Oil surging. IVZ set for big drilling event this half. Meme stock re-activation coming?

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 13,025,947 IVZ Shares and 7,837,234 IVZ Options and the company’s staff own 1,260,417 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. This information is general in nature about a speculative investment and does not constitute personal advice. It does not consider your objectives, financial situation, or needs. Any forward-looking statements are uncertain and not a guaranteed outcome.

This morning, we woke up to the oil price delivering a big green candle:

(source)

Hopefully it's a small sign that the “small cap exploration gods” will be smiling on Invictus Energy (ASX:IVZ) over the coming months as it charges toward another big exploration drilling event.

It’s starting to look like the “three ingredients for a pre-drill share price run up” could be on for IVZ:

1. Visible drill progress (rig contract, mobilisation, firm spud date) - Last week IVZ started mobilisation for its 2026 well. (source)
   
   
2. Macro thematic cooperation (Oil and gas on the market's radar) - see that pic from above... who knows what will happen next.
   
   
3. A credible timeline (a drill within the next 6 months) - IVZ’s most recent announcement says drilling to begin this half (but also buried on an image in page 4 it says Q32026)) for its next well.

Of course no one knows for sure what will happen with oil prices - it's all speculation.

However, as long as the oil price is trading at or above US$80-100/barrel, we think the market could show a lot of interest in IVZ’s 2026 well.

After a few years quietly getting Zimbabwe’s only PPSA (Petroleum Production Sharing Agreement) tidied up and locked away...

And before that, making two hydrocarbon discoveries in 2022 and 2023 - Zimbabwe's first ever oil and gas discovery.

(and Sub-Saharan Africa’s second largest discovery of 2023 at ~1.3 Tcf gas / ~230M barrels of oil equivalent)

With a PPSA in hand IVZ has unlocked the ~5.5 billion barrel equivalent (gross mean unrisked estimate) Cabora Bassa Basin in Zimbabwe.

Yes... an ASX small cap IVZ holds the keys to one of the last unexplored basins in Africa.

And now... IVZ is weeks away from drilling its third exploration well - the first in two years.

(source)

Last week’s announcement said a spud date of H2 2026.

But if you look close enough, the image on page two said “Q3 2026”:

Did the company forget to update this image? Or is this the actual correct spud date? Over the coming weeks we will find out...

(source)

IF IVZ’s previous drilling window is anything to go by, we are getting pretty close to drill time.

Here is when IVZ spudded its last two wells - both started in September:

(source)(source)(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

With this year's well on a completely NEW target (Musuma-1), IVZ is targeting ~1.2 Tcf gas and 73 million barrels of condensate resource (gross mean unrisked).

Musuma is one of many targets IVZ has across its broader ~5.5 billion barrel oil equivalent prospective resource inventory.

But the focus will again be on the central fairway (where IVZ’s ~4.3BN barrel oil equivalent prospects sit).

It will be the first well IVZ drills since making its Mukuyu discovery across two wells in 2022/2023.

The difference with this year’s well is it will be a lot shallower (~1,500m target depth versus ~3,360m depth for the 2022-2023 wells).

AND a lot less technically complex because IVZ already has a “working hydrocarbon system” and will have a lot of data from the Mukuyu discovery to go off when drilling this well.

As a result it should be a lot cheaper than the previous wells IVZ’s drilled too - IVZ’s Managing Director Scott Macmillan said in a recent webinar:

"so we're well on track from a costing perspective to deliver a well within that cost range that we provided there of 6 to 10 million."

(source - May Webinar)

Last week IVZ awarded the following contracts:

1. Wellpad construction and civil works - including access road upgrades and water supply.
   
2. Rig mobilisation - A team is now on the way to Zimbabwe, with the rig already in country.

And said that the finishing touches were being put on the following:

1. Long-lead equipment (wellheads and tubulars)
   
2. Well services - contract award targeted "in the coming weeks"
3. Logistics and mobilisation - to be awarded once the drilling and well services providers are locked in.

