IVZ Discovery? A few more weeks till we know… but here are some hints
Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 5,896,999 IVZ shares and 2,833,212 IVZ options and the Company’s staff own 161,667 IVZ shares and 51,679 IVZ options at the time of publishing this article. The Company has been engaged by IVZ to share our commentary on the progress of our Investment in IVZ over time.
Is it...
or isn’t it...
An IVZ “Discovery”.
We won’t find out just yet...
The wait continues for a few more weeks...
Moveable hydrocarbons have been recovered to surface from IVZ’s non-primary target...
There are now confirmed “Multiple hydrocarbon bearing intervals” in the two primary targets below.
Work prior to attempting fluid sampling in the primary target zones showed moveable hydrocarbons...
Trip gas and connection gas in the lower sections - lots of gas filling up the borehole...
Everything is looking like it’s pointing to a potential discovery:
BUT...
Delays caused by the sampling tool breaking sampling AND the backup sampling tool breaking too (🤦♂️) have seen the borehole conditions deteriorate.
So IVZ is now doing a sidetrack well to try and get the fluid samples from the primary target zones.
This is a simple vertical sidetrack well - compared to the side track well at Mukuyu-1.
There is a lot to digest in this announcement - many positives, but also a 21 to 28 day delay to do the sidetrack well until we find out the final results.
IVZ managing director Scott Macmillan is doing an investor webinar at 11am AEDT, and anyone can join
We will be tuning in to get all the details and interpretation from the IVZ MD:
Click here to register for the IVZ webinar
Our key takeaways from today's announcement:
- Gas recovered from the secondary Pebbly Arkose reservoir target - shows that there are reservoir sections in the well that can bring samples up to surface.
- Multiple hydrocarbon intervals in the primary targets - IVZ confirmed multiple intervals around the same position where the onboard fluid analysers were indicating liquid hydrocarbons.
- Higher than expected reservoir pressures and connection gas - both signs of a potentially strong reservoir in the primary Lower Angwa reservoir. The only reason IVZ couldn’t sample these reservoirs was because of tool failures, from which the delays caused deterioration in the hole conditions.
What’s next?
Mukuyu-2 sidetrack well - 21 to 28 days to complete 🔄
The primary issue for the sampling program was the overpressures at the end of the Lower Angwa reservoir.
So IVZ is going back in with a vertical sidetrack well where it will look to TD (Total Depth) at a lower ~3,400m (vs the ~3,718m of Mukuyu-1).
The plan is then to try and run a sampling program in the Upper Angwa and the upper sections of the Lower Angwa reservoirs.
Basically, IVZ is looking to drill to a shallower depth so that the drillhole conditions are more suitable for a sampling program - the more suitable the hole conditions the less likely IVZ experiences sampling tool failures.
IVZ expects the sidetrack well to run for 21 to 28 days.
What are the risks?
In the short term, the key risk for IVZ is exploration risk.
The Mukuyu-2 sidetrack may not deliver the desired results, and in that scenario, we would expect the company’s share price to drop significantly.
Below is a list of the key risks we listed in our IVZ Investment Memo:
Our IVZ Investment Memo
In our IVZ Investment Memo, you can find the following:
- Our IVZ Big Bet
- Why we are Invested in IVZ
- Key objectives we want to see IVZ achieve
- The key risks to our Investment thesis
- Our Investment plan
General Information Only
S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.
