JOHANNESBURG, South Africa, July 18, 2024 -- In a milestone transaction, Reconnaissance Energy Africa (ReconAfrica) has divested a 20% working interest in Petroleum Exploration License 73 onshore Namibia to Oslo-listed oil and gas player BW Energy. The African Energy Chamber (AEC) (www.EnergyChamber.org) – as the voice of the African energy sector – supports this new joint venture structure which promises to accelerate exploration activities in Namibia and mobilize working capital, with a total potential consideration of $141 million.

ReconAfrica is currently driving exploration of the onshore Kavango Basin, where it recently spud the Naingopo-1 well targeting the Damara Fold Belt and plans to drill a multi-well exploration program and acquire a 3D seismic program in the Kavango Rift Basin. The company has conducted extensive data and insights into the working petroleum system of the Kavango Basin to help de-risk exploration and identify future drilling targets. As a result of the transaction, BW Energy will participate in two Damara Fold Belt exploration wells and the 3D seismic program, with the option to participate in two Rift Basin exploration wells over a two-year period. ReconAfrica will retain a 70% working interest in the license, ensuring significant upside for the company if a discovery is made.

The deal leverages BW Energy's existing expertise in oil and gas monetization in emerging and mature markets. The company is already active in Namibia through an operated stake in the 1.3-trillion-cubic-feet Kudu gas field in the Orange Basin and associated Kudu gas-to-power project, which is currently in its FEED stage and anticipates FID in 2025. The project is set to transform Namibia's energy matrix through the delivery of 800 MW of gas-fired power for domestic use and regional export. BW Energy also operates the Dussafu Marine license offshore Gabon, home to the Hibiscus and Ruche Field Development set to reach 40,000 barrels per day following the completion of all wells.

The Chamber commends BW Energy for expanding its footprint in exploration hotspots like Namibia and betting on Africa's upstream landscape. The agreement – which includes a $16 million equity investment in ReconAfrica and an additional $45 million in carry payments based on FID – is set to accelerate onshore exploration activities and is the latest in a series of transactions affirming global interest in Namibia's oil and gas resources. With BW Energy to start drilling at the Kudu gas project in early-2025 – coupled with recent discoveries by Shell, TotalEnergies and Galp in the offshore Orange Basin – Namibia is preparing to witness another wave of investment from global explorers.

"ReconAfrica and BW Energy are working together to unlock Africa's untapped onshore resources, combining financial resources and technical expertise to drive high impact exploration programs. The Chamber supports this strategic deal, which solidifies Namibia as an investor-friendly destination and is a major step forward for the African upstream industry at-large," says NJ Ayuk, Executive Chairman of the AEC.