The rig has been in country on-site “warm stacked” ever since the two wells were drilled in 2022-2023. (source - May Webinar)

So there won't be a lengthy rig move process this time around. Instead it's just getting the people in country, on site and the rig brought up to temperature properly before IVZ can go drilling.

(thankfully, flying people and parts into Zimbabwe is a lot easier than moving an entire giant rig)

Not long left now...

And over the weekend, it looks like the exploration gods are blessing IVZ’s 2026 well too.

Oil prices are up again this morning after things kicked off again between the US and Iran over the weekend.

Which means the Strait of Hormuz, where ~25% of global oil and ~25% of the world’s LNG pass through is shut...(source)

(source)

It hasn’t really happened yet, but the last time the world experienced a sustained supply shock out of the Middle East was back in 1973 during a war between Israel and other middle eastern countries.

Oil prices rallied hard, came off a bit and then rallied hard again - we have had the first leg up, now the pullback, IF things don’t calm down we could get a similar style second run up:

(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

For now the world has been able to keep a lid on oil prices - mostly by drawing down reserves and above ground inventories.

And from countries like China pulling back on purchases (decreasing the demand for oil to match the disrupted supply). (source)

(source)

IF this supply disruption runs over a longer period of time, who knows what will happen to the oil price.

(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

We are seeing a few respectable names come out and call a big run in oil prices on social media platform X. (source) (source)

No one knows what will happen with oil prices - but as long as the oil price is trading at or above US$80-100/barrel we think the market could show a lot of interest in IVZ’s 2026 well.

Small cap O&G explorers share prices tend to run up into drill campaigns (IF oil & gas prices are high). Here's why.

We’ve talked about this a lot in the past.

It’s a pattern we've watched play out over and over again in small cap oil & gas exploration stocks drilling high impact exploration wells.

The share price runs BEFORE the drill result.

Sometimes 2x. Sometimes 5x. Sometimes more. All in anticipation. No results on the table yet.

(Over the past couple of years while oil & gas sentiment sucked, this hasn't played out as much, but oil & gas sentiment is much better this year)

Why this happens

1. Investors accumulate in advance. In the weeks and months before a well spuds, online forums light up, speculators front-run the binary event.
   
2. News flow stacks. Rig contract signed. Rig mobilised. Permits granted. Final location confirmed. Each announcement is an incremental data point that primes expectations.
   
3. Imagination prices the upside. The market gets to dream about what a monster discovery could look like without the hard data to argue against it. Every "maybe" becomes a bid.
   
4. Commodity macro lines up. When oil & gas is already on the market's radar (like right now), the pre-drill run is stronger. We think we are in one of those windows.

In frontier O&G, the rumour can last 6+ months, and then any "sell the news" part depends entirely on the result.

IVZ has done it before.

In the run up to Mukuyu-1 in 2022, IVZ went from ~20c to almost 40c on anticipation alone.

We bought into a placement at 23c in September 2022.

(we are still holding a lot of those 23c shares...)

By the time the rig was on location and spud was imminent, IVZ was trading well above 30c:

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

The last 2 years have been a different phase.

No drilling.

The Qatar deal falling over.

Oil and gas macro in the graveyard.

IVZ’s share price drifted lower and lower.

But we think the markets are slowly shifting back into a position where it creates a pre-drill run-up scenario.

A pre-drill run, which we think needs three ingredients:

1. Visible drill progress (rig contract, mobilisation, firm spud date)
2. Macro cooperation (O&G on the market's radar)
3. A credible timeline (a drill within the next 6 months)

For IVZ right now, all three things are lining up pretty nicely.

Preparation for drilling officially started last week, macro is cooperating and there is a timeline to drilling - inside H2-2026.

If this pattern holds, IVZ’s share price can start to build up some momentum into:

• Rig mobilising to the drill pad.
• Firm spud date
• First zones tested during drilling

None of those are the final drilling results, just the anticipation to them.

They are pre-result catalysts and each one can re-rate IVZ’s share price in its own right.

