Reconnaissance Energy Africa Ltd said it has signed a memorandum of understanding with Angola’s national oil regulator for a joint exploration project in the Etosha-Okavango basin, its first move into onshore Angola.
The agreement with the Agência Nacional de Petróleo, Gás e Biocombustíveis (ANPG) gives ReconAfrica exclusive rights during the MOU period to explore a 5.2-million-acre block in southeastern Angola, complementing the Canadian firm’s existing 6.3-million-acre license in neighboring Namibia.
ReconAfrica will hold an 80% working interest in the area, while Angola’s state oil company Sonangol will hold the remaining 20%.
“The encouraging technical results from our recent Naingopo exploration well on PEL 73 onshore Namibia have strengthened our belief in the significant hydrocarbon potential of the Damara Fold Belt play,” said Brian Reinsborough, CEO of ReconAfrica.
Reinsborough told shareholders that ReconAfrica’s geological models indicate the Fold Belt likely extends into Angola, and recent regulatory reforms have made the country an attractive destination for new oil and gas exploration.
As part of the agreement, ReconAfrica will conduct geological and geochemical studies, a regional oil and gas seep survey, and plan a 2D seismic program over a 24-month period.
The company is also preparing to drill Prospect I onshore Namibia, 47 kilometres from the Angolan MOU area. It is targeting 365 million barrels of unrisked and 32 million barrels of risked prospective light/medium oil resources, or 1.9 trillion cubic feet of unrisked and 140 billion cubic feet of risked prospective natural gas resources.
Shares of ReconAfrica moved 3.8% higher at Thursday’s opening bell.