The Data Room

Part one. 

Slick Promotion Pumps ReconAfrica Stock 

Rob Parker, February 27, 2025

A sudden rise in ReconAfrica’s stock price at the end of January 2025, followed by a similarly steep and rapid decline, concerned a group of ReconAfrica investors. In stock discussion forums and private conversations, these investors claim the sudden stock price surge was possibly linked to the mysterious appearance of a high-resolution image. The image seemed to show the beleaguered Canadian oil and gas driller had finally, after five long years of disappointing results, discovered oil. But no such discovery ever materialized. 

The image above first appeared on Discord, a platform designed for social interaction, allowing users to create and participate in communities, known as “servers.”  Users create channels based on their specific interests, such as discussing their investment in companies like ReconAfrica. These servers can be run by independent investors or others who are not directly involved in the company, or by the company and its backers.

The primary Discord channel for discussing the ReconAfrica stock is called Encore ReconAfrica. Encore ReconAfrica moderators have been accused of being influenced by the company. These Encore Discord moderators or ‘’mods’’ closely regulate all discussions to do with the company. One critical word against the company in Encore and users can be placed in a 24 hour time-out and have their posts deleted, or even be kicked out of the channel. 

Investors on multiple stock discussion platforms have stated that they were discouraged in this way from expressing legitimate concerns within the Encore ReconAfrica Discord channel.

Many stockholders claim that ReconAfrica’s own staff directly influenced the Encore ReconAfrica discussions. These concerned investors say that this Discord channel operates essentially as an echo chamber for the company, preventing regular, retail investors from learning the whole truth about ReconAfrica’s highly controversial operations.  

Some of these concerned investors created their own Discord channel outside of the company’s purview to speak freely about the stock and the company’s behaviour. That new channel is known as ReconAfrica Investors.

In late January 2025, ReconAfrica stockholders were on tenterhooks waiting for the results of ReconAfrica’s fifth oil exploration well, called the Naingopo well.  It was in this ReconAfrica Investors channel, where the new photo was posted, which appeared to show that the company had finally, after nearly five years of drilling, discovered oil. The channel erupted in jubilation. 

The Photo Context

On July 30, 2024 ReconAfrica announced it had entered a definitive farm down agreement with Norwegian company BW Energy that gave the Scandinavian company a 20 percent working interest in ReconAfrica’s Namibian prospecting license. BW surprised many observers by partnering with ReconAfrica whose operations have been marred by controversy, and which is under investigation for corruption and bribery by the Canadian RCMP.  

On the 28th of January 2025 the photo of the drilling pit was shared to the ReconAfrica Investors channel, and approximately an hour later  to the Encore ReconAfrica Discord group, where moderators and purported industry experts began to suggest that the company had discovered oil, based solely on this unattributed photo. 

There was little discussion of the mysterious provenance of the photo or the anonymous poster, named Samson Sim, who took no questions. Nor was there much speculation as to what the poster’s motives could be or who they were. 

Moderators for the Encore ReconAfrica channel offered no reminders about previous alleged manipulation attempts such as the flaring reports  circulating in the Encore ReconAfrica channel in 2022, which apparently led some investors to believe that the company had discovered oil or gas at that time as well.

The photo was shared on other social media platforms like Reddit within hours. Because the company had not released the results of their latest well when they said they would in 2024, the investors, who at this point were starved for information, apparently took the image to be new evidence of an as yet unannounced oil discovery. 

In fact many stated that they had made stock trading decisions based upon the image. For example, a poster named Lefty, said on the 29th of January that he “bought 10k more this morning after new hi-res images” came out. He was just one of many investors who advertised their purchase of ReconAfrica stock based on this image. On this day trading volume in ReconAfrica spiked to a 3 month high, according to the Toronto Stock Exchange.

Section 9 of the US Securities and Exchange Act of 1934 says that investors can sue a company “for trading activities and patterns of trading conduct that cause investors to think that a stock is doing better -or worse, than it actually is”. 

On January 28th, 2025, on the Discord Group Encore ReconAfrica, a user with the handle Powder River, who was viewed as an authority  with expertise in oil and gas, insinuated that the photos were proof of ‘’oil that flows”. Powder explained to the stockholders in the group that the photo showed that Recon was ‘’fishing oil off pit’’, thereby further suggesting that the company had indeed struck oil. 

On the 28th of January 2025, the stock subsequently surged in price nearly thirty percent.  On the same day, a self-proclaimed moderator in the Discord group Encore ReconAfrica named DavidJ, added his own positive interpretation of the image, which he apparently edited the next day to add a disclaimer to his post.

The sudden jump in the share price, unsupported by any material disclosures by the company appears to have put ReconAfrica in a difficult, but not unfamiliar, position.   

Previous trading halt

ReconAfrica’s marketing has always seemed to be aimed at what are called “punters”.  Investopedia defines a punter as a stock “speculator who makes large bets on unlikely outcomes with the hopes of beating the odds for large payoffs. A punter will often place a trade on a whim or gut feeling, or with little to no research or due diligence.’’ ReconAfrica’s marketing was probably never for institutional investors or pension funds and nothing illustrates this better than ReconAfrica’s first halt in trading way back in 2020. 

