Farm-in process restarted, new offers being considered

In our most recent note on IVZ, in which we covered IVZ’s 7x increase in acreage from 100,000 to 709,300ha at its Zimbabwe gas project, we flagged that its farm-in option with Cluff Energy Africa might be put up for renegotiation.

Today, IVZ confirmed that Cluff Energy Africa’s option to commit to a farm-in over the project had been extended to 30 April and that it expects an updated binding farm-in offer by then.

IVZ also said that it is already in discussions with “multiple parties for additional farm-in offers”. This is a good sign as it will create competition amongst those interested parties.

With the seismic data reviews also likely to be nearing completion and the Sovereign Wealth Fund of Zimbabwe now backing the project we suspect that companies that alot of parties that may have been waiting on some of the political/permitting risks to be addressed are now interested in the project.

Today’s announcement now sets 30 April as the deadline for the farm-in process to be finalised leading up to the two well drilling program scheduled for June.

What’s next: We want to see the seismic data processing and analysis finalised, well locations confirmed, and some binding farm-in offers in the lead up to the maiden drilling program in June.

To see the key reasons we continue to hold IVZ in our portfolio and what we want to see the company achieve this year, check out our 2022 Investment Memo here.