Canadian oil and gas company Reconnaissance Energy Africa (ReconAfrica) has announced that it will increase its participating interest in Namibia’s Petroleum Exploration License 73 in the Kavango Basin. ReconAfrica has signed a letter of intent with the National Petroleum Company of Namibia (NAMCOR) which will see the company acquiring 5% of NAMCOR carried participating interest, thereby strengthening the company’s presence in Namibia’s key onshore basins.

The acquisition will comprise five million common shares – dubbed consideration shares which will be subject to a hold period of four months and one day – and $2 million in cash. According to the Letter of Intent, both parties will enter into a mutually acceptable agreement – which includes all documents related to the transaction – by February 17, 2022, with the transaction closure expected on or before March 30, 2022 – pending regulatory approvals.

The agreement will be critical, both for the company as it moves to expand its presence in Namibia, and for the country as it accelerates exploration and production across key basins.

“We are delighted to enter into this strategic and mutually beneficial transaction with ReconAfrica,” stated Immanuel Mulunga, Managing Director of NAMCOR, adding that “The transaction, is not only less onerous but adds significant strength to NAMCOR’s balance sheet, as well as provides NAMCOR with exposure to the entire Kavango sedimentary basin in Namibia and Botswana. We have the utmost confidence in ReconAfrica as the Company has proven to be a responsible operator in our country with an excellent track record in the performance of its work obligation.”