Reconnaissance Energy Africa Ltd (TSX-V:RECO, OTCQX:RECAF) has announced an increase in the size of its underwritten public offering to C$16.5 million due to strong investor demand.
The offering, originally launched as an overnight marketed deal, will now consist of 33 million units priced at C$0.50 per unit.
The proceeds from the offering will be allocated toward exploration activities, working capital, and general corporate purposes.
The main use of funds will be for the drilling of Prospect I, designated the Kavango West 1X well. Preparatory work, including road and site access, is already underway, and the rig is expected to move to the site by late June. Drilling is scheduled to commence shortly after permit approvals are finalized.
The upsized offering is being led by Research Capital Corporation, acting as lead underwriter and sole bookrunner, with support from Canaccord Genuity and Haywood Securities as part of the underwriting syndicate.
The company has received lead order indications totaling over C$4 million from BW Energy, members of ReconAfrica’s management and board, and other investors.
BW Energy’s approximately C$2 million strategic follow-on investment under this offering reinforces its existing partnership with ReconAfrica and includes a six-month lock-up agreement on the acquired units.
Each unit in the offering includes one share and one warrant, with each warrant entitling the holder to purchase an additional share at C$0.60 within 24 months of closing. The company intends to list the warrants on the TSX Venture Exchange.
The offering includes a 15% overallotment option, exercisable by the underwriters for up to 30 days following closing, which is expected to occur during the week of June 16.