ReconAfrica Resumes KW1X Operations Ahead of Horizontal Test in Strong Oil Market

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1. Ownership and Share Structure Information

The information listed above was updated on the date this article was published and was compiled from information from the company and various other data providers.

Reconnaissance Energy Africa Ltd. (RECO:TSXV; RECAF:OTCQX; 0XD:FSE) announced that it has resumed operations at the Kavango West 1X (KW1X) sidetrack well in Namibia ahead of a planned horizontal flow test, with flow test samples indicating thermogenic gas with liquids potential, according to a September 28 release.

Back on Site at Kavango

The company reported that samples from the Huttenberg and Elandshoek formations indicate thermogenic gas with maturity ranging from late oil to early gas. The Jarvie-1 rig has returned to the site, with horizontal drilling targeted for October, subject to approvals, followed immediately by flow testing. The horizontal wellbore design targets up to 1,000 meters to intersect natural fractures.

In Angola, preliminary soil sampling on MOU acreage suggests an active thermogenic petroleum system with liquid content potential, similar to the Namibian plays. In Gabon, 3D seismic reprocessing at the Ngulu block is on track for completion by year-end, with a concurrent resource report planned and appraisal well planning underway for the Loba oil discovery.

What the Horizontal Test Must Prove

The vertical test results highlight a liquid-capable system, with the upcoming horizontal test intended to establish sustained flow rates, measure liquid yields, and assess formation pressure response. Equipment is on site or in transit, permits have been filed, and the well will be completed open hole to maximize flow from fractures and porosity zones.

CEO Brian Reinsborough noted the test is essential for advancing toward a final investment decision at the Kavango discovery and evaluating 22 mapped structures on the Namibian license. Angola results point to vertical migration from deep accumulations, with potential 2D seismic in 2027. Gabon reprocessing uses full waveform inversion to illuminate reservoirs, supporting high-impact pre-salt and post-salt prospects near existing infrastructure.

First Gas, Now the Real Test

The horizontal test follows a milestone at KW1X in July, when the well flowed natural gas to surface from the uppermost zone of the Elandshoek formation across three flow tests, which the company called "the first hydrocarbons ever produced to surface onshore Namibia," according to a July 16 release. The well flowed for about 24 hours in total, with tubing pressures reaching 2,300 pounds per square inch, but equipment limitations in the vertical wellbore prevented accurate flow-rate measurements. 

In August, the uppermost zone of the Huttenberg also flowed natural gas and potential liquids to surface immediately upon perforation, ahead of acid stimulation, according to an August 17 release.

Flow rates again could not be measured because of equipment limitations, which the company said have since been addressed. Well logs identified 76 meters of net hydrocarbon pay within a 182-meter section of the Huttenberg formation, the zone the horizontal lateral is now designed to target.

ReconAfrica funded the program with a bought-deal public offering that closed September 10, raising gross proceeds of CA$21.85 million after the underwriters fully exercised their over-allotment option, the company announced. The company sold about 29.9 million units at CA$0.63 each, with each unit consisting of one share and half a warrant exercisable at CA$0.79 until September 10, 2029. Research Capital Corp. led the syndicate, which included Canaccord Genuity Corp. and ATB Cormark Capital Markets. ReconAfrica said the proceeds will fund the open-hole horizontal sidetrack and production testing program targeting the Huttenberg formation, as well as general corporate purposes and working capital.

Crude Holds High as Inventories Drain

As of late September, global oil markets remain supported by falling inventories and Middle East supply risks. North Sea Dated Brent crude averaged US$91 per barrel in August before surging to US$113.48 per barrel on September 9 amid supply disruptions in the Middle East and Russia, according to the International Energy Agency's (IEA) September Oil Market Report. The IEA said backwardation reached extreme levels as crude markets tightened, while the widening gap between crude and refined product prices, particularly diesel, pushed refinery margins to record levels in the Atlantic Basin.

West Texas Intermediate (WTI) crude traded at about US$94 per barrel on September 29, while U.S. natural gas held near US$3.12 per million British thermal units, FXEmpire reported. FXEmpire maintained a bullish bias on both crude and natural gas, noting that LNG shipments from Qatar have fallen 96% since the crisis began a year ago.

The U.S. Energy Information Administration (EIA) expects Brent to average about US$90 per barrel in the second half of 2026 as global oil inventories keep falling through year-end, according to its September Short-Term Energy Outlook. The agency forecasts prices will then gradually decline to an average of about US$74 per barrel in 2027 as production rises and inventories rebuild. These conditions provide a constructive backdrop for exploration and appraisal activity in emerging basins.

The Test That Could Move the Stock

Research Capital Corp. maintained a Speculative Buy rating on ReconAfrica and lowered its target to CA$3.80 from CA$4.40 after operations resumed at the KW1X discovery in Namibia, according to an updated research note by analyst Bill Newman on September 28. The Jarvie-1 rig is removing casing ahead of setting a whipstock at about 2,500 meters, with equipment procured or in transit and regulatory amendments submitted. Horizontal drilling could begin in October, subject to approvals and equipment arrival. ReconAfrica also raised CA$21.85 million through a September 10 bought-deal financing to fund KW1X and its broader portfolio.

Lab testing from the Huttenberg and Elandshoek formations identified thermogenic gas with liquid potential, ranging from late-oil to early-gas maturity. While the results suggest potential for condensate/NGLs, the composition and volume remain unconfirmed. ReconAfrica plans an open-hole lateral of up to 1,000 meters through the upper Huttenberg, followed by an initial flow test before acid washing to assess natural reservoir productivity, sustained deliverability, liquid yield, and pressure response.

