RECONAFRICA ANNOUNCES THE FILING OF QUARTERLY FINANCIAL REPORTS

Rhea-AI Summary

Reconnaissance Energy Africa Ltd. announces financial results for Q4 2023, highlighting farmout joint venture process, sale of Renaissance Oil Corp., approval for Second Renewal Exploration Period, key land access approvals, organization streamlining, working capital of $8.9 million, global settlement agreement, and short form shelf prospectus for securities offering up to $120 million.

VANCOUVER, BC, March 1, 2024 /PRNewswire/ - Reconnaissance Energy Africa Ltd. (the "Company" or "ReconAfrica") (TSXV: RECO) (OTCQX: RECAF) (Frankfurt: 0XD) announces the filing of its financial results for the quarter ended December 31, 2023.

HIGHLIGHTS

• Re-initiated the farmout joint venture process in December 2023 with completion expected in April 2024. The bid deadline was extended to allow participating companies time to incorporate the updated resource report on the Damara Fold Belt currently being evaluated by Netherland, Sewell & Associates ("NSAI"), and expected to be completed in March 2024.
• Completed the sale of Renaissance Oil Corp., holder of the Mexican assets, for deemed gross proceeds of approximately $10.3 million (US$7.5 million), resulting in a gain on sale of $85.3 million and a reduction in net liabilities of $85.6 million.
• ReconAfrica and its joint venture partner the National Petroleum Corporation of Namibia ("NAMCOR") were granted approval for the Second Renewal Exploration Period by the Ministry of Mines and Energy ("MME"), which covers the period from January 30, 2024 to January 29, 2026. As part of the approval for the Second Renewal Exploration Period, the Company requested and has been granted a relinquishment exemption and has retained 100% of the original acreage.
• Received key land access approvals and completed the surveying, demining and debushing for Damara Fold Belt - Prospect L, which will be the first well to be drilled in the upcoming multi-well drilling program expected to commence in June 2024. Additional civil works are being undertaken including the construction of well site access roads, the drilling pad, and the tendering of key long lead oil services and equipment.
• Streamlined the organization resulting in the reduction of general and administrative expenses in Q4 2023 by 27% compared to Q3 2023 and by 32% compared to Q4 2022.
• Working capital of $8.9 million as of December 31, 2023, including $5.2 million in cash.
• As disclosed on February 28, 2024, the Company entered into a global settlement agreement to resolve all previously announced U.S. and Canadian class action lawsuits. The settlement is subject to coverage by the Company's insurers and, if approved, will not have any direct financial impact on the Company.
• Filed a short form shelf prospectus covering a 25 month period for the offering of securities of the Company in one or more series of issuances of common shares, warrants, subscription receipts, units or debt securities for proceeds of up to $120 million to fund the exploration and evaluation activities of the Company in the Kavango Basin.

Brian Reinsborough, President and CEO of the Company stated: "The Recon team had a productive quarter as we significantly advanced our understanding of the prospectivity of the Damara Fold Belt play, while at the same time advancing our joint venture process and preparing for drilling operations. Our technical team has increased our understanding of the oil potential of the Fold Belt play by integrating all available geochemical data and conducting additional basin modeling studies. This work is currently being evaluated by NSAI and we anticipate the revised resource report in early March. The revised report will also provide interested third party joint venture partners with an independent evaluation of the oil and natural gas potential in the Damara Fold Belt. We expect to wrap up our joint venture process in April. I recently visited Namibia where we met with multiple government agencies and ministers who expressed their appreciation and continued commitment to our project and the energy industry in Namibia. We would also like to pass along our deepest condolences to the people of Namibia on the passing of President Dr. Hage G. Geingob. While observing a period of national mourning, we were pleased to see the transition of power to be seamless and professional."

FILING UPDATE

The Company has filed its quarterly financial statements and management's discussion and analysis for the three and nine months ended December 31, 2023, on SEDAR+ at www.sedarplus.ca.

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 licenses comprising ~8 million contiguous acres. In all aspects of its operations ReconAfrica is committed to minimal disturbance of habitat in line with 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 timing and outcome of the Company's farmout joint venture process, the timing and outcome of the NSAI report, the commencement of drilling in June 2024, the Company's ability to procure necessary equipment and services for drilling, the approval and completion of a global settlement agreement to resolve class action lawsuits, and the issuance of securities under a shelf prospectus. 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 December 4, 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.

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SOURCE Reconnaissance Energy Africa Ltd.

FAQ

What are the key highlights of Reconnaissance Energy Africa Ltd.'s financial results for Q4 2023?

ReconAfrica re-initiated the farmout joint venture process, completed the sale of Renaissance Oil Corp., gained approval for the Second Renewal Exploration Period, received key land access approvals, streamlined the organization, and had a working capital of $8.9 million.

What was the gain on sale from the sale of Renaissance Oil Corp. by Reconnaissance Energy Africa Ltd.?

The gain on sale from the sale of Renaissance Oil Corp. by ReconAfrica was $85.3 million.

What is the working capital of Reconnaissance Energy Africa Ltd. as of December 31, 2023?

ReconAfrica's working capital as of December 31, 2023, was $8.9 million, including $5.2 million in cash.

What did Reconnaissance Energy Africa Ltd. file on SEDAR+ related to its financial results?

ReconAfrica filed its quarterly financial statements and management's discussion and analysis for the three and nine months ended December 31, 2023, on SEDAR+ at www.sedarplus.ca.

What does the global settlement agreement entered into by Reconnaissance Energy Africa Ltd. entail?

The global settlement agreement entered into by ReconAfrica is to resolve all previously announced U.S. and Canadian class action lawsuits, subject to coverage by the Company's insurers and with no direct financial impact on the Company if approved.