ReconAfrica Targets Kilometer-Long Horizontal Well at Namibia's KW1X Discovery

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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.

• ReconAfrica has received all required permits and begun horizontal sidetrack drilling at its KW1X discovery well in Namibia, with flow test results expected before year-end.
• The sidetrack targets up to 1,000 meters in the upper Huttenberg formation and could cross thousands of natural fractures, with an open-hole completion designed to maximize flow.
• Flow testing will take place before any acid wash and is meant to establish sustained flow rates, reservoir pressure response, and liquids yield and composition.
• Vertical testing flowed natural gas and potential liquids to surface from two separate zones. The company said a successful horizontal flow test would support drilling an appraisal well about 4 kilometers away, which, if successful, would lead to reserve bookings and a final investment decision.
• Research Capital analyst Bill Newman reiterated his Speculative Buy rating and CA$3.80 target price on October 19.
• Brent crude is trading above US$100 per barrel, and OPEC expects global oil demand to grow by 2.6 million barrels per day in 2027.

Reconnaissance Energy Africa Ltd. (RECO:TSXV; RECAF:OTCQX; 0XD:FSE) announced it has resumed drilling at its Kavango West 1X (KW1X) well in Namibia, with flow test results expected before year-end, according to an October 19 release. ReconAfrica is working alongside its partners, BW Energy Ltd. (BWE:OSE; BWEFF:OTCQX), which has a 20% working interest, and the National Petroleum Corporation of Namibia (NAMCOR), which has a 10% carried working interest.

The partnership has received all the permits it needs to resume horizontal drilling and flow testing, including the Environmental Clearance Certificate and an amendment to the horizontal drilling permit, the company said. With those final approvals in hand, the whipstock has been set, and sidetrack drilling has begun.

Production casing was removed down to a vertical depth of 2,289 meters, where the open-hole whipstock was set, according to the release. The sidetrack is expected to take about one month to drill and is designed to reach a horizontal wellbore of up to 1,000 meters in the upper zone of the Huttenberg formation. The goal is to intersect the natural fractures across the Kavango structure, and the company said the horizontal section could cross thousands of vertical or near-vertical fractures.

The well will be completed with an open hole, without casing or cement, to maximize flow from the natural fracture system. Flow testing will begin right after completion, once the wellbore has been swabbed to clear drilling mud and cuttings, but before any acid wash, ReconAfrica said. The test is meant to establish sustained flow rates, reservoir pressure response, and the yield and composition of liquids in the production stream, and more fluid and gas samples will be sent for lab analysis. Testing could take up to a month.

The horizontal program follows vertical production testing at KW1X, where zone testing began on June 8. In July, the company reported that the uppermost of three zones tested in the Elandshoek formation flowed hydrocarbons to surface, before it moved up hole to test three zones in the shallower Huttenberg. Those three zones covered 182 meters of reservoir section, including 76 net meters of hydrocarbon pay identified on well logs.

In August, ReconAfrica said natural gas and potential liquids had flowed to surface from two separate zones at KW1X, completing vertical testing. The company described those results as preliminary. It said a successful horizontal flow test would support drilling an appraisal well about 4 kilometers away, and that a successful appraisal well would lead to reserve bookings and a final investment decision on its emerging Damara Fold Belt play.

In August, ReconAfrica said natural gas and potential liquids had flowed to surface from two separate zones at KW1X, completing vertical testing. The company described those results as preliminary and said confirming them with a horizontal flow-rate test would ultimately support resource and reserve bookings and a final investment decision on its emerging Damara Fold Belt play.

ReconAfrica operates Petroleum Exploration Licence 73 (PEL 73) with a 70% working interest. It completed its farm-down to BW Energy in January 2025, under a deal ReconAfrica valued at up to US$141 million in total potential consideration, including a US$16 million equity investment and US$45 million in carry payments tied to a final investment decision.

ReconAfrica holds petroleum licenses and access to about 13 million contiguous acres in northeastern Namibia, southeastern Angola, and northwestern Botswana. It also operates the Ngulu block in shallow waters offshore central Gabon, which covers 1,214 square kilometers and includes the Loba oil field discovery.

Research Capital Corp. analyst Bill Newman reiterated his Speculative Buy rating and CA$3.80 target price on ReconAfrica in an October 19 note, implying a 578.6% return from the CA$0.56 share price at the time.

Newman said the company "has now cleared the remaining regulatory hurdles and commenced the critical horizontal drilling program at KW1X."

 Research Capital Corp. analyst Bill Newman reiterated his Speculative Buy rating and CA$3.80 target price.

Earlier vertical tests showed natural hydrocarbon flow from the Huttenberg and Elandshoek formations, but did not establish commercial production rates, he noted, and the horizontal well should intersect substantially more natural fractures.

"A sustained commercial flow rate, particularly with meaningful liquids content, would materially de-risk the discovery and support follow-up appraisal drilling at KW2A," he wrote. "However, the key uncertainty remains whether the naturally fractured carbonate reservoir can sustain commercial production rates."

Newman's target reflects his risk valuation of Kavango West in Namibia and the Loba oil field in Gabon. Beyond the KW1X flow test, he expects a Gabon 3D seismic reprocessing and resource report by year-end and a possible Angola 2D seismic program in 2027.

ReconAfrica's horizontal test comes with oil above US$100 per barrel. Brent crude traded around US$108 on October 19 after climbing near US$110 last week, as Iranian attacks on tankers cut average daily oil flows through the Strait of Hormuz to 11.62 million barrels in the week to October 13, from a baseline of 17.15 million, according to Kpler shipping data. A year ago, Brent traded near US$62.71.

In its October report, OPEC raised its 2027 demand growth forecast to 2.6 million barrels per day from 2.4 million, citing the need to rebuild inventories drawn down during the Iran war. That would lift world demand from 105.7 million barrels per day this year to 108.3 million in 2027, with supply growth outside OPEC+ of just 600,000 barrels per day.

In Namibia's offshore Orange Basin, 18 exploration wells over the past four years have yielded 14 discoveries, according to Wood Mackenzie, which projects that the Venus, Mopane, and Capricornus discoveries could lift the country's liquids output above 400,000 barrels per day in the 2030s. That would make Namibia sub-Saharan Africa's third-largest oil producer after Nigeria and Angola.

ReconAfrica's market cap is CA$232.94 million with 415.96 million shares outstanding. It trades in a 52-week range of CA$0.42 and CA$1.35.

What did ReconAfrica announce on October 19, 2026?

The company has received all required permits, including the Environmental Clearance Certificate and an amendment to the horizontal drilling permit, and has begun sidetrack drilling at KW1X. Drilling should take about one month, followed by up to a month of flow testing.

What is the horizontal well designed to do?

It targets a horizontal section of up to 1,000 meters in the upper Huttenberg formation to intersect natural fractures across the Kavango structure. The well will be completed with an open hole, without casing or cement, to maximize flow from the fracture system.

What did earlier testing at KW1X show?

Zone testing, which began in June 2026, flowed natural gas and potential liquids to surface from two separate zones. The company described the results as preliminary.

Who are ReconAfrica's partners on the project?

ReconAfrica operates PEL 73 with a 70% working interest. BW Energy holds 20%, and NAMCOR holds a 10% carried working interest.

What is the current analyst view on RECO?

Research Capital analyst Bill Newman reiterated a Speculative Buy rating and CA$3.80 target price on October 19, saying a sustained commercial flow rate with meaningful liquids would materially de-risk the discovery.

When are flow test results expected?

The company expects to disclose results before year-end.