Reconnaissance Energy Africa (RECO) AI Stock Analysis

• Market Cap: C$336.49M
• Dividend Yield: N/A
• Average Volume (3M): 794.88K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.67
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: CA
• Employees: 27
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): -0.01
• Shares Outstanding: 333,159,900
• 10 Day Avg. Volume: 597,998
• 30 Day Avg. Volume: 794,885
• PEG Ratio: 0.19
• Price to Book (P/B): 1.35
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -4.21
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 57 Neutral
• Price Target: C$0.93 ▲(7.67% Upside)

The score is held back primarily by weak financial performance (ongoing losses and cash burn despite a stronger, debt-free balance sheet). This is partially offset by improving technical momentum and positive corporate developments around exploration results and planned testing milestones, while valuation remains difficult to support due to negative earnings and no dividend data.

Positive Factors

Strategic Expansion

The joint venture in Angola adds 5.2 million acres to ReconAfrica's portfolio, enhancing its exploration potential and market position in Africa.

Debt-Free Balance Sheet

A debt-free balance sheet provides financial stability and flexibility, allowing the company to invest in growth opportunities without the burden of interest payments.

Operational Progress

Progress in drilling activities at Prospect I indicates potential for significant resource discovery, which could enhance long-term revenue and market position.

Negative Factors

Negative Cash Flow

Negative cash flow from operations suggests the company struggles to self-fund its activities, potentially limiting its ability to sustain operations without additional financing.

Declining Revenues

Declining revenues and negative margins indicate challenges in generating sales, which can erode shareholder value and hinder long-term growth.

Eroding Shareholder Value

Consistent net losses reduce shareholder equity, impacting investor confidence and the company's ability to raise capital for future projects.

Reconnaissance Energy Africa Business Overview & Revenue Model

Company Description

Reconnaissance Energy Africa Ltd., a junior oil and gas company, engages in exploration and development of oil and gas potential in Namibia and Botswana. It holds a 90% interest in a petroleum exploration license that covers an area of approximately 25,341.33 km2 located in Namibia; and 100% working interest in a petroleum license, which covers an area of 8,990 square km2 located in northwestern Botswana. The company is headquartered in Vancouver, Canada.

How the Company Makes Money

Reconnaissance Energy Africa (RECO) generates revenue through the exploration and development of oil and gas resources. The company's primary revenue stream comes from the discovery and commercialization of hydrocarbon reserves in its licensed areas. This involves conducting seismic surveys, drilling exploratory and appraisal wells, and ultimately producing oil and gas for sale to global markets. Revenue is earned from the sale of these hydrocarbons to refineries, traders, and other buyers in the energy sector. Additionally, RECO may form strategic partnerships and joint ventures with other energy companies to share exploration risks and costs, which can also contribute to its earnings.

Reconnaissance Energy Africa Financial Statement Overview

Summary

Reconnaissance Energy Africa faces significant financial challenges. The income statement reflects declining revenues and negative profit margins. The balance sheet is strong with no debt, but ongoing losses are eroding shareholder value. Cash flow is negative, indicating the company is not generating cash from operations and relies on external financing.

Income Statement

Reconnaissance Energy Africa's income statement shows significant challenges. The company has experienced declining revenue, with the most recent TTM data indicating zero revenue. Net profit margins are negative, and EBIT and EBITDA margins are also deeply in the red, highlighting ongoing operational losses. The revenue growth rate is unfavorable, showing a sharp decline over the previous periods, which suggests the company is struggling to generate sales.

Balance Sheet

The balance sheet presents a mixed picture. On the positive side, the company is debt-free, which reduces financial risk. The equity ratio is strong, indicating a solid capital structure. However, the return on equity (ROE) is negative due to consistent net losses, which is a concern for profitability. The company's assets have grown, but shareholder value is being eroded by ongoing losses.

Cash Flow

Cash flow analysis indicates significant challenges. Operating cash flow is negative, which means the company is not generating cash from its operations. Free cash flow is also negative, indicating that the company is not able to cover capital expenditures from operating cash flow. Although there was a significant influx of financing cash flow, it primarily covers operating and investing deficits rather than supporting growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	0.00	0.00	305.14K	4.97M	2.19M	0.00
Gross Profit	-92.87K	-57.93K	-67.39K	-2.09M	1.49M	0.00
EBITDA	-19.06M	-24.46M	-21.02M	-37.02M	-259.53M	-7.46M
Net Income	-20.36M	-26.05M	41.11K	-58.36M	-263.41M	-7.50M
Balance Sheet
Total Assets	218.23M	195.87M	142.30M	190.34M	133.93M	30.52M
Cash, Cash Equivalents and Short-Term Investments	20.65M	11.41M	2.08M	55.96M	61.15M	6.79M
Total Debt	0.00	0.00	0.00	94.95M	41.01M	0.00
Total Liabilities	5.90M	4.84M	5.45M	107.02M	48.70M	1.93M
Stockholders Equity	212.34M	191.03M	136.85M	83.33M	85.22M	28.59M
Cash Flow
Free Cash Flow	-32.40M	-61.19M	-31.65M	-79.17M	-47.35M	-22.25M
Operating Cash Flow	-13.48M	-19.83M	-14.54M	-27.86M	-11.71M	-5.41M
Investing Cash Flow	-33.23M	-31.41M	-17.38M	-51.30M	-21.32M	-16.84M
Financing Cash Flow	53.01M	55.58M	8.57M	47.25M	87.40M	26.51M

