Reconnaissance Energy Africa Ltd. Share Price Drops 25% Despite 324% Return Over 3 Years
April 12, 2023
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Reconnaissance Energy Africa ($TSXV:RECO) Ltd. is an independent energy exploration and production company traded on the Toronto Stock Exchange (TSX) with a focus on the development of oil and natural gas assets in Africa. The company has recently seen its share price drop by 25% in the last month, despite the fact that it has delivered a 324% return over the past 3 years. Despite this decline, the company’s shareholders have still benefited from a large return over the three-year period. Since its inception, RECONNAISSANCE ENERGY AFRICA has aggressively pursued opportunities in the African energy sector, particularly in East and West Africa. The company has experienced success in onshore and offshore exploration and production, building a portfolio of oil and natural gas assets across several countries.
RECONNAISSANCE ENERGY AFRICA currently holds exploration acreage in Ghana, Uganda, and Angola, with additional acreage in Cameroon and Kenya. This has raised concerns about the future of the company’s operations, as well as its ability to successfully develop its African oil and gas assets. It remains to be seen if RECONNAISSANCE ENERGY AFRICA can continue to deliver returns to its shareholders in the coming months and years.
Market Price
(RECA) as the stock opened at CA$1.4 before closing at the same price, a 5.8% rise from its prior closing price of CA$1.4. Despite these gains, investors were still shaken due to RECA’s 25% drop in share price over the past week, as well as its 324% return over the past three years.
However, the recent drop in share price has investors concerned about the company’s future outlook. While the company has seen its share price rebound slightly, it remains to be seen whether it can rebuild investor confidence and maintain its strong performance over the long term. In the meantime, RECA continues to pursue its aggressive growth strategy, with plans to expand its oil and gas operations in Namibia and other parts of Africa. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for RECO. More…
| Total Revenues | Net Income | Net Margin |
| 28.79 | -49.89 | -191.9% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for RECO. More…
| Operations | Investing | Financing |
| -3.96 | -36.96 | 48.02 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for RECO. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 190.35 | 83.39 | 0.53 |
Key Ratios Snapshot
Some of the financial key ratios for RECO are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 0.0% | – | -127.9% |
| FCF Margin | ROE | ROA |
| -142.4% | -20.5% | -12.1% |
Analysis
GoodWhale has conducted an in-depth analysis of RECONNAISSANCE ENERGY AFRICA’s financials. The results of our review have revealed that this is a high risk investment in terms of both financial and business aspects. By becoming a registered user, you will gain access to detailed insights into the 3 risk warnings we have detected in the income sheet, balance sheet, and non-financial areas. We strongly advise that investors take the time to read through this information carefully before making a decision on whether or not to invest in RECONNAISSANCE ENERGY AFRICA. More…
Peers
The competition between Reconnaissance Energy Africa Ltd and its competitors, Lion Energy Ltd, Brookside Energy Ltd, and Vintage Energy Ltd, is fierce. With their respective capabilities and resources, these companies are vying for a share of the African energy market. As each company strives to stay ahead of the competition, the race for dominance in the African energy market is on.
– Lion Energy Ltd ($ASX:LIO)
Lion Energy Ltd is a publicly listed oil and gas exploration and production company headquartered in Australia. The company focuses on the development of exploration and production assets in the Asia Pacific region. Its market cap of 14.06M as of 2022 reflects the value of the company’s outstanding shares on the stock market. The company’s return on equity of -6.17% is an indication of how efficiently it is utilizing its shareholders’ equity, with a negative value suggesting that it is not generating enough return on its investments.
– Brookside Energy Ltd ($ASX:BRK)
Brookside Energy Ltd is an energy exploration and production company that operates in the oil and gas industry. It has a market capitalization of 55.14 million as of 2022, which is a measure of the company’s size and reflects the value of its outstanding shares. It also has a Return on Equity (ROE) of 6.74%, which is an indicator of its profitability. This means that for every dollar of investors’ equity, the company is able to generate 6.74 cents of income. Brookside Energy Ltd is focused on providing reliable and sustainable energy for domestic and international markets.
Summary
Investing in Reconnaissance Energy Africa (REA) over the last three years has yielded positive returns for shareholders. Over this period, the company has seen a significant return of 324%, though the stock price has recently dropped by 25% in the past month. Despite this, there are indicators that the stock could move up again soon, as on the same day as the stock price drop, the company experienced a positive movement. As such, investors in REA should consider short-term trading trends and take into account the longer-term gains available from investing in the company.
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