Back in 2020 trading was halted after a report written by Gunter Goldhertz and an article by oilprice.com sparked a frenzy of stock purchases.  The Goldhertz report contained the following gibberish. “It’s all about dinosaurs. You read correctly, as is well known, petroleum comes from the remains of dinosaurs.” 

ReconAfrica issued a news release, on January 17, 2020 explaining the unusual trading activity. The press release only referenced the Goldhertz report. but curiously omitted to mention the back-to-back promotions in oilprice.com, which appeared as articles, on the 13th and 14th of January 2020 and plausibly also led to the halt in trading. Both articles suggested ReconAfrica may be sitting on a truly enormous oil discovery and stock trading took off.

Release ReconAfrica! 

On January 29th 2025, with the share price rising rapidly despite the lack of any public release of information, ReconAfrica put out another brand new press release, and another within 48 hours of the appearance of the mystery oil photo. 

Source: a story by Henk Kombrink in Geoexpro on February 3, 2025 which we encourage you to read. 

The first release, which came out on January 29, 2025 the company stated that its share transaction with BW Energy, which allowed it to keep drilling after it acquired 20% of the ReconAfrica, was complete. The completion of this agreement meant that BW could now sell their shares. The news was otherwise unremarkable and contained no information to explain the high trading volume. 

It was on the next day, Thursday, January 30 that ReconAfrica finally released the long awaited, but ultimately disappointing, results from their fifth well. The news of another dry well must have come as a shock to those investors who rushed to buy more shares two days before, after what they obviously believed was visual confirmation of ‘’oil in the pit” when they saw the mystery photo. 

This new release triggered heavy selling that brought the stock down to levels not seen since before ReconAfrica’s 2021 marketing campaign, a more than 30% drop. Some investors stated in the dissident ReconAfrica Discord channel that they believed that this could be market manipulation by the company or its backers.

Interestingly, a careful review of monthly satellite imagery from the Naingopo drill site shows the mystery image was most likely taken at the beginning of the company’s drilling in September 2024, with the large black patch then diminishing over time. This suggests that the oily black slick in the waste pit was the company’s drilling fluid, not, as promoters suggested, evidence of oil coming out of the ground and pooling in the drill pit. 

A geologist whom we contacted about the mystery image stated “I am sure that they drilled this well using Invert or OBM (Oil Based Drilling Mud). I just look at the dirty looking equipment around the mud tanks and the pit and as I have been the wellsite geologist on innumerable Invert drilled wells (as well as underbalanced wells using native crude oils) I know only too well how impossible it is to keep all the equipment clean.”  

It should be noted that it would not be easy to fly a drone day after day over ReconAfrica’s working well locations without anyone from the company noticing. An investor with vast oilfield experience told this journalist that anyone making such a flight would be putting their drone, and possibly their own safety, at risk. When we asked Kavango community leaders about ReconAfrica staff flying drones, we were told “they do that most of the time”.

The question remains whether those who leaked the image knew it did not show an oil discovery but rather just the company’s oil-based drilling mud. 

Another Discord user, who prefers not to be named, outlined his opinion about the steps involved in the alleged photo-based scheme to boost the stock in a post to Discord within a few days. ‘’1-Encore members collectively arranged for ILLEGAL [sic] drone pics to be taken of the site, 2-the pics were released by a new poster, who vanished immediately from all social media/discord sites the same day. 3- certain members who are O&G individuals … claimed this was an indication of a discovery. 4- The Price surged over 20% in one day.”

The investors further alleged that Encore ReconAfrica Discord mods may have had prior knowledge of the alleged scheme as suggested by moderator DavidJ’s message on the 29th. The screenshot of DavidJ’s message has been posted and discussed extensively on the ReconAfrica Investors channel. In the conversation, DavidJ says that while he personally was not involved, he understands that ‘’a few folks got together’’ to fly a drone. 

US securities law addresses stock manipulation through various statutes and regulations designed to protect investors and ensure fair trading practices. According to the Securities Exchange Act of 1934, market manipulation is defined as “transactions which create an artificial price or maintain an artificial price for a tradable security.” This includes spreading false or misleading information. 

A press release issued by ReconAfrica on July 16, 2024 stated that: All Units purchased by BW Energy will be subject to a six-month lock-up agreement. ReconAfrica’s press release on the 30th of the same month said ”further to its announcement on July 16, 2024, it has entered into a definitive farm down agreement with BW Energy Limited (“BW Energy”) (OSE: BWE) dated July 30, 2024, for the sale of a 20% working interest in Petroleum Exploration Licence 73 (“PEL 73”), in northeast Namibia.” 

The press release issued announcing the farm down agreement came on the 29th of January, not quite six months later. One day later, on the 30th, ReconAfrica finally disclosed the results from their most recent dry well and the share price tanked. There was no real technical information involved in the press release and nothing prevented it from being released earlier. 

Investors in the discord channel ReconAfrica Investors, Reddit and other boards are now speculating that people close to the company could have gotten together to boost the share price for their own purposes, but the timing also raises questions about whether larger players may have benefitted from the scheme too. 

If company insiders leaked a months-old drone image to suggest the company had found oil just 2 days before the deal with BW Energy that allowed it to trade its shares on the 30% upswing, that would probably be classed as stock manipulation and hence a clear violation of US securities law. This adds to the growing pressure for the US, Norwegian and Canadian authorities to investigate.