ReconAfrica defends itself after short seller says Canadian oil company is ‘drilling blind’ in Namibia – by Geoffrey York and Niall McGee (Globe and Mail – June 25, 2021)

Prominent U.S.-registered short seller Viceroy Research has taken a short position in Canadian oil company Reconnaissance Energy Africa Ltd. (ReconAfrica), alleging the company is “drilling blind” and has a “near-zero chance” of finding any deposits of value in its Namibia exploration project.

In a report released Thursday, Viceroy said it has shared its detailed findings with Canadian regulators and expects them to take action.

ReconAfrica’s stock price on the TSX Venture Exchange has soared from about 50 cents to more than $13 over the past 18 months, despite warnings from environmentalists that its drilling could threaten the fragile ecosystem of the wildlife-rich Okavango Delta.

Viceroy is headed by high-profile British short seller Fraser Perring, whose research has played a role in triggering stock collapses by German payments company Wirecard and South African retail holding company Steinhoff International in recent years.

Viceroy has come under sharp criticism in several countries, and South African central bank governor Lesetja Kganyago has called it a “hit squad.”

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