Invictus Energy Limited (ASX: IVZ) is an ASX listed energy company that has its primary oil and gas exploration resources in sub-Saharan Africa. IVZ’s asset includes of Cabora Bassa Basin, which is an extremely prospective portion situated in Zimbabwe region. Also, the company’s SG 4571 permit encompasses Mzarabani conventional gas-condensate prospect.
On 22nd May 2019, the company released a presentation at Africa E&P Summit in London regarding its business operations. In the presentation, the company mentioned that it has 80% ownership stake in SG 4571 licence in Cabora Bassa, covering the total area of 250,000 acres. The work program for 18 months has already been completed from the date of grant of SG 4571 in August 2017. The company also reprocessed the dataset and used an updated understanding of another successful rift basin plays to Cabora Bassa.
Focus on Zimbabwe
The company is focusing on Zimbabwe because the new government has extended its full support towards business, and it is also promoting foreign investments in the country with the implementation of various investor-friendly reforms. The company has special economic zones (SEZ) legislation enacted in Zimbabwe, leading to several economic benefits like zero CGT, 5-year tax holiday after which a nominal rate of 15% would be levied as corporate tax. The company also gets an exemption on customs duty on raw materials and capital equipment.
Seismic reprocessing results – Line 013
The company also displayed the Seismic reprocessing results in comparison to the original processing. The comparison stated apparent differences between the two as now the deeper structure was noticeably clear. The results also proved better continuity in reflectors with improved fault definition.
Independent prospect resource estimate for SG 4571 Mzarabani prospect is given below, which was independently verified by Netherland, Sewell, and Associates Inc. (NSAI).
Mzarabani Prospect is as old as early Triassic, having a depth to the crest of 2,200m and 1600m of vertical relief. With total area closure of 225km2, it is the largest undrilled, seismically defined structure in onshore Africa.
It is a vertically stacked prospect having a large 4-way dip closure and multiple horizons under closure. It contains multiple targets from a single well in a substantial stacked prospect with estimated well cost to be US$10 – 15 million.
Gas Market Overview
According to the company, Zimbabwe lies in a strategic location and serves as the pathway and import/export corridor for Malawi, DRC, Botswana and Zambia to the port of Beira in Mozambique.
Zimbabwe also provides beneficiation of products to the region, since it is heavily industrialised when compared to the African countries. On the other hand, South Africa is heavily short of gas (on an increasing rate), hampering industry and investment. Also, Rovuma gas fields in northern Mozambique is unlikely to cater to the regional market soon, due to long distance route to the market and lack of consumers along the potential pipeline route.
On 7th May 2019, the company notified the market that it had inked an MoU with Sable Chemical Industries Limited.
The company has a market capitalisation of A$16.03 million, and the stock had touched a 52-week high and low of A$0.073 and A$0.032 respectively. The stock closed at an intraday low of A$0.038 (as on 22nd May 2019), down by 7.317%. The last one-year return of the stock is 13.8%, and the YTD return stands at 28.1%.
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