IVZ - rig move to 1.2tcf gas, 73m barrel oil target complete - drilling days away now

Our Investment Invictus Energy (ASX: IVZ) now has a rig on site at the wellpad constructed for its next major drilling event…

(source)

IVZ re-affirmed drilling would start in “November 2026” which is just days away now.

Judging by that photo above, we think it could take a week or two to get that rig up and running again so we might be a week or two away from drilling.

With this next well IVZ is drilling its Musuma-1 target which has an unrisked prospective resource estimate of 1.2tcf gas and 73m barrels of oil.

Musuma-1 sits near the eastern boundary of IVZ’s project (part of the “central fairway”) inside the ~5.5BN barrel equivalent prospective resource.

(source)

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

(Which was actually labelled the second-largest discovery in Sub-Saharan Africa for 2023)

The first three companies in the image below are $424BN capped Shell, $290BN capped Total and then our little old IVZ.:

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

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 it should be a lot less technically complex because IVZ now has a “working hydrocarbon system” and a lot of data from the Mukuyu discovery.

IVZ’s last two wells were the first ever wells put into this project.

So this time around, IVZ should have a far better grip on where/what it is drilling.

We also hope it means this round of drilling can be done for a lot cheaper than the last two wells IVZ drilled too.

IVZ’s MD Scott Macmillan said in a webinar recently the well should cost ~US$6-10M. (source)

So IVZ shouldn't need to do a massive soul destroying $20-30M raise to get this well drilled.

We should get a cash balance update from IVZ within the next few days - so we expect to get a better understanding of how much cash IVZ might need then.

We think that once the market has clarity on how IVZ will pay for the well - that’s when IVZ’s share price can start trading free of any “cap raise weight”.

Especially with everything happening in oil markets right now.

We wrote about why we think oil prices could run from here in our Quick Take last week here.

(source - Our Oct 15 QuickTake)

What’s next for IVZ?

🔄 IVZ’s next well (Musuma-1)

It's now a countdown to IVZ’s next well - the 1.2 Tcf gas + 73M barrel condensate target (unrisked, prospective resource).

IVZ has confirmed drilling will begin in November this year. (source)

Here are the milestones we will be tracking:

• 🔄 Rig mobilisation to site
• 🔲 Confirmation of funding for the well
• 🔲 Drilling starts
• 🔲 Drilling updates
• 🔲 Drilling results