To be clear: "tend to" is not "always". Plenty of small cap O&G stocks drill with no pre-drill run and have to rely on a genuine discovery to move. This is a pattern, not a law.

We do note though that IVZ hasn't really laid out a concrete funding plan for the well just yet. IVZ had about ~$3.1M in cash at 31 March 2026 and raised $10M in April. (source) (source)

IVZ has also mentioned the well should cost circa US$6-10M. (source)

Time will tell if IVZ goes it alone with drilling the well itself or bringing in a farm in partner.

Another reason we think IVZ could do well in the current environment is because it has already got years of market awareness built into the name from past drill programs.

A lot of the small cap market knows the story - IF/When the macro is hot and IVZ is drilling, most will tune into what IVZ is doing.

Our IVZ “meme-stock” re-activation theory is also at play here

We have a theory that when companies build up a following big enough and become “meme stocks” - they have an army of investors engaged enough for the company’s share price to do great when things are going well and bad when things go wrong or get boring.

In summary, a meme stock:

• Lives rent free in many people's heads.
• People check for announcements regularly from the company (even though they may not admit it).
• Company starts doing something exciting again.
• Past investors come back just in case “it actually happens” this time.

AND if the company actually delivers something material - there are enough eyeballs on the stock to re-rate the stock to a level to reflect the company’s new progress.

And the cycle continues.

Luckily, IVZ has been able to cultivate this following and the share price tends to do well in the lead up to its big drill programs (probably a function of the targets being genuinely massive as well).

IVZ’s share price went from ~20c to ~40c (without a PPSA) the first time around when it went from drilling confirmed to drill rig spinning:

(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

We expect our “re-activation” thesis to really get going now.

(You can read about our re-activation theory in detail here: The reactivation thesis: When meme stocks awaken)

It’s important to note this is a thesis, and there’s no exact concrete formula or science behind market moves.

At least this time around we will see no more ‘where is the PPSA’ posts.

(source)(source)(source)(source)

And hopefully more of these instead:

(source)(source)(source)(source)(source)(source)(source)(source)(source)(source)

(it was amazing to see one Reddit user get an apology meme out to Scott already after the PPSA was signed a few months ago)

(source)

Now it's over to IVZ to drill its well this year, and we will see what happens to its share price this time around (with a PPSA signed):

(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

A quick reminder on what IVZ has right now

IVZ owns 80% of a giant block in the Cabora Bassa Basin in Zimbabwe.

IVZ is exploring and developing what is one of Africa's largest and last untested frontier rift basins.

IVZ has the only Petroleum Production Sharing Agreement (PPSA) signed with the Republic of Zimbabwe.

The PPSA sets the precedent (financial and non-financial framework) for oil and gas investment in the country.

Think of it like how Woodside made an oil and gas discovery in WA in 1971 (the North Rankin gas field on the North West Shelf) and then took 8 years negotiating with the Australian and WA governments on how the development would be shared - the State Agreement was finally signed on 27 November 1979 - the rest is history.

Of course it's a bit early to be calling IVZ the “Woodside of Zimbabwe”, but the origin stories so far are looking pretty similar.

Check out our deep dive on the PPSA here: IVZ signs landmark agreement with Zimbabwe. Drilling in the coming months.

The PPSA was signed back in May:

(source)(source)(source)(source)

So effectively, IVZ is now holding the keys to anyone wanting a piece of a potential 5.5 billion barrel oil equivalent prospective resource estimate.

On a project that has a gross unrisked mean prospective resource of ~5.5 billion barrels of oil equivalent (estimate).

(plus this oil & gas doesn’t have to pass through the Strait of Hormuz to get to China. Just saying...)

(source)

Up until a few years ago, the project had never been drilled.

In September 2022, IVZ started drilling its first well, Mukuyu-1, and by December had "opened up the system" by defining a working hydrocarbon system.

In 2023, IVZ followed it up with Mukuyu-2, which delivered an official gas-condensate discovery.

