Reconnaissance Energy Africa (ReconAfrica) says it has raised N$133 million (US$7,475,000) from the successful completion of its overnight marketed offering of units to fund various projects as part of the company’s strategic growth plan.
The offering involved the sale of 6,795,454 units at a price of N$19.65 (US$1.10 per unit), each unit comprising one common share and one common share purchase warrant, granting investors the opportunity to acquire additional common shares at a fixed price until 18 July 2025.
“ReconAfrica is pleased to announce that it has completed its previously announced overnight marketed offering of units of the company for gross proceeds of $7,475,000, including the full exercise of the over-allotment option in the amount of (N$17m) $975,000,” said ReconAfrica CEO Scot Evans.
“The offering was completed by way of a short form prospectus filed in all of the provinces of Canada, except Québec and the Units were sold outside of Canada on a private placement basis,” he added.
The Canada-based oil and gas exploration company said net proceeds from the offering will be allocated to various projects that are part of Reconnaissance Energy Africa’s strategic growth plan.
“The net proceeds from the offering will be used for site preparation of a future drilling location, wellsite and rig maintenance, in addition to other geologic and subsurface projects, geophysical processing and working capital as outlined in the company’s final short form prospectus dated 12 July 2023,” said Evans.
The offering was made through two prominent underwriters in the Canadian market, Canaccord Genuity Corp. and Haywood Securities Inc.
“The underwriters, Canaccord Genuity Corp. and Haywood Securities Inc. received a cash commission equal to 6.0% of the gross proceeds from the offering, with a reduced commission of 3.0% for units sold to purchasers on the president’s list,” said the company.
Additionally, the underwriters were granted 295,227 compensation options, equivalent to 6.0% of the units sold under the offering (excluding those sold to purchasers on the president’s list).
“Each compensation option allows the holder to purchase one Unit at a price of US$1.10 until 18 July 2025. The underwriters also received an extra 1.0% cash compensation, except for units sold to purchasers on the president’s list, for which they received 0.5% cash as a corporate finance fee,” ReconAfrica noted.
In addition to the underwriters, directors and officers of the company also participated in the offering and collectively acquired 220,000 units.
“The offering is exempt from the formal valuation and minority shareholder approval requirements of 61-101 as neither the fair market value of the securities issued to related parties nor the consideration for such securities exceed 25% of the company’s market capitalisation,” Evans stated.
The securities issued in this offering have not been registered under the U.S. Securities Act of 1933, as amended, or any U.S. state securities laws.
Therefore, they may not be offered or sold in the United States or to U.S. persons absent registration or an applicable exemption from the registration requirements.
“After one year, any sale or offer of units (and component securities) within the United States or to U.S. persons, without proper registration or exemption, will violate U.S. Securities Act requirements. The company will not register any non-compliant transfers of such Units,” the company asserted.
Last week the company was granted an Environmental Clearance Certificate (ECC) to commence drilling 12 additional exploration and appraisal wells, to unrestricted depths, in the Kavango Basin.
The ECC, which is issued by the Office of the Environmental Commissioner in the Ministry of Environment, Forestry and Tourism, covers the entire PEL73 permit in northeast Namibia that stretches over 6.3 million acres (25,000 square kilometres).
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 north-eastern Namibia and north-western Botswana, where the Company holds petroleum licences comprising 8 million contiguous acres.
