RECAF: Fundamental Analysis.
Reconnaissance Energy Africa is a difficult company to produce a tech analysis for as it has a series of atypical events and timelines. This company is an explorer and has historically moved based upon fundamental catalysts. Historically these have included the refurbishment of the drill rig (and delays), the last private financing, shipping of the drill rig (and delays), and now the spudding of the first well. Marketing and news has provided increased visibility and brought new shareholders to the table at every event. We are currently awaiting a series of events should provide clear catalysts for investment. These events include:
1. Drilling should begin this week. This is the first of three wells to be produced. Initiation of drilling is a huge catalyst for investment as it removes all the risk of halted exploration due to a myriad of potential problems. The announcement of "Spudding the Well" typically coincides with a marketing campaign that will bring new interest and buyers to the table.
2. It takes 30-35 Days to drill a well. It is within this period that I expect to see consolidation above an all time high. Most investors will be awaiting drill results and holding onto shares. (The big money to be made is determined by successful discovery of a reliable hydrocarbon source.) With Haywood's Report issuing a share price target at 4.00CAD and a buy recommendation before drilling and evaluative news flows, it is easy to imagine that feeling of missing out could and should drive momentum throughout the duration of the first well.
3. If the share price exceeds $3.00 CAD for over 20 days, the warrant's will force exercise. This will dilute the shares, however it will raise 35 million dollars in cash for the treasury, guaranteeing a well program far beyond 3 wells. (Huge catalyst to invest long and creates even more potential value with less risk.)
4. The entire drill program ends in April. If they find NOTHING in the ground, you could bet the stock would be worth nothing as well. If they find an economic resource the company the share price should go parabolic.
With all these fundamentals in place I find it difficult to produce a tech analysis beyond a 4 month window, as the result of the ongoing drill program makes or breaks the company.
Last buy opportunity is opporaching before drilling begins at the current pull back to support between $1.55 - $1.65 window. The desire for support remains, but if delays occur, or no news cycle ensues, expect a significant retracement.
1. Drilling should begin this week. This is the first of three wells to be produced. Initiation of drilling is a huge catalyst for investment as it removes all the risk of halted exploration due to a myriad of potential problems. The announcement of "Spudding the Well" typically coincides with a marketing campaign that will bring new interest and buyers to the table.
2. It takes 30-35 Days to drill a well. It is within this period that I expect to see consolidation above an all time high. Most investors will be awaiting drill results and holding onto shares. (The big money to be made is determined by successful discovery of a reliable hydrocarbon source.) With Haywood's Report issuing a share price target at 4.00CAD and a buy recommendation before drilling and evaluative news flows, it is easy to imagine that feeling of missing out could and should drive momentum throughout the duration of the first well.
3. If the share price exceeds $3.00 CAD for over 20 days, the warrant's will force exercise. This will dilute the shares, however it will raise 35 million dollars in cash for the treasury, guaranteeing a well program far beyond 3 wells. (Huge catalyst to invest long and creates even more potential value with less risk.)
4. The entire drill program ends in April. If they find NOTHING in the ground, you could bet the stock would be worth nothing as well. If they find an economic resource the company the share price should go parabolic.
With all these fundamentals in place I find it difficult to produce a tech analysis beyond a 4 month window, as the result of the ongoing drill program makes or breaks the company.
Last buy opportunity is opporaching before drilling begins at the current pull back to support between $1.55 - $1.65 window. The desire for support remains, but if delays occur, or no news cycle ensues, expect a significant retracement.
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