Reconnaissance Energy Africa Ltd (TSX-V:RECO, OTCQX:RECAF) has closed a C$20.4 million underwritten offering, giving the Canadian oil and gas explorer fresh funding for drilling and exploration in Africa.
The Calgary-based company, known as ReconAfrica, sold units priced at C$0.60 each.
Every unit included one common share and one warrant, which allows holders to buy another share at C$0.72 until September 2027.
The warrants are expected to begin trading on the TSX Venture Exchange under the symbol “RECO.WT.B” around October 3.
Research Capital Corp acted as lead underwriter and bookrunner, alongside Canaccord Genuity and Haywood Securities.
The offering included the exercise of an overallotment option, which increased the final size.
Net proceeds will go toward projects in Namibia, Angola and Gabon, as well as general corporate purposes. In Gabon, the company plans to use part of the funding for seismic studies and reprocessing of 3D data on its Ngulu offshore block.
Chief executive Brian Reinsborough said the financing will support ReconAfrica’s “high-impact drilling program focused on the highly anticipated Kavango West 1X well in Namibia” and help move forward its new business plan in Gabon.
The offering was completed through a prospectus supplement filed in Canada, with units also sold outside the country through private placement.
Some company insiders bought 18,400 units, a transaction exempt from minority shareholder approval rules as it represented less than 25% of ReconAfrica’s market capitalisation.
The underwriting syndicate received a 6% cash commission on most of the proceeds, amounting to about C$1.1 million, as well as nearly 1.75 million broker warrants. An additional advisory fee of C$56,500 and 34,500 advisory warrants were also paid out.
The company also announced that Mark Friesen will become vice president of investor relations and capital markets on October 1.
ReconAfrica is exploring oil and gas potential in Namibia, Angola, Botswana and Gabon, covering about 13 million acres. The company says it is committed to minimising environmental impact and applying international best practices across its operations.