The first well, Mukuyu-1, situated in the Muzarabani-Mbire area, will be 3.5 kilometres (km) deep at a cost of US$16 million, said Paul Chimbodza, managing director of the Australian company’s local subsidiary Geo Associates.
Mukuyu is part of the Cabora Bassa project in Zimbabwe, which is 80% owned and operated by Invictus through its interest in Geo Associates.
“All things being equal, we will start (at the) end of this month or first week of September,” Chimbodza told journalists at a media tour of the rig site.
Exploration drilling of the first well will take eight weeks, following which another 1.5 km hole will be sunk.
Invictus has been prospecting for oil and gas deposits for the past four years in the Cabora Bassa and Zambezi basins.
Chimbodza said the drilling phase is to ascertain resource availability and the quality of the deposits. He said there had been some delays to the project due to logistical issues, without giving details, but said these had not caused serious problems.
“The logistical costs of this undertaking is huge. We are seeing a bit of delay but nothing is a red flag for us,” he said.
Invictus deputy chairman Joe Mutizwa said the company remained hopeful the first well would bring positive results.
Invictus Energy has also announced a private placement to raise US$25 million at US$0.23 per share following the Company’s decision to sole fund the initial drilling campaign in Zimbabwe’s Cabora Bassa Basin.
Following the assessment of a range of options, including farm-in bids from multiple interested parties, Invictus’ Board and Management elected to sole fund the initial stages of the Company’s high-impact drilling campaign, which will target the Mukuyu and Baobab (Basin Margin) prospects.
The Company has received firm commitments from sophisticated and institutional investors to raise US$25 million (before costs) by way of private placement (Placement).
Under the Placement, Invictus will issue 108,695,652 new fully paid ordinary shares (New Shares) at an issue price of US$0.23 per new share, representing a 25.8 per cent discount to the last traded price of IVZ shares on 24 August 2022, being the last trading date before the Placement, and a 15.6 per cent discount to the 15-day VWAP prior to that date.
Placement participants will be entitled to a one-for-one unlisted option for every share issued, exercisable at US$0.40 with a five-year term.
The Placement was highly oversubscribed, with multiple new and existing institutional investors across North America, the UK, Asia and Australia entering the share register ahead of the Company’s drilling campaign.
Furthermore, the attaching options issued via the transaction are expected to provide meaningful additional capital to the Company’s balance sheet, at a materially higher valuation than the Placement, should the Company be successful in its drilling program.