Invictus Energy's (ASX:IVZ) Strategic Focus Amid Changing Industry Dynamics

  • October 30, 2020 02:25 PM AEDT
  • Team Kalkine
Invictus Energy's (ASX:IVZ) Strategic Focus Amid Changing Industry Dynamics

Summary

  • This year witnessed a considerable change in energy markets with COVID-19 reducing demand and oil prices, and economies looking to transition to less carbon intensive energy sources.
  • Independent oil and gas explorer, Invictus Energy (ASX:IVZ) evolved its strategies to respond to the COVID-19 infused challenges while operating in a lower risk gas market.
  • The Company aims to develop its Cabora Bassa Project by attracting a senior farm-in partner.
  • Over the past few months, Invictus boosted its ESG, signed MoUs, bagged EIA permit, obtained tenure extension for SG 4571 licence, and renewed the investment licence.
  • Invictus continues to actively screen the market for value accretive assets.
Gold MTF non-AMP

Invictus Energy Limited (ASX:IVZ) is dedicated towards developing high impact energy resources in Africa. The Company is currently developing the Cabora Bassa Project in Zimbabwe. Invictus is the 80% owner as well as operator of the Project that comprises of the lucrative SG 4571 exploration licence.

Currently, the Company is the sole oil as well as gas operator in country and enjoys a distinctive position to make good use of its basin master spot in the lucrative Cabora Bassa Basin.

Amid COVID-19 and changing industry dynamics, Invictus has been successful in advancing developments at the Project. Having said this, the Cabora Bassa asset is well placed to benefit from the transition to natural gas as an important less carbon intensive fuel source in the energy matrix.

To know about Invictus’ FY20 Performance & Robust Start to FY21, CLICK HERE.

How is Invictus Placed in Changing Industry Dynamics?

The portfolio in Cabora Bassa has a major gas and liquids mix. It appeals to a broader range of energy industry partners as well as investors. Consequently, the Company believes that it is well-positioned to monetise the resource if proven to nearer term cash flow.

Besides, Invictus was successful in signing two MoUs in the past one year- with Sable Chemicals and Tatanga Energy. This is likely to help the Company secure a market, and lock in a premium value to near-term cash flow for ~ 15% of the likely gas resource (if the exploration campaign is successful).

A lower risk gas market and strong ESG credentials also support Invictus’s prospects. Another factor a Invictus well amid changing industry dynamics is the fact that the Company’s team comprises of highly experienced, technically, and operationally outstanding people.

Decoding Invictus’ Strategies

Invictus Energy aims to be a major energy supplier in Southern Africa, which is currently combating a severe energy crisis. The Company firmly believes that if its exploration program is successful, there is a significant opportunity for Invictus to fulfil the region’s energy demand.

Impressively, there has been a progression from the primarily desktop studies phase to an on the ground activity phase of Invictus’ exploration campaign. Moving strategically towards its ultimate aim, Invictus has progressed on numerous fronts-

  • Harare office was opened in September 2019 where the Company has hired local staff and continues with key stakeholder engagements.
  • The tenure of the SG 4571 licence has been extended for an additional three years till August 2023. This retains Invictus’ operated position and high equity so that it can control the project and maintain a tight focus on costs.
  • Several third parties have been engaged to acquire equity at commercially attractive levels.
  • Approval of the application was obtained from the Zimbabwe Investment and Development Authority to renew the investment licence. This gives Invictus a formal recognition as a foreign investor in the country and enables access to fiscal benefits and incentives.
  • The Project’s EIA permit was awarded in August 2020.
  • The consent of the Environmental Management Plan completes the permitting obligations.

Invictus now plans to begin activities in the field including seismic acquisition and exploration drilling..

In the peak of the COVID-19 crisis, Invictus successfully brought in a local Zimbabwe Institutional Investor, the Mangwana Opportunities Fund.

The Company is notably making use of its sub Saharan knowledge of the wider East African Rift System and Permo-Triassic aged rifts. The focus remains on low cost conventional onshore or shallow water exploration that can be quickly and safely commercialised, at low cost.

Invictus shares traded at $0.057 mid-day on 30 October 2020. The Company will hold its next shareholder meeting on 27 November 2020.

 

 


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