Reconnaissance Energy Africa (RECO) AI Stock Analysis

• Market Cap: C$124.85M
• Dividend Yield: N/A
• Average Volume (3M): 268.27K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.78
• Revenue Growth: -100.00%
• EPS Growth: 61.24%
• Country: CA
• Employees: 27
• Sector: Energy
• Sector Strength: 54
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): N/A
• Shares Outstanding: 265,642,180
• 10 Day Avg. Volume: 588,897
• 30 Day Avg. Volume: 268,270
• PEG Ratio: 0.07
• Price to Book (P/B): 3.88
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -4.09
• 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

• Rating: 49 Neutral
• Price Target: ―

Reconnaissance Energy Africa's stock score reflects significant financial instability, with declining revenues and negative cash flows being key concerns. The company's strong balance sheet and recent positive corporate developments provide some optimism for future growth, but the current financial challenges and unfavorable valuation metrics weigh heavily on its overall attractiveness.

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	Mar 2024	Mar 2023	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
0.00	305.14K	0.00	10.41M	0.00	0.00
	Gross Profit
-48.25K	-67.39K	4.96M	1.49M	0.00	0.00
	EBIT
-99.87M	-21.21M	-37.02M	-32.47M	-7.27M	-2.73M
	EBITDA
-19.86M	-21.02M	-37.02M	-259.53M	-7.46M	-3.10M
	Net Income Common Stockholders
-24.91M	41.11K	-58.36M	-263.41M	-7.50M	-3.15M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
30.81M	2.08M	55.96M	61.15M	6.79M	2.55M
	Total Assets
192.11M	142.30M	190.34M	133.93M	30.52M	8.35M
	Total Debt
0.00	0.00	94.95M	41.01M	0.00	287.35K
	Net Debt
-30.81M	-2.08M	38.99M	-20.14M	-6.79M	-2.26M
	Total Liabilities
6.21M	5.45M	107.02M	48.70M	1.93M	521.67K
	Stockholders Equity
185.90M	136.85M	83.33M	85.22M	28.59M	7.83M
Cash Flow		Free Cash Flow
-36.32M	-31.65M	-79.17M	-47.35M	-22.25M	-2.18M
	Operating Cash Flow
-14.84M	-14.54M	-27.86M	-11.71M	-5.41M	-2.11M
	Investing Cash Flow
-26.88M	-17.38M	-92.78M	-21.32M	-16.84M	-39.55K
	Financing Cash Flow
55.78M	8.57M	47.25M	87.40M	26.51M	4.70M

Reconnaissance Energy Africa Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.47
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:RECO, the sentiment is Negative. The current price of 0.47 is below the 20-day moving average (MA) of 0.57, below the 50-day MA of 0.56, and below the 200-day MA of 0.81, indicating a bearish trend. The MACD of -0.03 indicates Positive momentum. The RSI at 35.83 is Neutral, neither overbought nor oversold. The STOCH value of 18.79 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:RECO.

Reconnaissance Energy Africa Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HME	82 Outperform	C$177.89M	5.10	48.97%	6.52%	22.64%	44.49%
RBY	72 Outperform	C$176.80M	2.53	21.76%	―	83.19%	-43.74%
PRQ	64 Neutral	C$174.36M	161.90	0.33%	8.82%	-21.04%	-96.30%
Sector *	58 Neutral	$7.43B	3.43	-4.49%	10.08%	0.81%	-49.42%
TPL	56 Neutral	$120.60M	―	-34.33%	―	-57.65%	-232.60%
ORC.B	52 Neutral	$160.97M	11.45	-30.30%	6.64%	12.88%	-772.07%
RECO	49 Neutral	C$124.85M	―	-14.82%	―	-100.00%	61.24%

Reconnaissance Energy Africa Corporate Events

Reconnaissance Energy Africa Announces Annual Filings and Strategic Progress

Reconnaissance Energy Africa Ltd. has announced its annual filings for the nine-month period ending December 31, 2024, highlighting significant progress in its strategic goals. The company completed a farm down transaction with BW Energy Ltd. and released its first sustainability report. Operationally, it drilled the Naingopo exploration well, confirming a working petroleum system in the Damara Fold Belt. The company is preparing to drill Prospect I, targeting substantial crude oil resources, and has updated its resource estimates, indicating significant potential in the Kavango Basin. The corporate update includes a strategic farm down agreement with BW Energy, changes in board governance, and the publication of a sustainability report.