From the Mukuyu drill campaigns, IVZ confirmed:

• ✅ Gas readings 135x above background levels
• ✅ Multiple potential gas-bearing reservoir units (up to 13 in the Mukuyu-1 sidetrack)
• ✅ ~900m gross interval, with 225m in potential hydrocarbon-bearing zones (upper Angwa target)
• ✅ Multiple seals identified with several hundred-metre thicknesses above the deeper primary targets
• ✅ Elevated fluorescence, indicating condensate or light oil
• ✅ Commercial helium grades up to 0.1% (helium is a valuable by-product)
• ✅A working conventional hydrocarbon system declared 🛢️
• ✅An official gas-condensate discovery on Mukuyu-2

IVZ’s Mukuyu discovery was declared by global research firm Wood Mackenzie to be the second-largest discovery in Sub-Saharan Africa for 2023.

The first three companies in the image below are $326BN capped Shell, $255BN capped Total and then our little old IVZ.

Source: IVZ Secures Gas Sample From Major Discovery (March 2024)

The discovery in 2022 happened while Liquefied Natural Gas & oil prices were running - then as prices fell away, so did IVZ’s share price (despite that Mukuyu-2 well delivering a discovery again).

Then IVZ went into a bit of a newsflow vacuum, and with that lack of drilling activity, IVZ’s share price fell away even more.

Now... oil and gas prices are starting to rise again.

Which makes for the right macro setup for IVZ to have heading into its 2026 well...

Over to IVZ to deliver now over the next few months.

What we want to see next from IVZ

IVZ’s next well (Musuma-1)

Now it's all about the countdown to IVZ’s next well - the 1.2 Tcf gas + 73M barrels of condensate target.

IVZ expects to be drilling in the second half of this year.

Here are the milestones we will be tracking:

• 🔄 Rig mobilisation to site
• 🔲 Confirmation of drilling funding
• 🔲 Drilling starts
• 🔲 Drilling updates
• 🔲 Drilling results

What could go wrong

The key risk in the short-term is “delay risk”.

There is always a possibility that the drilling program slips into 2027 or that it gets missed entirely.

The macro environment could change, and it may lead to a delayed drill program - in which case IVZ’s share price could suffer.

Delay risks.

IVZ has been "about to drill" multiple times. If Musuma-1 slips into 2027, the market loses patience.

Source: “What could go wrong” - IVZ Investment Memo 21 April 2026

Other risks

Like any early-stage exploration company, IVZ carries significant risk, here we aim to identify a few more risks.

We are yet to see a concrete funding plan for the upcoming Musuma-1 well, which is estimated to cost between US$6 million and US$10 million. If IVZ cannot secure a farm-in partner to share these costs, it will likely need to launch a capital raise that could result in immediate shareholder dilution.

Even though IVZ has valuable data from its prior Mukuyu discovery, Musuma-1 is a completely new geological target. There is always a high statistical probability of drilling failure or hitting uncommercial quantities of gas, making the upcoming campaign a high-stakes binary event.

The current enthusiasm for the stock is heavily reliant on elevated oil and gas prices driven by recent geopolitical tensions. A sudden drop in global energy prices or a shift in macroeconomic sentiment could quickly damp market interest and halt any pre-drill share price momentum.

Finally, operating frontier assets in Zimbabwe introduces inherent sovereign and jurisdictional risks. While the landmark signing of the Petroleum Production Sharing Agreement provides a strong framework, navigating a developing regulatory environment can still result in unforeseen operational or bureaucratic bottlenecks.

Investors should consider these risks carefully and seek professional advice tailored to their personal circumstances before investing.

Our IVZ Investment Memo

You can read our IVZ Investment Memo in the link below.

We use this memo to track the progress of all our Investments over time.

Our IVZ Investment Memo covers:

• What does IVZ do?
• The macro theme for IVZ
• Our IVZ Big Bet
• What we want to see IVZ achieve
• Why we are Invested in IVZ
• The key risks to our Investment Thesis
• Our Investment Plan