ReconAfrica Sees Investor Demand Double Financing Size To $20.0 Million

Reconnaissance Energy Africa Ltd. (TSXV: RECO), or ReconAfrica for short, appears to be an outlier in the current oil environment. The company announced this morning that its previously announced private placement of $6.0 to $10.0 million has now more than doubled to that of $20.0 million in light of intense investor demand. Further, the over allotment option has been removed in connection with the offering in light of the significant upsizing.

Under the terms of the financing, the company is selling units at a price of $0.70, with each unit consisting of one common share and one common share purchase warrant. Each warrant has an exercise price of $1.00, along with a maturity of five years from the date of issue. Warrants are also subject to an acceleration clause if the price of ReconAfrica exceeds $3.00 for a period of 20 days on a volume weighted average basis.

Proceeds from the offering are to be used to transport ReconAfrica’s drill rig from that of Houston, Taxes to the firms operations located in Namibia. From there, funds will be utilized to conduct a three we;; exploration program in what is referred to as the Kavango Basin. Any remaining funds will be used for general working capital. The company currently holds petroleum licenses for approximately 8.75 million contiguous acres in the region.

ReconAfrica last traded at $0.89 on the TSX Venture Exchange.


Information for this briefing was found via Sedar and Reconnaissance Energy Africa Ltd. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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