Spark’s Take on TSE:RECO Stock

According to Spark, TipRanks’ AI Analyst, TSE:RECO is a Neutral.

Reconnaissance Energy Africa’s stock is significantly hampered by severe financial instability, with ongoing losses and negative cash flows. While technical analysis and valuation metrics suggest caution, recent positive corporate events provide some potential for future improvement. However, the current financial challenges remain a critical concern, overshadowing the optimistic outlook from corporate developments.

To see Spark’s full report on TSE:RECO stock, click here.

ReconAfrica Expands Exploration in Angola with New Joint Venture

Reconnaissance Energy Africa Ltd. has announced a joint exploration project in Angola with the National Oil, Gas and Biofuels Agency, adding 5.2 million acres to its portfolio. This strategic move complements its existing operations in Namibia, highlighting the potential of the Damara Fold Belt and Rift Basin plays. The agreement provides ReconAfrica with an 80% working interest in the MOU area and involves geological studies and a 2D seismic program over 24 months. This initiative underscores the company’s focus on early entry into prospective hydrocarbon basins, aiming to create significant value for shareholders and employment opportunities in the Okavango region.

Spark’s Take on TSE:RECO Stock

According to Spark, TipRanks’ AI Analyst, TSE:RECO is a Neutral.

Reconnaissance Energy Africa’s stock score is primarily hampered by severe financial instability and unfavorable valuation, despite positive corporate events providing potential future upside.

To see Spark’s full report on TSE:RECO stock, click here.

ReconAfrica Announces Drilling Update for Largest Prospect in Namibia

Reconnaissance Energy Africa Ltd. has announced a drilling update for Prospect I, located onshore Namibia within Petroleum Exploration Licence 073. Prospect I is the company’s largest prospect to date, targeting significant quantities of both oil and natural gas resources. The pre-construction activities are on schedule, and the company plans to begin drilling this quarter, aiming for a depth of 3,800 meters with potential for deeper exploration. The recent success of the Naingopo exploration well has bolstered confidence in Prospect I’s potential, and the company is optimistic about unlocking the resources within the Damara Fold Belt.

Spark’s Take on TSE:RECO Stock

According to Spark, TipRanks’ AI Analyst, TSE:RECO is a Neutral.

Reconnaissance Energy Africa’s stock score is significantly hampered by severe financial challenges, including negative margins and cash flows, which weigh heavily against the company despite a strong balance sheet. The technical analysis provides mixed signals with a potential bearish trend, and unfavorable valuation metrics further impact its attractiveness. Recent positive corporate events offer some hope for future improvement, but the current financial instability remains a critical concern.

To see Spark’s full report on TSE:RECO stock, click here.

ReconAfrica Accelerates Drilling Plans and Resolves Legal Actions

Reconnaissance Energy Africa Ltd. has announced the acceleration of drilling activities at Prospect I in the Damara Fold Belt, moving the spud date to Q2 2025. This decision follows significant progress in preparatory activities and is supported by promising results from previous drilling. Prospect I targets substantial oil and gas resources, with the potential to significantly impact the company’s exploration success. Additionally, ReconAfrica has resolved legal actions in both the U.S. and Canada, with settlements approved within insured coverage limits, allowing the company to focus on its exploration endeavors.

ReconAfrica Schedules Investor Webinar and Conference Call

Reconnaissance Energy Africa has announced a webinar and conference call for investors and analysts, scheduled for February 13, 2025. The session will feature key executives, including President and CEO Brian Reinsborough, and will allow participants to engage in discussions about the company’s operations and future prospects. This initiative reflects the company’s proactive engagement with stakeholders and emphasizes its commitment to transparency and open communication.