Reconnaissance Energy Africa Ltd is positioning itself for a major breakthrough in Namibia’s burgeoning energy sector, led by an oil and gas veteran.
Since taking the helm one year ago, CEO Brian Reinsborough has spearheaded a strategic overhaul, reshaping the company’s focus and bringing in a team of seasoned experts to capitalize on the unique opportunity to explore an entire sedimentary basin under one leasehold.
With the sale of its Mexican assets completed and key permits secured, ReconAfrica is now executing an ambitious drilling campaign having begun with the Naingopo exploration well which started drilling in July and is expected to complete in early October. Dubbed ‘Recon 2.0’ by Reinsborough, this new chapter for the company aims to tap into Namibia’s rising energy potential, both onshore and offshore.
With over 25 years of experience in the deepwater Gulf of Mexico working for companies such as Mobil Oil and Nexen, Reinsborough been involved in major discoveries, contributing to the discovery of over 2.4 billion barrels of oil equivalent.
Reflecting on his decision to join ReconAfrica, Reinsborough admitted that the role was somewhat unconventional for him, given his extensive background in deep-water exploration.
“The Recon CEO job wasn’t down the middle fairway for me at all,” he said. “Most of my career has been spent exploring and running companies in deep water, so it doesn’t fit into the usual box. But I had an opportunity to really dig into what they were pursuing technically, and I liked what I saw.”
It wasn’t just the assets that caught his attention—it was the opportunity to rebuild and refocus the company. “The board gave me an open mandate to make the necessary changes. ReconAfrica had flatlined a bit, and I saw the chance to turn it around,” Reinsborough explained. “I came in and approached it as a startup, even though it’s been publicly listed for five years.”
ReconAfrica’s metamorphosis comes during a significant transformative period for Namibia’s oil and gas sector. Two major hydrocarbon discoveries were announced by the National Petroleum Corporation of Namibia (NAMCOR) in 2022. These finds, made in collaboration with Shell, QatarEnergy, and TotalEnergies, place the country among sub-Saharan Africa’s top energy players. The discoveries are expected to reshape Namibia’s economy, with tests currently underway to assess their full potential. So far in 2024, additional exploration success has been seen offshore by Portugal’s GALP Energia.
The area most known to investors is the Orange Basin, situated offshore Namibia through the South African coast. ReconAfrica, however, is zeroing in on an onshore play around the Damara Fold Belt. A geological formation in Namibia and Botswana that was created during the Damara Orogeny, a mountain-building event that occurred over 500 million years ago, the belt is significant for the region’s geology and mineral wealth. Its structure has helped shape the country’s oil and gas potential, with basins like the Owambo and Kavango Basins, where ReconAfrica is exploring.
Reinsborough and the team believe that its assets there – Naingopo and Kambundu or Prospect P – could have anywhere from 200 million to 500 million barrels of oil.
“Fold belts are among the most prolific plays in the world, averaging around 260 million barrels of oil per prospect globally,” the CEO said. “If this well works, it could open up a whole new play.”
The Naingopo well is targeting 181 million barrels of unrisked prospective light-to-medium oil resources or 937 billion cubic feet of prospective natural gas resources, while Kambundu or Prospect P is targeting 309 million barrels of unrisked prospective light-to-medium oil resources or 1.6 trillion cubic feet of prospective natural gas resources, both on a 100% working interest basis.
“These are the types of prospects you see in deep water, but we’re drilling them onshore at a fraction of the cost—$12 million per well compared to $120 million in deep water,” Reinsborough noted.
Not only does this give ReconAfrica a significant cost advantage, but the company can also bring discoveries online much faster. “In deep water, it can take seven or eight years to bring a discovery into production. Onshore, we can do it in two to three years,” Reinsborough added.
This unique combination of cost efficiency and faster time-to-market has positioned ReconAfrica as a serious player in African oil exploration. “When you add up these factors, we’re looking at asset-level returns that are multiples of what you may see in deep water exploration,” said Reinsborough.
The company recently hit a key milestone, spudding its first exploration well in July. This high-potential well is just the beginning, with the next on the horizon being the Kamundu prospect. Set to be drilled in the fourth quarter of this year, Kamundu is twice the size of the current well, with a resource estimate of around 380 million barrels of oil. “The potential there is remarkable,” Reinsborough said, adding that the prospect’s geological attributes make it even more attractive. “It’s a really well-defined structure and a great test of the main carbonate interval. Lots of good things going for this one.”
ReconAfrica’s strategic partnerships have also been key to its renewed momentum. Notably, the company has partnered with BW Energy and Namibia’s national petroleum company, NAMCOR. “BW Energy checked a lot of boxes for me,” Reinsborough said. “They have financial strength, an international footprint, and a strong presence in Namibia. They understand the market and what it takes to monetize resources.”
This partnership, alongside NAMCOR, provides ReconAfrica with a solid foundation, not just for exploration, but for eventual production. The financial backing these partnerships bring is crucial, particularly in an industry where capital is critical to success.
So far this year the company has raised around C$60 million – no small feat for a small-cap company. The funds will be allocated to the company’s drilling and seismic programs, ensuring the business is well-capitalized for future exploration. “What I wanted to change was the way small-cap companies are financed,” Reinsborough explained. “Instead of scrambling for money well-by-well, I wanted to have a business plan in place, and we did just that.”
Looking ahead, Reinsborough is confident in the company’s long-term prospects. “We’ve spent the last year surgically dissecting this company and rebuilding it for long-term, sustainable value,” he said. “This is not a one-shot deal. We’re building an enterprise of scale, and if you look at all the pieces we’ve put together over the last year, this is truly a new company.”