ReconAfrica expands across Africa with 5.2M-acre Angola deal, sets sights on unlocking frontier oil riches

Reconnaissance Energy Africa Ltd. (ReconAfrica, TSXV: RECO; OTCQX: RECAF; Frankfurt: 0XD; NSX: REC) has signed a strategic Memorandum of Understanding (MOU) with Angola’s Agência Nacional de Petróleo, Gás e Biocombustíveis (ANPG) for a joint exploration project that significantly enhances its onshore oil and gas presence in southern Africa. The MOU covers 5.2 million acres in Angola’s Etosha-Okavango basin, reinforcing the company’s investment strategy in the Damara Fold Belt and Rift Basin plays, and positioning it as an early mover in a region with untapped hydrocarbon potential.

This agreement extends ReconAfrica’s total acreage across Angola and Namibia to more than 11.5 million acres, with the Angola MOU area geographically and geologically aligned with its current exploration blocks in Namibia. The move is seen as a direct response to positive technical indicators from ReconAfrica’s Naingopo exploration well on Namibia’s PEL 73, which has strengthened confidence in the Fold Belt’s capacity to yield commercially viable hydrocarbon reserves.

What is the strategic value of ReconAfrica’s entry into Angola?

The new MOU provides ReconAfrica with an 80% working interest in the Angola acreage, with Angola’s national oil company Sonangol holding the remaining 20%. The company will lead all initial geological studies and oil seep surveys during the 24-month MOU period, including geochemical sampling and planning for 2D seismic acquisition. This early-stage, low-cost entry offers ReconAfrica a rare opportunity to consolidate its regional geological thesis across both sides of the Angola-Namibia border while maintaining control over exploration operations and data.

ReconAfrica President and CEO Brian Reinsborough noted that the company’s geological models suggest the Damara Fold Belt play extends into southeastern Angola. The Fold Belt is recognised globally for hosting significant reserves, and its underexplored segments offer substantial upside for explorers with large acreage positions and technical expertise. Reinsborough emphasised that Angola’s regulatory reforms further support the company’s decision, making the jurisdiction more attractive for early-stage oil and gas activity.

How does this Angola deal complement existing drilling plans in Namibia?

ReconAfrica’s work in Angola comes as the company advances toward drilling its largest prospect to date—Prospect I—located within Petroleum Exploration Licence 073 (PEL 73) in Namibia, just 47 kilometres from the Angolan MOU boundary. Prospect I is targeting 365 million barrels of unrisked and 32 million barrels of risked prospective oil resources or 1.9 trillion cubic feet of unrisked and 140 billion cubic feet of risked prospective natural gas resources, based on an independent resource estimate by Netherland, Sewell, & Associates, Inc. (NSAI).

ReconAfrica’s drilling program for Prospect I remains on track to commence this quarter. Pre-drill evaluation and pre-construction activities are complete, and the target drilling depth is 3,800 metres with flexibility to go deeper. This effort builds on learnings from the Naingopo well, which encountered over 50 metres of reservoir-quality carbonates in the Otavi formation—supporting further exploration and validating parts of the regional subsurface model.

What is ReconAfrica’s ESG and stakeholder engagement approach?

As ReconAfrica expands its footprint across ecologically sensitive regions in the Okavango basin, the company is committed to implementing environmental, social, and governance (ESG) best practices. It has announced that community outreach initiatives, local employment programs, and habitat protection measures will be rolled out in tandem with exploration activities in both Namibia and Angola.

The company’s stated ESG policy aligns with international standards and includes rigorous baseline studies, environmental impact assessments, and early stakeholder engagement to mitigate concerns regarding biodiversity and land use.

How does this align with the current stock market performance and investor sentiment?

ReconAfrica’s latest expansion comes amid a volatile period for its stock, which has seen significant downward pressure. As of April 21, 2025, ReconAfrica’s shares on the TSX Venture Exchange (TSXV: RECO) closed at CAD 0.53, marking a sharp year-on-year decline of approximately 41.8%. On the OTCQX market (RECAF), the stock closed at USD 0.39. This decline places the current trading range close to its 52-week lows, reflecting investor caution amid broader exploration sector uncertainty.

Analyst sentiment remains mixed. While the company’s one-year price target sits at USD 1.79, with a range between USD 1.50 and USD 2.08, institutional investment remains limited. ReconAfrica’s largest known institutional holder is BW Energy Ltd., with insiders collectively owning approximately 4.78% of outstanding shares. The company’s recent strategic moves—including the Angola MOU and upcoming Namibian drilling—could serve as catalysts, but the market appears to be adopting a wait-and-see approach.

Given the current financial positioning, expert consensus suggests a “Hold” recommendation may be most appropriate. The Angola expansion adds long-term exploration upside, but near-term share price performance is likely to be driven by results from the upcoming Prospect I drilling campaign and continued investor updates on reserve validation and monetisation strategies.

What does this mean for ReconAfrica’s future in African energy exploration?

ReconAfrica is now one of the few independent explorers with a contiguous exploration strategy across both Namibia and Angola targeting the Damara Fold Belt and Rift Basin plays. With over 13 million acres under licence across Namibia, Angola, and Botswana, the company is positioned to influence the frontier energy narrative in sub-Saharan Africa.

If drilling results confirm commercial-scale resources, ReconAfrica may attract joint venture interest or acquisition overtures from larger oil and gas players seeking early access to the next African oil province. The company’s ability to manage its exploration risk while delivering value from its asset base will remain a key focus for shareholders, particularly amid ongoing shifts in global oil demand and energy transition strategies.