Invictus Energy: Lens through Strategies and Asset Overview

  • Dec 23, 2019 AEDT
  • Team Kalkine
Invictus Energy: Lens through Strategies and Asset Overview

With Zimbabwe’s new government being pro-business, promoting foreign investment and supporting investor friendly reforms, businesses have noticeably increased their interest in the region. However, South Africa’s energy crisis is a growing concern and the region’s gas supply from offshore Mossel Bay and onshore Mozambique is deteriorating, given the lack of supply alternatives.

Zimbabwe - a relatively industrialised country (compared to majority of African countries) has large local demand and serves as the gateway and import/export corridor for Zambia, Botswana, DRC and Malawi to the port of Beira in Mozambique.

This catalyzes business opportunities, and, in this backdrop, we present to you an upstream E&P company Invictus Energy Limited (ASX: IVZ), which is seeking to develop potential regional markets in addition to significant local natural gas demand in Zimbabwe.

IVZ is focused on oil and gas in Sub Saharan Africa and is the 80% owner and operator of the Cabora Bassa Project in the Cabora Bassa Basin in northern Zimbabwe. The Project contains the largest, seismically defined, undrilled structure - the SG 4571 which has an elephant scale potential in one of the last undrilled rift basins in Africa on the doorstep of a massive market.

Before diving into IVZ’s significant asset portfolio, let us understand the Company’s strategy.

Invictus Energy’s Strategy

Invictus envisions to build a quality portfolio of high potential assets with low cost entry that can be de-risked through technical work and farmed out on good terms. Currently, IVZ has a farmout process in progress to cherry-pick a probable partner who can participate in high impact basin opening well. The Company aims to-

  • Build a portfolio of high potential oil and gas assets to deliver material benefits for shareholders;
  • Contribute to the development of the region and the communities tapped;
  • Capture under-explored/ emerging play types ahead of larger industry players;
  • Add value via leveraging its technical expertise and experience in the region;
  • Encourage disciplined and value driven capital allocation;
  • Benefit from growth opportunities and make value accretive additions to the overall portfolio.

Invictus Energy’s Asset Overview

The Licence area of SG 4571 in Cabora Bassa covers 250,000 acres in most prospective part of basin. IVZ was accorded with SG 4571 in 2017 (August) for a 3-year period. In the first two years of work program, which remains renewable, the Company has fulfilled all the work obligations, including:

IVZ’s Independent Prospective Resource Estimate marks the total Prospective Resource of 9.25 Tcf + 294 million barrels of conventional gas / condensate (gross mean unrisked) across SG 4571 in Mzarabani and Msasa prospects (Independently verified by Getech Group plc).

  • Mzarabani – structural 4-way dip closure, massive stacked potential

The Mzarabani Prospect alone consists of 8.2 Tcf + 247 million bbls of conventional gas-condensate and is one of the largest conventional exploration targets globally. It is defined by a robust dataset that was acquired in the 1990s by Mobil and is not drilled. It is a seismically defined structure - the largest onshore Africa. The analysis of new geochem samples from outcrop disclosed the potential to generate significant volumes of oil and gas and the additional mapped potential provides running room on success.

The estimated well cost at the Prospect is US$10 million (dry hole cost).

  • Msasa - structural 4-way dip closure

The Msasa Prospect - the second structural prospect and a world class multi-TCF conventional gas-condensate prospect consists of 1.05 Tcf + 44 million bbls.

Share Price Information

FY20 is expected to be an incredibly important one for the Company, as it progresses the Cabora Bassa Project through farm out and begins preparations for drilling the first exploration well. The prospective of IVZ’s acreage is indeed astounding for a company this size.

This is underpinned by the stock performance in the last 5 days, with a surge of 7.14% (as on 20 December 2019). On 23 December 2019, IVZ quoted $0.028 with a market cap of $13.48 million.


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