a high BTU gas with the presence of light oil in numerous cutting samples. Based on these initial results, the components and processes for a working petroleum system are all present.”

The Namibian government, too, felt there was cause for excitement.

Promising results could put Namibia on the world’s oil exploration map in a very positive way.

“This is great news for the people of Namibia, with the results of the well confirming a big potential for a very valuable energy resource for our country and therefore a significant development for Namibia onshore exploration efforts,” Hon. Tom Alweendo, Namibian Minister of Mines and Energy, stated in a press release. The positive results of this well have provided us with the critical information required to unlock the country’s petroleum prospectivity and is the first step in the process of locating significant accumulations, we can now confidently confirm Namibia is endowed with an active onshore petroleum basin.”

And it just keeps getting better.

The Kavango basin is over 8.5 million acres and as deep as the Permian basin in Texas.

That’s a huge basin for a small-cap company, but it’s fully funded for a 6-well drill and extensive seismic campaign, and we think it’s so far proven that it has what it takes with its experienced team.

When Kavango started coming to the attention of some investors a few years ago, geologist and geophysicist Bill Cathey, who has worked with many of the oil and gas supermajors, commented about the basin: “nowhere in the world is there a sedimentary basin this deep that does not produce commercial hydrocarbons.”

To put things into perspective, late last year, Dan Jarvie provided what he called a “conservative” estimate of Kavango’s potential based on only 12% of Recon’s holdings.

He estimated the basin could have generated 120 billion barrels of oil equivalent.

In November, Haywood Securities initiated coverage on RECO( TSXV:RECO , OTC:RECAF ), saying that a discovery success would present manifold opportunities for strategic joint ventures for further de-risking--without additional shareholder dilution.

A month later, Haywood adjusted their evaluation, noting that results showing evidence of the presence of a working hydrocarbons system, “should provide abundant opportunities for further exploration and appraisal drilling”.

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