Trading halt pending an update regarding its permitting

This morning we saw our 2020 Energy Pick of the Year Invictus Energy (ASX:IVZ) go into a trading halt pending an update with respect to the outstanding permitting of its project.

It’s difficult to say for sure what the announcement will be regarding but given the trading halt quotes that IVZ “will be providing an update in relation to finalising an agreement relating to the Company’s SG 4571 Permit with the Government of the Republic of Zimbabwe” we hope it is related to the production sharing agreement that IVZ said was nearing completion.

In our last note we said that we expected IVZ to make progress converting its Petroleum Exploration Development and Production Agreement (PEDPA) (which was signed in March 2021) into a 25 year production sharing agreement.

This would effectively be the final stage of permitting before IVZ has certainty around tenure, as well as having fiscal and legal frameworks in place, should IVZ make a large scale discovery during its maiden drilling program in ~June.

Below is an image from IVZ’s 2021 Investor Presentation, showing where a Production Sharing Agreement sits in the permitting process.

We will be watching for the announcement, which should be out on or before Monday. If the Production Sharing Agreement is finalised, then the pathway to the potentially basin opening drilling program will be much clearer.

This year’s drilling program is the main reason we are invested in IVZ.

For more on why we continue to hold IVZ in our portfolio and what we want to see the company achieve in 2022, check out our 2022 Investment Memo here.