IVZ discovery samples in the lab for testing.
Shares Held: 5,740,409
Options Held: 2,967,713
Our portfolio company Invictus Energy (ASX: IVZ) is about to get its discovery samples into the lab.
Late last year IVZ drilled the Mukuyu-2 & Mukuyu-2 sidetrack wells at its oil & gas project in Zimbabwe.
After the sidetrack well in December, IVZ declared a double discovery hitting 34.9m of net pay across two different reservoir targets (Upper and Lower Angwa).
Today, IVZ confirmed that the samples from its discovery would be in the lab for analysis later this week.
Lab analysis results are then expected in ~2 weeks time.
The lab results are important because they are the precursor to IVZ’s planned flow tests later this year.
What does IVZ’s discovery mean for the company:
Below are some of the key reasons and our previous coverage of why we think IVZ’s basin opening discovery is a major milestone for the company.
- IVZ holds the key to the basin, if a discovery is made (Basin Master position) - IVZ holds ~80% of its project and if a discovery is made it gets to decide what happens with the project post-discovery.
- Oil and gas majors have paid multiples of IVZ’s current valuation for discoveries across East Africa - some transactions were done at 12x to 224x of IVZ’s implied working interest % on its project.
- Basin Margin ‘String Of Pearls Play’ undrilled - IVZ has ~1.2Bn barrel oil equivalent prospective resources across basin margin targets. Basin Margin targets in the East African Rift System have an exploration success rate of 100% - 14 discoveries from 14 wells.
- Directors who have had success in the East African Rift System - After drilling its first well in 2022, IVZ appointed John Bentley as its chairman and Robin Sutherland as its non-executive director. John built from the ground up and sold Energy Africa to Tullow Oil for US$500M and Robin worked for both Energy Africa and Tullow Oil.
- IVZ is looking to do what Africa Oil has done before - back in 2012, Africa Oil Corp (TSX.V:AOI) drilled a string of successful wells and delivered a 1,000% share price run and sustained re-rate. We are hoping IVZ does the same thing.
- Carbon offset projects to generate carbon credit revenues - IVZ is in the early stages of building out a carbon offset business that could generate revenues from carbon credits. IVZ is a unique small cap exposure to global carbon credit prices.
- One of the biggest conventional oil and gas prospects globally - IVZ has a gross unrisked prospective resource of ~5.5 billion barrels of oil equivalent making it one of the largest conventional oil and gas targets in the world.
- The Zimbabwe Sovereign Wealth Fund is aligned with IVZ - Back in March 2022, IVZ signed a head of agreement with the Zimbabwe Sovereign Wealth Fund which would see the fund take an interest in the project - this aligns the government and the people of Zimbabwe’s interests with IVZ.
- US$30M in work done by Mobil before IVZ acquired the project - The project had US$30M in legacy data leftover by Mobil from the 1990’s. Interestingly Mobil had never drilled the project before IVZ took control of it.
- Strategically located next to South Africa - IVZ’s project sits next to South Africa which is one of Africa’s biggest energy consumers and is expected to be structurally short of energy supplies over the next decade.
What’s next for IVZ?
In IVZ’s December quarterly report we saw IVZ talk about three key catalyst for the upcoming year.
IVZ expects to run a flow test at its Mukuyu-2 discovery, prepare for 3D seismic across Mukuyu and also start preparing for a new high impact well across one of its many other targets.