Reconnaissance Energy Africa Ltd. (TSXV: RECO, OTCQX: RECAF) announced a significant expansion of its operations with the signing of a production sharing contract and a joint venture agreement for offshore Block C-7, now known as Ngulu, located in central Gabon. This marks the company’s strategic entry into an established oil-producing region in West Africa, expanding its footprint beyond its African onshore exploration activities in Namibia and Angola.
The joint venture includes ReconAfrica holding a 55% working interest and acting as the designated operator, accompanied by Canadian partner Record Resources Inc. with 20%, Gabon Oil Company (GOC) holding 15%, and the government of Gabon carrying 10%. The partnership grants ReconAfrica operational control over a 1,214 square kilometer shallow-water block, which is roughly the size of 54 blocks in the Gulf of Mexico, offering a range of exploration, appraisal, and development opportunities under a four-year initial contract term.
This new project brings the advantage of both a near-term production asset and a large exploration upside. The Loba oil field discovery within Ngulu, originally drilled in 1976, features significant pay zones with 140 meters of gross oil-bearing formation and has the potential to produce around 20,000 barrels per day. This target aligns with neighboring fields producing in the 25,000 to 42,000 barrels per day range, such as the Grondin and Baudroie fields. The Loba field’s close proximity, approximately 10 kilometers to existing production infrastructure operated by Perenco, presents a low-cost tie-back opportunity that could accelerate commercial development and generate cash flow to support further growth.
Beyond near-term production, the area includes an inventory of 28 mapped prospects that mirror play types found in the Gulf of Mexico. Top prospects such as Lepidote Deep and Palomite Deep are attractive due to their stacked reservoir potential and structural similarities to successful fields in one of the world’s most prolific offshore basins. ReconAfrica plans to employ advanced seismic reprocessing techniques, including modern Pre-Stack Depth Migration, to enhance seismic imaging and reduce exploration risk before drilling. This approach reflects the deep technical expertise of ReconAfrica’s management, much of which has been gained through experience in Gulf of Mexico exploration.
President and CEO Brian Reinsborough emphasized the importance of this move, noting that Gabon is sub-Saharan Africa’s fourth largest oil producer and offers substantial exploration potential. He highlighted the opportunity to leverage Gulf of Mexico-style exploration techniques in this underexplored basin. The deal also diversifies the company’s portfolio by adding a blend of appraisal, development, and exploration assets, complementing ReconAfrica’s existing programs.
At a macro level, Gabon’s oil sector remains a key pillar of the national economy. The country produces around 236,000 barrels per day as of early 2025, with proven reserves estimated at two billion barrels. Although production has declined over the past decades from highs around 365,000 barrels per day in the late 1990s, recent reforms and incentives under the 2019 Hydrocarbons Code aim to attract new investment and reverse the output slide. Gabon is increasingly focused on deepwater exploration while maintaining mature, onshore fields, making offshore blocks like Ngulu strategically attractive for companies such as ReconAfrica.
The government’s commitment to facilitate exploration through flexible terms and improved data access also supports the strategic partnership. Gabon Oil Company’s participation and the Republic of Gabon’s carried interest in the PSC underscore local stakeholder support. The initial four-year work program commits ReconAfrica to comprehensive technical studies, reprocessing of 3D seismic data, and drilling at least one well, which sets a clear timeline for advancing the project.
This transaction is a key step in ReconAfrica’s evolution toward being a full-cycle offshore exploration and production company in West Africa. The combination of an existing oil discovery with infrastructure access for low-cost production, paired with a large drilling inventory and geological upside, provides a foundation for sustainable growth and potential cash flow generation. Such attributes are critical as the company continues to explore its substantial license holdings inland Africa while now also developing offshore Gabon.
With fresh capital commitments and an experienced management team, ReconAfrica is positioning itself for growth in one of the continent’s more promising oil provinces. The Gabon entry makes it clear that the company intends to operate beyond frontier exploration and develop a balanced portfolio that includes near-term production alongside longer-term exploration. This gives shareholders a pathway to value creation not only from finding oil but also from advancing production assets in proven basins.