Reconnaissance Energy Africa Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.86
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:RECO, the sentiment is Positive. The current price of 0.86 is below the 20-day moving average (MA) of 0.96, above the 50-day MA of 0.71, and above the 200-day MA of 0.57, indicating a bullish trend. The MACD of 0.10 indicates Negative momentum. The RSI at 72.58 is Negative, neither overbought nor oversold. The STOCH value of 64.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:RECO.

Reconnaissance Energy Africa Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
TAL	64 Neutral	C$351.50M	3.41	14.69%	21.85%	-2.90%	-31.97%
PRQ	63 Neutral	C$239.25M	489.19	0.20%	6.19%	-8.58%	-98.92%
RECO	57 Neutral	C$336.49M	-15.72	-10.23%	―	―	―
CVVY	56 Neutral	C$261.55M	-9.69	-15.54%	―	-15.50%	-58.23%
IPO	51 Neutral	C$351.88M	-38.30	-2.61%	12.70%	53.79%	-126.63%
PNE	49 Neutral	C$272.68M	-12.69	-43.41%	3.16%	-6.56%	-42.28%

Reconnaissance Energy Africa Corporate Events

ReconAfrica Adopts Shareholder Rights Plan to Guard Against Hostile Bids

Reconnaissance Energy Africa has adopted a shareholder rights plan, appointing Odyssey Trust Company as rights agent, in a move aligned with contemporary Canadian corporate governance practices and not prompted by any specific takeover attempt. The plan, conditionally accepted by the TSX Venture Exchange and subject to shareholder ratification at the company’s 2026 annual meeting, is designed to give the board and investors more time to evaluate any future unsolicited takeover bids, consider alternative value-creating options and promote fair treatment and full value realization for shareholders, and is expected to remain in effect for three years following ratification.

The most recent analyst rating on (TSE:RECO) stock is a Hold with a C$0.93 price target. To see the full list of analyst forecasts on Reconnaissance Energy Africa stock, see the TSE:RECO Stock Forecast page.

ReconAfrica Raises C$20 Million to Accelerate Kavango Commercialization and Gabon, Angola Work

ReconAfrica has launched a C$20 million overnight marketed private placement of units priced at C$0.95, each comprising one common share and a half-warrant, to fund an ambitious 2026 capital program spanning its Namibian, Angolan and Gabonese assets. The proceeds will support extensive multi-interval production testing and completion operations at the Kavango West 1X discovery well, pre-drill work to move a Kavango appraisal well to drill-ready status, seismic reprocessing and appraisal planning on the Loba discovery and wider Ngulu Block offshore Gabon, and accelerated geochemical work in its Angola MOU area, all aimed at progressing the Kavango discovery toward commercialization, potential reserve bookings and an eventual final investment decision while advancing its broader African exploration portfolio.

The most recent analyst rating on (TSE:RECO) stock is a Hold with a C$0.93 price target. To see the full list of analyst forecasts on Reconnaissance Energy Africa stock, see the TSE:RECO Stock Forecast page.

Reconnaissance Energy Africa Advances Key Projects in 2025

Reconnaissance Energy Africa Ltd. has made significant progress in its operations throughout 2025, including drilling a second well in the Damara Fold Belt, expanding into Angola, and advancing offshore projects in Gabon. The company is preparing for a production test at Kavango West 1X and is working with partners to support hydrocarbon development in Namibia. These strategic moves are expected to position the company for key milestones in 2026, potentially impacting its operational capabilities and stakeholder interests.

ReconAfrica Unveils Promising Results at Kavango West 1X Well in Namibia

Reconnaissance Energy Africa Ltd. announced the results of the Kavango West 1X well in Namibia, revealing significant hydrocarbon pay in the Otavi carbonate section. The company plans to conduct a production test in early 2026 to evaluate the well’s deliverability, which could impact its operations positively by confirming the potential of the Damara Fold Belt play. This development may enhance ReconAfrica’s industry positioning and stakeholder confidence, as the company holds a substantial lease position in the region.

ReconAfrica Extends Drilling at Kavango West 1X Well Amid Promising Hydrocarbon Indications

Reconnaissance Energy Africa Ltd. has extended the drilling depth of its Kavango West 1X exploration well beyond the initially planned total depth due to promising indications of hydrocarbons. The company plans extensive wireline logging to verify these findings and expects to release the results by year-end. The well, located in Namibia, has encountered multiple oil shows and consistent natural gas markers, prompting further exploration to assess the potential of the Otavi reservoir package. Despite a temporary delay due to equipment failure, the company remains optimistic about the prospect’s potential impact on its operations and industry positioning.