ReconAfrica in massive deal; eyes NSX
Reconnaissance Energy Africa (ReconAfrica) has agreed to sell 20% working interest in PEL 73 in Namibia to BW Energy for a total potential consideration of US$141 million - about N$2.5 billion at the current exchange rate.PEL 73 in the Kavango Basin in northeast Namibia is where ReconAfrica recently spud its Naingopo well.
It intends drilling a second well in the basin in the last quarter of this year.
BW Energy already has a stake of 95% in PPL003 in the Kudu gas field offshore Namibia. Namcor owns the rest.
Commenting on the deal with ReconAfrica, BW Energy CEO Carl K. Arnet said: “The data and insights gained through ReconAfrica’s exploration campaign will further our understanding of the geology and petroleum system in Namibia and help de-risk planned exploration and development of our Kudu licence.”
Shared view
“Our farm-out joint venture process was thorough and comprehensive, which attracted significant interest from high quality companies of all sizes,” ReconAfrica president and CEO Brian Reinsborough commented on the deal.
“BW Energy’s offer met our guidelines to ensure strategic alignment for a multi-well exploration drilling programme while retaining significant upside exposure on success,” Reinsborough added.
According to Reinsborough, the partnership provides ReconAfrica with a strategic partner with a high-quality technical and operational team which compliments its own along with a shared view to expand the oil and gas potential in Namibia.
Money
Among others, the transaction provides for US$16 million (about N$288 million) equity investment from BW Energy, supporting ReconAfrica’s exploration programme.
It also allows for a bonus of US$45 million (N$810 million), earned at declaration of commerciality, or the final investment decision, regarding ReconAfrica’s project in the Kavango Basin.
Stock exchange
In the “near future”, ReconAfrica also plans to apply for a dual-listing on the Namibian Stock Exchange (NSX), the company said in a statement.
It is already listed on the TSX Venture Exchange in Toronto, Canada. A dual-listing on the NSX will “further broaden” ReconAfrica’s global exposure, the company said.
On completion of the BW Energy transaction, the ownership interests in PEL 73 will be: ReconAfrica 70%, BW Energy 20%, and Namcor 10%.
ReconAfrica remains the operator of PEL 73.