The last great oil discovery onshore could unfold in the next few weeks, and it’s been hiding right under the noses of the supermajors.
This is a sponsored article from Oilprice.com
It’s all because of a treasure trove of government-held data that very few even knew existed.
And it could lead to the most exciting oil discovery since the Permian Basin, the massive basin in Texas which is estimated to hold 46.3 billion barrels..
But today, this property overlooked by the majors lies untouched halfway around the world…
And at a mammoth 8.5 million acres, this basin spans an area even greater than many of the richest discoveries in the Lone Star state.
But now, one junior oil company most folks have never heard of has acquired the rights to the entire thing.
Recently, oil majors have been flocking to Africa since it’s among the last underexplored areas on Earth…
And with low production costs in the region, that’s led to lucrative opportunities that have helped put countries like Suriname and Guyana on the proverbial map.
That’s why Bloomberg is touting, “Africa Enjoys Oil Boom as Drilling Spreads Across Continent.”
But while companies like Shell and Exxon have latched onto offshore opportunities in the one of the continent’s most stable and friendliest governments…
They completely missed the Namibian government’s treasure trove of data, including valuable high quality aeromagnetic survey data that had never been interpreted.
And when this junior discovered what the government had in their data bank.
They scooped up the entire Kavango Basin, giving them exclusive petroleum licenses to a property that’s millions of acres in size.
This is truly the final frontier of oil exploration, among the last Permian-sized basins that’s never been drilled.
And it’s opportunities just like these that have produced incredible gains in recent years for other explorers that made a discovery.
Africa Oil scored 379% gains after discovering oil in Kenya.
Valeura Energy Corp’s shares skyrocketed for 1,000% gains after a discovery in Turkey.
Now in Namibia, ReconAfrica is already up 391% in less than a year on speculation that a discovery may be here too.
But at the moment, shares are still trading for under $2.
And if they see the kinds of results some experts are anticipating now that drilling has begun, we could see another junior explorer hitting real success.
Here’s why you should be keeping a close eye on Reconnaissance Energy Africa.
Validation from the Biggest Names in the Oil Industry
The Kavango Basin is an enormous untapped area spanning millions of acres across Namibia and Botswana.
And at 8.75 million acres, that’s nearly the size of the massive Midland Basin in the Permian, which is owned by countless different producers today.
So for this vast area to be completely owned by one company is almost unheard of, especially for a junior with a market cap of just $200 million.
That means the upside for this opportunity is unlike most we’ve seen in a decade.
And what they discovered was shocking.
This data showed that the sedimentary basin could run as deep as 30,000 feet.
That would make it as deep as the Permian Basin in West Texas, which has been estimated to contain 46.3 billion barrels of oil.
And the most exciting part is that the majority of this potential production is expected to be conventional.
So unlike the unconventional shale plays of the last few years, where producers end up spending a fortune in production to tap the last few drops of a dry super basin…
ReconAfrica is focused on finding conventional plays with the untouched fields of the massive Kavango basin.
That means no expensive hydraulic fracturing… Lower costs for water during drilling… And much, much lower cost per barrel.
Which all adds up to greater potential for profits for Recon Africa and their investors, if a major discovery is made.
Plus, while digging deeper into the data, world-class geological interpreter Bill Cathey said it showed some of the best data he’d ever seen…
And that “nowhere in the world is there a sedimentary basin this deep that has not produced commercial quantities of hydrocarbons.”
That’s incredibly promising coming from the geological interpreter to the supergiants.
So just how much oil could this untapped property hold?
Sproule, a tier-1 resource assessment company, put out an estimate in July that we could be looking at up to 18 billion barrels.
With oil prices rising and Namibia boasting one of Africa’s lowest royalty rates for oil producers…
This kind of discovery could mean a massive payday for an undervalued company like Recon Africa.
They’ve called on Daniel Jarvie, president of Worldwide Geochemistry LLC, to analyze the data as well, giving them a clearer look at just how rich this virgin play could be.
