Analysts are optimistic about Reconnaissance Energy Africa Ltd’s exploration program in Namibia and Botswana following a corporate update earlier this week.
The company’s flagship project in Namibia, the Naingopo exploration well located in the PEL 73 block, continues its drilling towards a target depth of 3,800 meters. While drilling has experienced slight delays due to equipment adjustments, the well has reached 3,500 meters, with final drilling operations expected to complete soon.
“Should the team be successful in proving the presence of hydrocarbons and the economic viability of its resource, we believe the stock could be worth multiples of its current valuation which is illustrated in the difference between our estimates or risked and unrisked values,” analysts at Haywood Securities wrote.
The well has estimated unrisked resources of up to 309 million barrels of oil or 1.6 trillion cubic feet of natural gas, which could further enhance the company’s prospects in the region.
“In the event of a natural gas discovery, the unrisked prospective resources are estimated at 937 Bcf or 656 Bcf net,” analysts at Research Capital Corporation wrote.
Looking ahead, the company is preparing to conduct Namibia’s first onshore 3D seismic survey, covering 500 kilometers over the Kavango Rift Basin in mid-2025, a critical step in advancing its exploration program.
With drilling at Naingopo nearing its final stages, results are expected to be available soon, and analysts remain optimistic about the potential of the company’s exploration prospects.
Research Capital Corporation maintains its Speculative Buy rating on the stock, with a target price of C$2.30, driven by the high-risk, high-reward nature of the current exploration drilling program. Haywood has a Buy rating with a target price of C$2.10 per share on the stock.
Shares of ReconAfrica were trading around C$0.97 in Toronto on Wednesday.