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Reconnaissance Energy Africa Ltd
Symbol RECO
Shares Issued 156,808,071
Close 2021-06-11 C$ 8.92
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Recon Africa, Namcor enter Kavango joint operating deal

2021-06-14 02:45 ET - News Release

Mr. Scot Evans reports

NAMCOR AND RECONAFRICA SIGN JOA; A PARTNERSHIP THAT SEEKS TO UNLOCK THE VAST RESOURCE POTENTIAL IN NAMIBIA

The National Petroleum Corporation of Namibia (Namcor) and Reconnaissance Energy Africa Ltd. have executed a joint operating agreement (JOA) to develop the resource potential of the Kavango sedimentary basin, northeast Namibia.

Under the agreement, the two companies will jointly pursue a continuing petroleum exploration program in the Kavango East and Kavango West regions of Namibia, with ReconAfrica covering the full costs to commerciality. The two companies initially entered into a petroleum exploration agreement with the government of the Republic of Namibia in 2015, under which they acquired petroleum licence No. 73.

The JOA was officially executed on June 11, 2021, and signed by ReconAfrica chief executive officer Scot Evans and Namcor managing director Immanuel Mulunga.

"We are delighted to have finalized the negotiations and signature of a joint operating agreement (JOA) with ReconAfrica for petroleum exploration licence No. 73. This agreement will govern the relationship between Namcor and ReconAfrica, and we will collectively advance the search for oil in the Kavango sedimentary basin in accordance with the laws of Namibia. We understand the hydrocarbon potential of the Kavango basin; hence, collaborating with an international company with both technical and financial capabilities such as ReconAfrica will unlock the discovery of commercially viable hydrocarbon reserves and thereby enhance economic development in the country," said Immanuel Mulunga, managing director of Namcor.

"We're pleased to finalize this operating agreement, which solidifies our partnership with Namcor. We look forward to working with Namcor as we jointly endeavour to unlock the potential of Namibia's vast national resources, providing jobs, economic growth and long-term responsible resource development -- which includes significant contributions to the social and environmental aspirations of the country," said Scot Evans, chief executive officer of ReconAfrica.

To date, ReconAfrica has drilled two test wells in the Namibian petroleum licence area, both of which have revealed evidence of a working conventional petroleum basin. The company plans to drill an additional two wells in 2021 to determine if the Kavango sedimentary basin will yield a commercially viable petroleum reservoir. Under their petroleum agreement with the Namibian government, ReconAfrica and Namcor would potentially activate a 25-year production licence if the exploratory drilling program proves the Kavango sedimentary basin is commercially viable.

The joint venture partners foresee continued national economic opportunities, including local job creation, substantially adding to the more than 200 jobs for Namibians already generated by the current exploration program. In addition to the economic benefits that will flow from the agreement, which also include taxes and potential future royalties, the two companies have committed to the adoption of a stringent health, safety and environment plan that will guide operations.

During the last year, ReconAfrica has been working closely with all levels of government in Namibia, including regional and traditional leadership, as it planned and initiated drilling operations in the Kavango East and Kavango West regions. This engagement is a long-term commitment, supported by a growing management and technical team in Namibia that is focused on project management, stakeholder relations, environmental management and wildlife conservation initiatives.

Already, ReconAfrica has demonstrated its commitment to the people of the Kavango region, beginning with its support of COVID-19 public health measures through the donation of health care packages and hospital equipment and the drilling of four community water wells, followed by a commitment to drill and donate another 16 community wells in the near term.

Last week, ReconAfrica released an update on its progress toward its environmental, social and governance (ESG) platform and coming ESG initiatives. Please read more about the company's ESG and drilling update.

About National Petroleum Corporation of Namibia

Namcor is the national petroleum corporation of Namibia, established under the Petroleum (Exploration and Production) Act of 1991. The company is tasked with the primary mandate to carry out reconnaissance, exploration and production operations either on its own or in partnership with other organizations in the industry.

Namcor operates in both the downstream and upstream sectors of the oil and gas industry in an endeavour to commercialize Namibia's hydrocarbon resources and profitably deliver petroleum products to the Namibian market, whilst ensuring security of supply.

In the upstream sector, Namcor spearheads the exploration, production and development of the hydrocarbon industry and the wider economy while developing enhanced data solutions and services. The company has also embarked upon a quest to locate and acquire commercial prospects and, in particular, a targeted pursuit to acquire oil- and gas-producing assets. The acquisition of high-integrity commercially viable oil and gas assets will allow Namcor to secure sustainable revenue generation and retention, therefore vastly increasing profitability and shareholder equity.

About Reconnaissance Energy Africa Ltd.

ReconAfrica 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, ReconAfrica 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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