Jarvie is one of the world’s most respected geochemists, being named “Hart Energy’s Most Influential People for the Petroleum Industry in the Next Decade” in 2010.
And he’s estimated that if all goes well in the Kavango Basin, ReconAfrica could be sitting on a basin that could generate up to 120 billion barrels of oil…
Based on only 12% of their holdings.
While numbers like this may seem hard to believe, Jarvie actually said this could be a conservative estimate.
And he’s stated, “Given the nature of the basin and the tremendous thickness, this is pretty much a no brainer…It will be productive and I’m expecting high-quality oil.”
Recently, Haywood Securities raised their short term price target for ReconAfrica from $2.50 per share to $4…
Which would be a double for investors if the target is reached on positive news in the coming weeks.
But with world-class geophysicists and geochemists making such ringing endorsements and the low production costs in the region…
That’s a major driver behind ReconAfrica’s net asset value (NAV) per share
At the moment, they’re still trading at just over $2.
And given the confidence in what they’re seeing in the Kavango Basin so far…
ReconAfrica is rushing to move on this high impact opportunity as fast as they can.
Within Just Weeks of Breaking Exciting News
Nick Steinberger, for example, has also joined ReconAfrica’s team as their Senior Vice President, Drilling and Operations.
After spending over 30 years helping to lead an oil and gas company that was sold for an incredible $3.1 billion, he could have gone wherever he liked in the industry.
So to have someone of his caliber on the team speaks volumes about how confident many are in the future of their drilling program. The entire management team are also shareholders
That’s because he’s seeing countless similarities between the Kavango and the Permian basin, noting, “It’s the same setting, the same geological time frame, and looks like the same type of thickness.
“The top of the Permian section of Kavango is expected to be 6,000-8,000 feet in depth, which is the same as the Permian in Texas.”
Plus, ReconAfrica just got more validation from one of the world’s most respected resource consulting companies, Wood Mackenzie.
They identified one of the best comparisons to the Kavango as the Midland Basin, within the Permian in Texas.
With the overall development value of the Midland Basin being an estimated $540 billion, this could spell big news for ReconAfrica if all goes according to plan…
Especially considering they’re currently sitting at a market cap of just $200 million.
Now, the excitement is building as ReconAfrica’s rig has arrived onsite and drilling has already begun.
If they do make the massive discovery many are expecting, it could mean a huge payday because of Namibia’s oil-friendly government.
And after completing their first well spud, they’ll move on quickly on to their next two wells.
They’re expected to complete drilling at the first well within 45 days.
And from there, they could receive drilling results within weeks.
That means that unlike many other oil exploration plays, this isn’t a long “wait-and-see” situation.
They’ve set themselves up perfectly in one of the highest upside plays in the industry.
And with other supermajors like Exxon and Shell just down the road, it could easily set them up to become an acquisition target, bringing the potential for a rich sellout deal.
But with this story unfolding quickly, investors are keeping a close eye on ReconAfrica…
As news in the coming weeks could break possibly the start of the most exciting oil story of the last decade.
The Last Word
- They beat the majors to scoop up this 8.5 million acre holding in the Kavango Basin, making it nearly the size of the entire country of Switzerland.
- World-class geological interpreter is calling the data among the best he’s seen and that “nowhere in the world is there a sedimentary basin this deep that does not produce commercial quantities of hydrocarbons.”
- According to legendary geochemist Daniel Jarvie, “Given the nature of this basin and the tremendous thickness, this is pretty much a no-brainer… It will be productive and I’m expecting high-quality oil.”
- Estimates show the Kavango Basin could have generated up to an incredible 120 billion barrels of oil.
- The highly-regarded Wood Mackenzie says one of the closest comparisons could be the Midland Basin, which is worth an estimated $540 billion. That spells massive potential for ReconAfrica, sitting at a market cap of just over $200 million
- Shares are already up 391% in less than a year.
- Drilling has already begun, and major news could break in just the next few weeks.
Here are a few other companies branching out to capture new opportunities in untapped environments:
By. Jeff Black
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