Reconnaissance Energy Africa to sell Mexico operations to Chame Energy
Reconnaissance Energy Africa, a Canadian oil and gas entity delving into the vast Kavango Sedimentary Basin located in the Kalahari Desert spanning northeastern Namibia and northwestern Botswana, has confirmed its decision to sell its Mexico-based operations.
Details of the Sale
Following the Share Purchase Agreement with Chame Energy Corporation, all shares of Renaissance Oil Corp. (known as RenCan), which is ReconAfrica’s fully owned subsidiary that holds all its assets in Mexico, will transition to Chame. This significant agreement was finalized on October 25, 2023, with completion contingent on the approval by the TSX Venture Exchange (TSXV). For clarity, Chame and ReconAfrica share no non-arms length relationship as outlined by the TSXV’s guidelines.
The transaction’s assessed price is tagged at US$7,500,000. Breaking down the financial intricacies, RenCan had received an equal loan amount from its wholly-owned subsidiary, which was then channeled to ReconAfrica, classifying it under “Inter-Company Loans.” As per the Agreement’s conditions, all these inter-company loans, including any other financial obligations between ReconAfrica and RenCan and its subsidiaries, are considered settled in entirety upon the deal’s conclusion without further implications. Additionally, Chame will undertake all debts and responsibilities, present and future, of RenCan and its associated entities.
Finder’s Fee and Background on Chame
In association with the finder’s fee agreement made between ReconAfrica and the duo, Willem Veltman and Kevin Smith (identified as the “Finders”), there’s a mandated payment of US$200,000 to be made to these Finders post the transaction’s closure.
Chame is an exclusive enterprise steered by Edgar (Benny) De la Torre. Backed by over four decades of experience, Mr. De la Torre, through his cluster of Mexican firms, has been a pivotal figure in providing oil field services within Mexico.
Brian Reinsborough, ReconAfrica’s President and CEO, remarked, “We are very pleased with this transaction. It provides the Company with access to working capital while allowing us to exit Mexico and remove the legacy liabilities from our balance sheet in excess of US$100 million. This transaction streamlines our portfolio and enables the Company to focus its resources on progressing our joint venture partnership efforts and preparing to execute our multi-well, high impact exploration program in Namibia which is expected to commence in Q1 of 2024.”