Reconnaissance Energy Africa Ltd., operating as ReconAfrica, is a Canadian oil and gas exploration company that operates in the Kavango in Namibia and Botswana. Headquartered in Calgary, it was co-founded by Craig Steinke and Jay Park in Vancouver. Its CEO is Scot Evans. ReconAfrica is publicly traded on the TSX Venture Exchange and the Frankfurt Stock Exchange.
Operations and history
Co-founder Craig Steinke reportedly accessed a global dataset of potential undeveloped oil-and-gas sites and, knowing that an old well had been drilled nearby in 1964, Steinke leased the lands in early 2014.
ReconAfrica is licensed to explore a 13,200-square-mile region in the Kavango Basin in Namibia and Botswana, which is home to more than 200,000 people and vital elephant migratory routes. The region, in northwestern Botswana and northeastern Namibia, is adjacent to two national parks and two UNESCO World Heritage Sites. UNESCO has expressed concern about the proximity of ReconAfrica's exploration sites to its heritage sites. Given ReconAfrica's site's proximity to the Omuramba-Omatako river, concerns have also been raised about the possible impacts of oil-and-gas exploration and production on the water quality in the relatively water-scarce area.
ReconAfrica's contract with the Namibian government and its state-owned oil company, NAMCOR, prescribes that it will drill three wells to determine whether there are significant oil reserves in the region. ReconAfrica holds a 90% stake in that exploration license, with NAMCOR holding the remaining 10%. ReconAfrica is subjected to a 5% royalty fee and a 35% corporate tax by the Namibian government.
ReconAfrica drilled its first well in January 2021 and its second on May 5, 2021.
In 2021, ReconAfrica moved its offices from Vancouver to Calgary.
In May 2021, ReconAfrica claimed that it could generate some 100 billion barrels of oil and gas from its site in Namibia and Botswana—which is roughly equivalent to the proven oil reserves of Kuwait or the United Arab Emirates.
In 2021, U.S. Senator Patrick Leahy (D-VT) and Congressman Jeff Fortenberry (R-NE) called for a scrutiny of ReconAfrica's activities in Namibia by the U.S. Securities and Exchanges Commission.
On August 5, 2021, ReconAfrica and partner NAMCOR released a report claiming 350 metres of hydrocarbon showings from the second test well, in addition to the 250 metres found from the first well.
On October 14, 2021, Prince Harry and Reinhold Mangundu co-wrote an opinion article in the Washington Post that condemned ReconAfrica's exploratory activities.
In 2022, ReconAfrica provided N$1.2 million worth of scholarships to ten Namibian students from the Kavango East and Kavango West regions.
Stock promotions
On January 14, 2020, the value of shares in ReconAfrica increased by 40%. ReconAfrica denied knowing of a reason for this surge in trading, but later revealed—at the request of the Investment Industry Regulatory Organization of Canada—that it had paid CA$120,000 to a German media company for a stock promotion campaign. One of the articles that was funded by ReconAfrica compared their stock to a winning lottery ticket.
On June 4, 2021, a complaint was filed with the British Columbia Securities Commission, alleging that ReconAfrica had not adequately disclosed that it changed its business model after the Namibian government prevented it from engaging in fracking.
On October 25, 2021, a class-action lawsuit was filed against several ReconAfrica executives in the United States on behalf of individuals or entities who bought shares in ReconAfrica between February 28, 2019 and September 7, 2021. The lawsuit alleged that ReconAfrica engaged in "stock pumping".
According to Viceroy Research; Haywood Securities’ 2020 report ‘Chasing a giant oil resource in onshore Namibia‘ does not disclose that Sproule gave the exploration less than a 4 percent chance of success. but talks about massive potential and quotes 'source rock specialist’ Dan Jarvie as estimating 100 plus billion barrels of oil with no evidence to support such an estimate and without disclosing that Jarvie is a shareholder and insider of ReconAfrica. Haywood assigned the prospect of success at 27 percent without any justification.
A May 2021 article by National Geographic article revealed that the company was estimating future revenues based on fracking, which it has no licence for. While telling the Namibian public that fracking was not their intention, the company based their estimates on the Sproule Report which said the target was "Unconventionals"