VANCOUVER , Dec. 9, 2019 -- InvestorsHub NewsWire - Reconnaissance Energy Africa Ltd. (the "Company" or "ReconAfrica") (RECO.V) (LGDOF) (OXD.F) is pleased to announce it has engaged an international drilling company, Seidel Technologies, to play an integral role in executing the upcoming drilling program in the Kavango Basin of Namibia .
Founded in 2007, Seidel Technologies, a Denver based oil and gas drilling engineering firm, provides comprehensive project management for North American and International drilling operations. Since inception, Seidel Technologies, with over 42 staff, has worked with a wide array of successful oil & gas companies (from juniors to majors) in creating approximately $40 billion in asset value through drilling activities. Frank Seidel specifically, is an unconventional drilling expert having drilled over 3,000 wells domestically and internationally.
"Seidel Technologies, with their expertise and track record in successfully executing international drilling campaigns, is an excellent choice to work with ReconAfrica during its initial drilling of the Kavango Basin," stated Jay Park , CEO. "Further, the Company is working closely with Seidel Technologies to acquire North American drilling equipment specifically designed for logistics and drilling depths of the Kavango Basin."
ReconAfrica also announces that it has completed the first tranche (the "First Tranche") of its previously announced non-brokered private placement financing (the "Private Placement") through the issuance of 2,600,000 units (each, a "Unit") of the Company at $0.34 per Unit for aggregate gross proceeds of $884,000 . Each Unit is comprised of one common share of the Company and one common share purchase warrant (each, a "Warrant"), with each Warrant being exercisable into one common share of the Company at an exercise price of $0.50 per share until December 6, 2024 .
All securities issued under the First Tranche are subject to a four month and one-day restricted resale period expiring on April 7, 2020 in accordance with the policies of the TSX Venture Exchange and applicable securities laws. In connection with the First Tranche the Company paid, in aggregate, finder's fees of $8,185.50 in cash to (i) Echelon Wealth Partners Inc.; (ii) Leede Jones Gable Inc.; and (iii) PI Financial Corp., in respect of subscribers introduced to the Company by such finders.
The net proceeds of the Private Placement will be used by ReconAfrica to fund the Company's drilling program on its 6.3 million acre licensed property located in the Kavango Sedimentary Basin and for general working capital purposes.
The Company currently anticipates closing the second tranche of the Private Placement, through the further issuance of up to 1,811,765 Units for additional gross proceeds of up to $616,000 , prior to the end of December.
Securities Law Disclosure
Certain officers of the Company participated in the First Tranche by subscribing for 29,412 Units for gross proceeds of $10,000 . Accordingly, participation by insiders of the Company in the Private Placement constitutes a "related party transaction" under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company is exempt from the formal valuation requirement of MI 61-101 pursuant to Subsection 5.5(b) of MI 61-101. The Company is exempt from the minority shareholder approval requirement of MI 61-101 pursuant to Subsection 5.7(b) of MI 61-101. A material change report in respect of the First Tranche will be filed less than 21 days before closing of the First Tranche as the closing date and the participation by the related parties were not settled until shortly prior to closing and the Company wished to complete the First Tranche in an expeditious manner for sound business reasons.