IVZ renews licences at its Mukuyu discovery

Published 18-JUL-2024 11:43 A.M.

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Invictus Energy (ASX: IVZ) just had its licences renewed over its Mukuyu discovery.

IVZ confirmed that “Special Grant 4571” had been extended for a further 3 years by the “Mining Affairs Board” - giving IVZ tenure until June 2027.

The licence area renewed holds most of IVZ’s central fairway targets - where IVZ has ~4.3 billion barrels of its total ~5.5 billion barrels of oil equivalent prospective resource.

Last year IVZ drilled two wells across that well at its Mukuyu target and declared 2x discoveries across two different reservoirs (Upper and Lower Angwa).

The discovery was large enough to be ranked the “the second largest discovery in Sub-Saharan Africa” by global energy research firm Wood Mackenzie.

IVZ’s discovery was placed at an estimated 230 million boe (1.3 TCF) which ranks it amongst discoveries made by oil and gas supermajors like Shell and TotalEnergies.

Since the discovery news last year, IVZ’s focus has been on three different key milestones:

To get its production sharing agreement finalised - this is a key permit for IVZ.
Look at bringing in project partners - we think this would de-risk IVZ from a funding perspective and validate its discovery to the market.
Updating its prospective resource - this will give the market a number to understand the size of the discovery IVZ has made.

IVZ’s Managing Director Scott Macmillan laid out the plans for the next 12 months pretty well in a recent shareholder webinar - which the market seemed to like…

IVZ’s share price is up ~50% from its lows since that webinar.

Here is a link to that shareholder briefing:

(Watch Video)

How today’s news impacts our IVZ Investment Memo:

“Basin Master” position in Zimbabwe
IVZ holds an interest in the entire Cabora Bassa basin. In the event the company officially declares a discovery, any major company looking for exposure to the basin will need to negotiate a deal with IVZ.

Source: “Why we Invested” section - IVZ Investment Memo 13 July 2023

The renewal of IVZ’s license means the company retains its position as “Basin Master”.

IVZ holds a majority 80% interest in the project and with a discovery now declared on the project will be in a position of strength when negotiating with potential strategic partners.

De-risked project
IVZ has already confirmed a working conventional hydrocarbon system at its project. All the company needs to do to declare an official discovery is bring an oil/gas sample to surface.

With the data and lessons learnt from its first well, we hope IVZ will deliver this milestone.

Source: “Why we Invested” section - IVZ Investment Memo 13 July 2023

We see today’s announcement as adding to this reason from our Memo - not from a technical perspective but more so from a permitting perspective.

We think IVZ tenure extensions de-risk its discovery from a permitting perspective.