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.
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:
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:
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.
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
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