The Globe and Mail reports in its Friday edition that U.S.-registered short seller Viceroy Research has taken a short position in Reconnaissance Energy Africa, alleging the company is "drilling blind" and has a "near-zero chance" of finding any deposits of value in its Namibia exploration project. The Globe's Geoffrey York and Niall McGee write that in a report released Thursday, Viceroy said it has shared its detailed findings with Canadian regulators. ReconAfrica's stock price on the TSX Venture Exchange has soared from 50 cents to more than $13 over the past 18 months. Viceroy has come under sharp criticism in several countries, and South African central bank Governor Lesetja Kganyago has called it a "hit squad." ReconAfrica said the Viceroy report "appears to contain groundless allegations." The company's Grayson Andersen tweeted that the Viceroy report was "full of dated references and incorrect information." The company said its first test well in Namibia has found clear evidence of an "active conventional petroleum system" in the Kavango basin. The Globe quotes Arthur Millholland, who runs Canadian Overseas Petroleum (CSE: XOP), which last traded at one cent, saying the Viceroy report is "right on the mark."
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