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Reconnaissance Energy Africa Ltd
Symbol RECO
Shares Issued 156,808,071
Close 2021-05-27 C$ 8.40
Recent Sedar Documents

Reconnaissance Energy closes $41.4-million bought deal

2021-05-27 14:25 ET - News Release

Mr. Scot Evans reports

RECONAFRICA ANNOUNCES COMPLETION OF C$41.4 MILLION BOUGHT DEAL FINANCING

Reconnaissance Energy Africa Ltd. has completed its previously announced bought deal offering of units for gross proceeds of $41,401,380, including the full exercise of the overallotment option in the amount of $5,400,180. The offering was completed by way of a short form prospectus filed in all of the provinces of Canada, except Quebec, and the units were sold elsewhere outside of Canada on a private placement basis.

Pursuant to the offering, a total of 4,358,040 units were sold at a price of $9.50 per unit. Each unit consists of one common share in the capital of the company and one-half of one common share purchase warrant. Each warrant entitles the holder to acquire one common share at a price of $14 until May 27, 2024. In the event that the moving volume-weighted average trading price of the common shares on the TSX Venture Exchange over any period of 20 consecutive trading days equals or exceeds $20, the company may, upon written notice to the holders of the warrants, accelerate the expiry date of the warrants to the date that is 30 calendar days following the date of such notice.

The offering was made through Haywood Securities Inc. The underwriter received a cash commission equal to 6 per cent of the gross proceeds of the offering (other than from the sale of units to purchasers on the president's list, for which a 3-per-cent cash commission was paid). In addition, the underwriter was issued compensation options in an amount equal to 3 per cent of the number of units sold under the offering (other than with respect to those sold to purchasers on the president's list, for which no compensation options were issued). Each compensation option entitles the holder to acquire one unit at a price of $9.50 until May 27, 2023.

The net proceeds from the offering will be used for seismic and drilling operations as well as for working capital and general corporate purposes, as outlined in the company's final short form prospectus dated May 19, 2021.

Certain officers and directors of the company have participated in the offering and were issued an aggregate of 12,370 units. Such participation in the offering constitutes a related party transaction, as defined in Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. The offering is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101, as neither the fair market value of the securities issued to related parties nor the consideration for such securities exceeds 25 per cent of the company's market capitalization. The company did not file a material change report 21 days prior to the closing of the offering, as the participation of insiders of the company in the offering had not been confirmed at that time and the shorter time period was necessary in order to permit the company to close the offering in a time frame consistent with usual market practices for transactions of this nature.

About Reconnaissance Energy Africa Ltd.

Reconnaissance Energy Africa is a Canadian oil and gas company engaged in the opening of the newly discovered, deep Kavango sedimentary basin in the Kalahari Desert of northeastern Namibia and northwestern Botswana, where the company holds petroleum licences comprising approximately 8.5 million contiguous acres. In all aspects of its operations, Reconnaissance Energy Africa is committed to minimal disturbances in line with international best standards and will implement environmental and social best practices in all of its project areas.

We seek Safe Harbor.

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