Research Capital Corp. maintained a Speculative Buy rating on ReconAfrica.

The company also reported progress in Angola and Gabon. Angola soil sampling indicates a working thermogenic petroleum system with liquid potential, while a 2D seismic program could begin in 2027.

In Gabon, 3D seismic reprocessing at Ngulu remains on track for completion before year-end, alongside resource work and planning for a Loba appraisal well. Research Capital views the KW1X restart and gas-with-liquids results positively but said commerciality remains unproven, making the upcoming horizontal flow test the key catalyst. Its CA$3.80 target is based on a risked valuation of Kavango West and Loba.

In a sector update on August 21, Auctus Advisors noted, "The KW1X onshore Namibia has flowed natural gas and potential liquids to surface from two separate zones (the upper Huttenberg and the Upper Elandshoek). The next stage of success-based testing is to proceed with an open-hole horizontal production test in the uppermost zone of the Huttenberg formation."

Key Investor Takeaways

• ReconAfrica resumed operations at KW1X after flow test samples indicated thermogenic gas with liquid potential. Horizontal drilling is targeted for October, subject to approvals.
• The planned lateral of up to 1,000 meters through the upper Huttenberg will be completed with an open hole. It is designed to measure sustained flow rates, liquid yield, and formation pressure response, which management calls essential for moving toward a final investment decision.
• The test builds on July and August results, when KW1X flowed gas to surface from both the Elandshoek and the upper Huttenberg. KW1X produced what the company called the first hydrocarbons ever brought to surface onshore Namibia, and logs identified 76 meters of net pay in the Huttenberg.
• ReconAfrica raised CA$21.85 million in a September 10 bought-deal financing to fund the horizontal sidetrack and production testing program.
• Research Capital Corp. maintained its Speculative Buy rating and cut its target to CA$3.80 from CA$4.40. It is called the horizontal flow test the key catalyst, and said commerciality remains unproven.
• Angola soil sampling points to an active thermogenic petroleum system similar to Namibia's, with 2D seismic possible in 2027. In Gabon, seismic reprocessing at Ngulu is due by year-end, alongside a resource report and Loba appraisal well planning.
• Oil markets remain tight. Brent averaged US$91 per barrel in August, and the EIA expects about US$90 for the second half of 2026 before prices ease to about US$74 in 2027.

  Streetwise Ownership Overview*

  Reconnaissance Energy Africa Ltd. (RECO:TSXV;RECAF:OTCQX;0XD:FSE)

  Restructures A stock restructure (or capital restructure) in the context of stocks generally refers to a broader set of corporate actions that change a company's capital structure–the mix of debt and equity, or the way shares are organized and distributed. This can include changes to the number of shares outstanding, share classes, or ownership proportions.

  Date	Old Symbol	Old Shares	New Symbol	New Shares
  02/28/20	LGDOF:OTCQX	1	RECAF:OTCQX	1
  10/03/19	LGDOD:OTCQX	1	LGDOF:OTCQX	1
  09/06/19	LEN:TSX.V	2	RECO:TSX.V	1
  12/19/13	LGD:TSX.V	10	LEN:TSX.V	1
  07/10/03	LUV.T:TSX.V	2	LGD:TSX.V	1
  12/11/02	LUV:TSX.V	1	LUV.T:TSX.V	1
  05/28/01	MCE:TSX.V	5	LUV:TSX.V	1
  07/08/98	CFG:TSX.V	1	MCE:TSX.V	1

  ^*Share Structure as of 9/29/2026

Ownership and Share Structure¹

About 0.76% of the company is owned by insiders and management, including Reinsborough, with 0.29%. About 6.2% is held by BW Energy Ltd. (BWE:OSE; BWEFF:OTCQX). The rest is in institutional (0.03%) and retail.

ReconAfrica's market cap is CA$232.5 million with 386.67 million shares outstanding. It trades in a 52-week range of CA$0.42 and CA$1.35.

Common Questions from Investors

What does the latest KW1X update mean for ReconAfrica?

The rig is back on site, and lab results indicate thermogenic gas with liquid potential. The company is now preparing a horizontal flow test aimed at producing the first sustained flow-rate and liquid-yield data from the Kavango discovery. That data could help de-risk it and inform the potential of 22 structures mapped on the Namibian license.

Why is a horizontal test needed?

In July and August, the vertical well flowed gas to surface from the Elandshoek and upper Huttenberg formations, but equipment limitations prevented accurate flow-rate measurements. The horizontal lateral is designed to intersect natural fractures in the upper Huttenberg, where logs identified 76 meters of net pay. It will be completed with an open hole to maximize flow.

What are the next steps in Namibia?

The rig will set a whipstock at about 2,500 meters and drill a lateral of up to 1,000 meters starting in October, subject to approvals and equipment arrival. Drilling is expected to take about a month, and flow testing will follow immediately.

What do analysts say?

Research Capital's Bill Newman maintained a Speculative Buy rating with a CA$3.80 target, down from CA$4.40. He said the upcoming horizontal test is the key catalyst because commerciality remains unproven.

Auctus Advisors described open-hole horizontal production testing in the uppermost Huttenberg as the next stage of success-based testing.

How does the oil market environment affect the company?

The EIA expects Brent to average about US$90 per barrel in the second half of 2026 as global inventories keep falling, before prices ease to about US$74 in 2027. Tight supply and elevated prices support the economics of exploration and appraisal in frontier basins like those in Namibia, Angola, and Gabon.