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Nqobile Bhebhe, [email protected]

Australia Stock Exchange (ASX) listed and Zimbabwe-focused oil and gas exploration junior, Invictus Energy, says it has received strong interest from multiple domestic institutional investors with the intent of completing a strategic investment into the firm.

The firm praised the Government for showing commitment and support to the project. The oil firm recently said samples sent to a laboratory in the United States of America in mid-February confirmed the presence of not only natural gas, but also light oil condensate.

The natural gas is of high quality with minimal impurities and there is no hydrogen sulphate in the samples which is an undesirable constituent in oil and gas.

Above all, the oil discovered falls into the light oil classification and this is the oil classification that produces diesel, petrol as well as jet A1, a recent update showed.

Light oil fetches higher prices and requires less refinery purification than heavy oil and produces a higher percentage of diesel and gasoline.
Invictus is on record saying the country could be sitting on more than 5,5 billion barrels of oil.

A barrel of oil equivalent (boe) is a term used to summarise the amount of energy that is equivalent to the amount of energy found in a barrel of crude oil.

It said the project is one of the largest oil and gas exploration prospects to be drilled globally this year and if successful, could be transformative for the company and Zimbabwe.

Invictus Managing Director, Mr Scott Macmillan said its board recently concluded a successful visit to Zimbabwe and met with key Government officials following the confirmation of a gas-condensate discovery at Mukuyu to advance the implementation of the Petroleum Production Sharing Agreement.

“The Invictus Board has recently concluded a successful visit to Zimbabwe and met with key Government officials following the confirmation of a gas-condensate discovery at Mukuyu to advance the implementation of the Petroleum Production Sharing Agreement, the conclusion of which will deliver a number of corporate and project partnering options for the Company.”

To that end, he noted that Mangwana Capital has been engaged to lead strategic investment from Zimbabwean institutional investors.
Commenting on the development, Mangwana Capital managing director, Mr Ben Mbanga said “Mangwana Capital is pleased to provide further support to Invictus and off the back of the discovery at Mukuyu there is strong demand from local institutional investors to be a part of an exciting opportunity which will have a significant impact on the country.”

Invictus said since the confirmation of a gas-condensate discovery from the Mukuyu-2 well there has been a strong commitment from Zimbabwe to progress and complete the implementation of the Petroleum Production Sharing Agreement (PPSA).

“The PPSA will provide a stable and transparent legal and fiscal framework across the life of the Cabora Bassa Project and is anticipated to deliver several additional large international parties with the necessary confidence to progress additional proposals on farm-in and alternative financing options for the Company.”

Concerning finances, the firm said following the successful execution of the US$15,0m placement in December last year and receiving a further US$1,5m from the subsequent Rights Issue in March 2024, the company remains well capitalised to continue to progress its current activities and appraisal plan.

According to financial statements for the half-year period ending on December 31, 2023, the firm said it incurred a loss after tax of $4 149 060 (2022: $2 062 623) and had total net cash outflows from operating and investing activities of $33 010 739 (2022: $29  098 959).

Additionally, as at December 31, 2023, the Group had a significant working capital deficiency of $7 241 126 compared to June 30, 2023 where the Company had a working capital surplus of $20 674 734.

“The directors have prepared an estimated cash flow forecast and have determined that the group would be required to secure additional funds through equity or debt in order to pay its debts as and when they fall due and continue its cash expenditure on operating activities and at the Cabora Bassa Project.

“These conditions indicate a material uncertainty that may cast significant doubt over the Company’s ability to continue as a going concern, and therefore the Group may be unable to realise its assets and discharge its liabilities in the ordinary course of business.

“The financial statements have been prepared on the basis that the Company is a going concern, which contemplates the continuity of normal business activity, realisation of assets and discharge of liabilities in the ordinary course of business . . .”

The report further notes that directors think that the group’s exploration and development assets will attract further capital investment when required and directors expect the group to be successful in securing additional funding through debt or equity issues, when and if required.

“Should the company not be able to continue as a going concern, it may be required to realise its assets and discharge its liabilities other than in the ordinary course of business and at amounts that differ from those stated in the financial statements.”