Reconnaissance Energy Africa (RECO) AI Stock Analysis

• Market Cap: C$264.11M
• 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: 334,311,400
• 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: 50 Neutral
• Price Target: C$0.78 ▼(-9.88% Downside)

The score is primarily held back by weak financial performance—minimal/zero revenue, persistent losses, and negative cash flow—despite the benefit of a debt-free balance sheet. Technicals are supportive due to strong upward trend and positive MACD, but overbought signals raise near-term risk. Valuation is constrained by negative earnings and no stated dividend yield.

Positive Factors

Debt-free balance sheet

A zero-debt position with a sizable equity base and assets provides structural financial flexibility for an exploration company. This reduces insolvency risk, permits continued funding of seismic and drilling programs, and improves bargaining power in farm-outs or partner negotiations over the next several quarters.

Concentrated Kavango Basin position

Owning a focused exploration footprint in the Kavango Basin concentrates upside if reservoirs are proven commercial. A clear geographic focus allows targeted data acquisition, consistent subsurface modelling, and makes the acreage attractive to majors seeking basin entry, supporting durable value creation via farm-outs or JV formation.

Multiple monetization pathways

Having distinct routes to monetize exploration value—farm-outs, asset sales, or eventual production—reduces single-point dependency. Farm-outs enable carried drilling and partner capital, preserving upside while lowering company funding needs, a structurally relevant benefit for sustaining programs through volatile commodity cycles.

Negative Factors

Persistent negative cash flow

Ongoing and material cash burn means the business cannot self-fund exploration and appraisal, forcing reliance on capital markets, dilutive equity issuances, or partner funding. This constraint limits runway, increases financing risk, and can delay or scale back programs if markets tighten over the next several quarters.

No meaningful revenue and sustained losses

An exploration-stage profile with persistent net losses and negligible revenue means returns are fully contingent on future discoveries and monetization. This absence of operating income constrains reinvestment capacity and makes shareholder returns dependent on successful high-cost drilling outcomes rather than stable cash generation.

High dependency on external factors and partners

Corporate prospects hinge on securing permits, favourable commodity pricing, and farm-out or JV partners. These external, often uncontrollable factors can materially delay or prevent value realization, increasing project execution and regulatory risk for months to years and constraining predictable progress toward commerciality.

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

Financials reflect an exploration-stage company with no meaningful revenue, persistent net losses, and ongoing cash burn (negative operating and free cash flow). The key positive is a currently debt-free balance sheet supported by a sizable equity base, which provides flexibility but does not offset weak profitability and cash generation.

Income Statement

TTM (Trailing-Twelve-Months) results show no revenue and a large net loss (about $20.4M), consistent with an exploration-stage profile where costs run ahead of commercialization. Profitability is weak across the history provided: 2024 annual net loss was about $26.0M, and losses have been persistent (notably very large in 2021). A positive outlier appears in 2024-03-31 (small net profit on modest revenue), but it does not represent a sustained earnings trend, and the overall trajectory remains loss-making with limited revenue visibility.

Balance Sheet

The balance sheet currently looks comparatively conservative: TTM (Trailing-Twelve-Months) and 2024 annual show zero reported debt, with a sizable equity base (~$212.3M TTM; ~$191.0M in 2024) supporting total assets (~$218.2M TTM). This is a meaningful strength versus the highly leveraged 2023 position (debt-to-equity above 1.0). The key weakness is returns: equity is not generating profits (TTM return on equity around -10%), and the business remains dependent on funding and project progress rather than self-sustaining profitability.

Cash Flow

Cash generation remains a major pressure point. TTM (Trailing-Twelve-Months) operating cash flow is negative (~-$13.5M) and free cash flow is also negative (~-$32.4M), indicating ongoing cash burn. The 2024 annual period was even more cash consumptive (free cash flow about -$61.2M), and free cash flow growth is volatile and negative in the latest periods, reflecting uneven spending and timing typical of exploration programs. While the company appears to have reduced cash burn versus 2024, cash flows are still not self-funding.

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

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:RECO, the sentiment is Neutral. The current price of 0.86 is below the 20-day moving average (MA) of 0.90, above the 50-day MA of 0.85, and above the 200-day MA of 0.60, indicating a neutral trend. The MACD of -0.04 indicates Positive momentum. The RSI at 39.73 is Neutral, neither overbought nor oversold. The STOCH value of 24.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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%
PRQ	63 Neutral	C$249.54M	505.41	0.20%	6.19%	-8.58%	-98.92%
TAL	63 Neutral	C$378.88M	3.68	14.69%	21.85%	-2.90%	-31.97%
IPO	51 Neutral	C$436.52M	-45.14	-2.61%	12.70%	53.79%	-126.63%
RECO	50 Neutral	C$264.11M	-10.03	-10.23%	―	―	―
PNE	49 Neutral	C$272.68M	-12.19	-43.41%	3.16%	-6.56%	-42.28%
CVVY	48 Neutral	C$261.55M	-9.64	-15.54%	―	-15.50%	-58.23%

Reconnaissance Energy Africa Corporate Events

ReconAfrica Raises C$36.8 Million to Accelerate Kavango and Gabon Appraisal Programmes

Reconnaissance Energy Africa has closed a C$36.8 million underwritten unit offering, issuing 38.7 million units at C$0.95 each, to fund an accelerated 2026 capital program built around its Kavango West 1X discovery in Namibia and the Ngulu Block offshore Gabon. The proceeds will be directed to multi-zone production testing and completion of the Kavango West 1X well, spudding a follow-on appraisal well on the Kavango discovery, reprocessing seismic data and advancing the Loba discovery and wider exploration inventory on the Ngulu Block toward resource reporting and drill-ready status, as well as for general corporate purposes; BW Energy modestly increased its stake through the financing, signaling continued strategic investor support while ReconAfrica positions itself to de-risk and potentially commercialize its African oil and gas portfolio.

The most recent analyst rating on (TSE:RECO) stock is a Hold with a C$0.88 price target. To see the full list of analyst forecasts on Reconnaissance Energy Africa stock, see the TSE:RECO Stock Forecast page.

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.