VANCOUVER, BC, Oct. 26,
2023 /CNW/ - Reconnaissance Energy Africa Ltd. (the
"Company" or "ReconAfrica") (TSXV: RECO) (OTCQX: RECAF)
(Frankfurt: 0XD) is pleased to
announce that it has entered into a definitive agreement for the
sale of its Mexico operations.
Pursuant to a Share Purchase Agreement entered into between
Chame Energy Corporation ("Chame") and the Company (the
"Agreement"), Chame has agreed to purchase all of the issued and
outstanding shares of Renaissance Oil Corp. ("RenCan"), a
wholly-owned subsidiary of the Company. RenCan, through its
subsidiaries, owns all of the Company's assets in Mexico. The effective date of the Agreement is
October 25, 2023, with closing
subject to acceptance by the TSX Venture Exchange ("TSXV"). Chame
is not a Non-Arms Length Party of the Company, as defined in the
policies of the TSXV.
The deemed purchase price for the transaction is US$7,500,000. A wholly-owned subsidiary of RenCan
had provided a loan to RenCan in the amount of US$7,500,000. RenCan, in turn, provided a loan in
equal amount to ReconAfrica (collectively the "Inter-Company
Loans"). Pursuant to the Agreement, all Inter-Company Loans, and
any other inter-company loans between the Company and RenCan and
any of its subsidiaries, are deemed satisfied in full and terminate
upon closing without further recourse. In addition, under the
Agreement Chame will assume all debts of RenCan and its
subsidiaries, along with all present and future liabilities of
RenCan and its subsidiaries.
Under the terms of a finder's fee agreement between the Company
and Willem Veltman and Kevin Smith (collectively the "Finders"), the
Company is obligated to pay to the Finders the aggregate amount of
US$200,000 upon closing of the
transaction.
Chame is a private company owned and controlled by Edgar (Benny) De la Torre. Mr. De la Torre and
his family, through their group of Mexican companies, have been
providing oil field services in Mexico for over forty years.
Brian Reinsborough, President and
CEO of the Company stated "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."
About ReconAfrica
ReconAfrica is a Canadian oil and gas company engaged in the
opening of the newly discovered deep Kavango Sedimentary Basin in
the Kalahari Desert of northeastern Namibia and northwestern Botswana, where the Company holds petroleum
licences comprising ~8 million contiguous acres. In all aspects of
its operations ReconAfrica is committed to minimal disturbance of
habitat in line with best international standards and will
implement environmental and social best practices in all of its
project areas.
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 Note Regarding Forward-Looking Statements:
Certain statements contained in this press release constitute
forward-looking information under applicable Canadian, United States and other applicable securities
laws, rules and regulations, including, without
limitation, statements with respect to the closing date of the
transaction and the TSXV's acceptance thereof, the deemed
satisfaction of all Inter-Company Loans, the payment of a finder's
fee, the Company bringing in a joint venture partner and
executing its multi-well, high impact exploration program in
Namibia which is expected to
commence in Q1 of 2024, and the Company's commitment to
minimal disturbance of habitat in line with best international
standards and its implementation of environmental and social best
practices in all of its project areas. 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. There can be no assurance
that such statements will prove to be
accurate, as the Company's actual
results and future events could differ materially from those anticipated in these
forward-looking statements as a result of the factors discussed in
the "Risk Factors" section in the Company's annual information form
dated June 20, 2023, available under
the Company's profile at
www.sedarplus.ca. 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.