Invictus raises Zim oil project funding

Source: Invictus raises Zim oil project funding | The Herald 18 NOV, 2019

Invictus raises Zim oil project funding

Golden Sibanda Senior Business Reporter
AUSTraLIA Stock Exchange-listed Invictus Energy has raised $1,5 million Australian dollars through a placement to fund further exploratory activities on its Muzabani prospect, which has shown huge potential for existence of gas and oil deposits.

This comes as the junior petroleum exploration company, prepares to start the first hole drilling to establish possible existence and commercial viability of oil and gas believed to be embodied within its Muzarabani prospect in the Cahora Bassa Basin.

Cahora Bassa is one of Africa’s largest seismically defined yet undrilled onshore structure and has the potential to be the continent’s next major hydrocarbon province.

Findings thus far strongly support the possible existence of 1,3 billion barrels of oil equivalent (BOE) or alternatively an estimated resource of 206 billion litres of oil in the Cahora Bassa Basin in Muzarabani.

The barrel of oil equivalent (BOE) is a unit of energy based on the approximate energy released by burning one barrel (42 US gallons or 158,9873 litres) of crude oil.

The BOE is widely used by oil and gas companies in their financial statements as a way of combining oil and natural gas reserves and production into a single measure.

Invictus said it had received binding commitments for a placement to raise $1,5 million (before costs) by issuing 57 692 310 shares at an issue price of $0,026 which represents a 13,3 percent discount to the 10 day Volume Weighted Average Price.

“The demand and bids for the placement was well in excess of our target and we thank our existing shareholders and the new incoming shareholders for their strong support. The company looks forward to an exciting growth phase as we focus on discussions with potential farm-in partners and the future exploration programme,” Invictus Energy managing director Mr Scott MacMillan said in a statement last week.

The Australian company said this also comes as farm-out discussions were ongoing with significant interest at recent Africa Oil Week presentation to partner the company in a project that could possibly change the economic face of Zimbabwe.

A farm out agreement is an agreement entered into by the owner of one or more mineral leases, “farmor” and another company who wishes to obtain a percentage of ownership of that lease or leases in exchange for providing services, called the “farmee”.

Typical service in a farm out agreement is drilling of one or more oil and/or gas wells.

Together with the existing cash reserves, the new funds ensure that Invictus is well funded through this initial growth phase and as farm-out discussions develop, preparatory works for the on ground exploration phase have also set in motion.

Cahora Bassa was first defined by Mobil during the 1990s, which spending US$30m acquiring 2D seismic, gravity and aeromagnetic data and has remained essentially untouched until it was picked up by Invictus.

The company subsequently reprocessed the Mobil data, which increased the size of the Muzarabani primary target while identifying and quantifying other high potential horizons above and below the Alternations Member.