The
Eastern Extension of the
As a result of acquiring and interpreting additional tight grid regional aeromagnetic data, ReconAfrica feels it has definitively established the eastern boundary of the Kavango basin, where a deep and high potential section of the basin extends from northeast
Terms of the Licence are as follows
100% working interest in all petroleum rights from surface to basement
An initial 4-year exploration period, with renewals up to an additional 10 years, in accordance with the Botswana Petroleum (Exploration and Production) Act
Upon declaration of commercial production, the operator holds the right to enter into a 25-year production licence with a 20-year renewal period, in accordance with the Botswana Petroleum (Exploration and Production) Act
Royalties associated with the production licence will be subject to negotiation, in accordance with the Botswana Petroleum (Exploration and Production) Act, and generally range from 3 to 10% of gross revenue from production
The Company has committed to a minimum work program of
The corporate tax rate in
A new and more regional isometric of the deep Kavango basin can be seen on the Company's website - Isometric
Farm-out Option Agreement
The acquisition and analysis process of the
While
Initial payment from the Farmee to ReconAfrica is
If the Option is exercised within 18 months of the date the Licence was awarded, the Farmee will pay ReconAfrica
If the Option is exercised between 18 months and 36 months from the date the Licence was awarded to ReconAfrica, the Farmee will pay ReconAfrica
The Agreement is subject to certain conditions, including the approval of the
The Agreement may be terminated if the MMR does not provide its approval to the transfer within six months following exercise of the Option, the transfer is not completed within six months following the exercise of the Option, or by mutual agreement.
Drilling Update
Due to travel restrictions precipitated by the COVID-19 pandemic, the Company has deferred drilling operations which were originally scheduled to commence by
Regulatory
The Agreement is not an 'Arm's Length Transaction' as such term is defined by the
In respect of the requirements of MI 61-101 and TSXV Policy 5.9, the Company relied on the exemptions from the formal valuation and minority shareholder approval requirements under MI 61-101. The Company was exempt from the formal valuation requirements of MI 61-101 as no securities of the Company are listed on the specified markets outlined therein. Additionally, the Company was exempt from the minority shareholder approval requirements of MI 61-101 as the fair market value of the transaction is less than 25% of the Company's market capitalization.
In addition, the Agreement constitutes a 'Reviewable Transaction' in accordance with TSXV Policy 5.6 and is subject to acceptance of the TSXV.
A material change report respecting the Agreement will be filed less than 21 days before the anticipated closing date. This abbreviated period is reasonable and necessary in the circumstance as the Company wishes to complete the transaction in a timely manner. A copy of such material change report will be provided to any shareholder of the Company upon request, without charge.
ReconAfrica is a junior oil and gas company engaged in the opening of the newly discovered deep
Cautionary Note Regarding Forward-Looking Information
Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or future performance. Such statements include, without limitation: the receipt of the MMR approval to the transfer upon exercise of the Option, the entry of the Company and the Farmee into a joint operating agreement, the receipt of the TSXV's acceptance of the Agreement and the anticipated recommencement of drilling. The use of any of the words 'could', 'intend', 'expect', 'believe', 'will', 'projected', 'estimated', 'suggests' and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on ReconAfrica's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to ReconAfrica. The forward-looking information contained in this release is made as of the date hereof and ReconAfrica undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein.
Contact:
Tel: +1 (604) 423-5384
Email: admin@reconafrica.com
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