/NOT FOR DISSEMINATION OR DISTRIBUTION IN OR INTO
THE UNITED STATES OF AMERICA OR TO
ANY PERSON LOCATED OR RESIDENT IN THE
UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS,
ANY STATES OF THE UNITED STATES OR
THE DISTRICT OF COLUMBIA./
VANCOUVER, Feb. 4, 2020 /CNW/ - Reconnaissance Energy Africa
Ltd. (the "Company" or "ReconAfrica") (TSX-V: RECO) (OTC: LGDOF)
(Frankfurt: 0XD) is pleased
to announce it has entered into a binding Asset Purchase Agreement
with Henderson Rigs (Houston) for
the acquisition of a Crown 750 drilling rig.
The initial cost of the rig is US$1.8
million of which the Company has provided Henderson Rigs
with a non-refundable deposit of US$450,000 with the balance of US$1.35 million payable on or before February 10, 2020. Shortly thereafter, Henderson
Rigs will outfit the Crown 750 with a best-in-class top drive
system (for faster drilling rates) and ancillary equipment to
acclimate the rig for drilling in the Kalahari Desert. These
incremental improvement costs will be approximately US$1.2 million. Therefore, all-in costs when the
rig is ready to transport will be approximately US$3 million.
The Crown 750 was US manufactured and never been used. The rig
is 1000 Horsepower equipped with two CAT 540 Horsepower Diesel
engines, combined with a 440,000 pound hook load. Consequently the
rig is rated to drill 12,000 vertical feet. Further details and
specifications of the Crown 750 are posted on the Company's
website, www.ReconAfrica.com.
As a result of comprehensive discussions with international
drilling contractors, management concluded the acquisition of a
company-owned rig is approximately 45% of the cost of hiring an
international drilling contractor for its Namibian project.
Further, by acquiring a rig located in Houston, there are significant time and cost
benefits as the rig will be shipped directly by sea from the Port
of Houston to the Port of Walvis
Bay, Namibia. Once in Walvis Bay
the rig will be transported over land by way of the paved highway
directly to the Company's Kavango Basin license area in
NE Namibia. It is anticipated the
rig will be on the first drilling location in the Kavango Basin by
the second half of June.
"Of all the rigs we inspected, the Crown 750 has always been our
number one choice," stated Frank
Seidel, President of Seidel Technologies. "With
ReconAfrica's emphasis on quality equipment and experienced people,
I'm confident we can meet the Company's drilling objectives in the
Kavango Basin, on time and within budget."
The primary objective of ReconAfrica's initial three well
program is to penetrate key source rocks within the Karoo
Supergroup providing evidence of an active petroleum system
throughout the Kavango Sedimentary Basin. Secondary objectives are
to assess oil and gas prone conventional targets.
"We were able to acquire this high-quality rig at a significant
discount of the cost to build, as it is truly a buyer's market,"
stated Jay Park, CEO ReconAfrica.
"This rig is very well suited to execute the Company's initial
program of drilling, logging and coring three deep wells in the
Kavango Sedimentary Basin this year."
As to the prospectiveness of the Kavango Basin, Bill Cathey CEO
and Chief Geoscientist of Houston-based Earthfield Technologies and a
member of the Company's Technical Advisory Team affirmed that, "in
my experience, I haven't seen a basin this deep anywhere in the
world, that hasn't produced commercial quantities of
hydrocarbons."
ReconAfrica is a junior oil and gas company engaged
in the development of the newly discovered Kavango Sedimentary
Basin, in northeast Namibia, where
the Company holds a 90% working interest in petroleum
licenses comprising approximately 6.3 million contiguous
acres.
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this
release.
Cautionary Statements
Certain statements
contained in this press release constitute forward-looking
information. These statements relate to future events or future
performance. The use of any of the words "could", "intend",
"expect", "believe", "will", "projected", "estimated" and similar
expressions and statements relating to matters that are not
historical facts are intended to identify forward-looking
information and are based on ReconAfrica's current belief or
assumptions as to the outcome and timing of such future events.
Actual future results may differ materially. Various assumptions or
factors are typically applied in drawing conclusions or making the
forecasts or projections set out in forward-looking information.
Those assumptions and factors are based on information currently
available to ReconAfrica. The forward-looking information contained
in this release is made as of the date hereof and ReconAfrica
undertakes no obligation to update or revise any forward-looking
information, whether as a result of new information, future events
or otherwise, except as required by applicable securities laws.
Because of the risks, uncertainties and assumptions contained
herein, investors should not place undue reliance on
forward-looking information. The foregoing statements expressly
qualify any forward-looking information contained herein.
SOURCE Reconnaissance Energy Africa Ltd.