HIGHLIGHTS
• Mutapa Investment Fund of Zimbabwe committed to underwriting US$5 million of
US$10 million strategic capital raise at an issue price of AU$0.10 per share
demonstrating long-term support for Cabora Bassa Project.
• Securities issued will facilitate a secondary listing on the Victoria Falls Stock
Exchange (VFEX) through issuance of Zimbabwe Depository Receipts (ZDRs) to
support local liquidity and trading with substantial demand expected.
• Invictus reserves the right to accept oversubscriptions of up to US$5 million from
Zimbabwean investors as part of the local strategic capital raise.
• Petroleum Production Sharing Agreement to be implemented by Mutapa
Investment Fund on behalf of Republic of Zimbabwe.
• Funds to be utilised for Mukuyu-2 flow testing, advancing early monetisation
opportunities and purchase of long leads for new exploration wells.
• Farm-out process to secure strategic partner progressing well.
• Shareholder briefing to be held to provide update
Invictus Energy Limited ("Invictus" or "the Company"), is pleased to announce it has entered
into a binding share subscription offer with Mangwana Capital (Private) Limited (“Mangwana”),
which is partially underwritten by the Mutapa Investment Fund of Zimbabwe (“Mutapa”).
US$10M STRATEGIC LOCAL INVESTMENT
Mangwana is the manager of existing strategic investor Mangwana Opportunities, an investor
owned, closed-end investment company. It has coordinated the placement to institutional
Zimbabwe investors with an investment horizon of +10 years, and has supported Invictus’
Cabora Bassa Project over the years.
As part of the strategic local capital raise, Invictus is seeking greater participation by local
investors given the strategic importance of the project to Zimbabwe and significant local
interest via the Private Placement of US$10million.
Invictus as part of the share subscription offers up to US$10 million through the issuance of
151,515,152 shares at a share price of AU$0.10 at an AUD/USD FX rate of US$0.66.
Participants will receive an option to subscribe for one share for every four shares subscribed
for under the Private Placement exercisable at AUD$0.30 with a two-year option period.
The Company will issue shares subscribed for under the Private Placement (“Placement”) to
Mangwana Nominees (Private) Limited (“The Depository”), which will in turn list a non-issuer
sponsored depository receipt on the Victoria Falls Stock Exchange (“VFEX”). Mangwana will
seek to have shares from the placement listed as Depository Receipts on the VFEX to facilitate
local trading of the underlying securities.
Following approval of the listing from VFEX and partial underwriting by Mutapa, Mangwana is
completing a bookbuild for the Placement to raise up to US$10 million from Zimbabwean
institutional investors to close imminently. This comprises multiple other long-term
Zimbabwean investment funds with an intention to support the project through final stages of
exploration, development and into production.
Funds raised from the strategic Placement will be used to advance the Cabora Bassa Project,
including Mukuyu-2 flow testing and advancement of early monetisation opportunities,
purchase of long leads for shallow exploration wells targeting the Eastern Margin and Basin
Margin plays and general working capital.
The Placement will be carried out in a two-tranche Private Placement with Tranche One
comprising the issue of 113.6 million New Shares to raise US$7.5 million and will fall within the
Company’s available placement capacity under ASX Listing Rules 7.1 and 7.1A (“Tranche One”).
Tranche Two will comprise an additional US$2.5 million on the same terms as Tranche One,
subject to shareholder approval to be sought at a future Extraordinary General Meeting
(“EGM”) of shareholders. Invictus reserves the right to accept oversubscriptions of up to US$5
million at its absolute discretion and any oversubscriptions taken will settle in Tranche Two.
FINALISATION OF PETROLEUM PRODUCTION SHARING AGREEMENT
Participation of the Mutapa Investment Fund (the Sovereign Wealth Fund of Zimbabwe) adds
further strategic value as the Republic of Zimbabwe’s nominated participant in future
development of the Cabora Bassa Project through the Petroleum Production Sharing
Agreement (“PPSA”) and will be assigned as the beneficiary of the product/profit share and
equity holder on behalf of the Republic of Zimbabwe.
Mutapa Investment Fund's participation in this equity raise signifies the Government of
Zimbabwe's commitment and alignment to the Cabora Bassa Project. This is further reinforced
by the commitment to finalise and implement the PPSA, which provides a stable and
transparent legal and fiscal framework to govern the project.
The PPSA is designed to ensure fair and equitable sharing of the project's revenue between
the Government, Invictus and its partners, fostering a mutually beneficial partnership that
supports the project's long-term success.
Invictus Energy Managing Director Scott Macmillan commented:
“We are thrilled with the overwhelming support from Zimbabwean institutional investors,
particularly the Mutapa Investment Fund as our future partners in the project on behalf of the
Republic of Zimbabwe.
“Mutapa’s investment is a strong endorsement of the Cabora Bassa Project and recent
significant gas-condensate discoveries delivered from Mukuyu-2.
“Further support of institutional investors and the Mangwana Opportunities Fund strengthens
our investor base and in-country presence.
“Our partnership with Mangwana continues to assist the Company advance key objectives in
country and provide exposure for local investors to our world class Cabora Bassa Project.
“The Government of Zimbabwe's commitment, through the PPSA, provides a solid foundation
for a transparent and stable operating environment, which is crucial for the successful phased
and ultimate full-field development of Cabora Bassa.
“Our farmout process to secure a strategic partner continues to progress well with active
discussions advancing with multiple parties.”
Mutapa Investment Fund Chief Executive Officer Dr John Mangudya commented:
“The Government of Zimbabwe's commitment, through our support for Invictus and the
negotiations of the Petroleum Production Sharing Agreement, provides a solid foundation for a
transparent and stable operating environment, which is crucial for the successful development
of this world-class asset through our future partnership."
“The Mutapa Investment Fund’s participation in the development of the Cabora Bassa Project
has the potential to generate substantial returns while delivering sustainable benefits to the
nation for generations to come.”
“We are confident that our support for Invictus and the project lays the foundation stone for a
vibrant and productive oil and gas sector that will contribute to the creation of jobs, generation
of exports and delivery of energy security to Zimbabwe.”
Mangwana Capital Managing Director Ben Mbanga commented:
“Mangwana is pleased to have led this strategic investment process. Our fund investors
comprise a broad range of Zimbabwe’s institutional investors and our Investment in Invictus
will ensure that they share in the success of the Company.
“The Cabora Bassa project and Mukuyu discovery is a potential game changer for the country
which can bring about significant economic benefits and energy security to the entire region.
“We look forward to supporting Invictus to achieve their goals in Zimbabwe and furthering our
partnership with them.”
INVICTUS ENERGY LTD SHAREHOLDER BRIEFING
The Company will host a shareholder briefing webinar today on Monday 29 July at 10:30 AEST
/ 08:30 WST and details are as follows:
Presenters: Managing Director Scott Macmillan (via Zoom)
Time: Monday 29 July 2024 at 10:30 AEST / 08:30 WST
Where: Zoom Webinar, details to be provided upon registration.
To register your interest for the webinar please click through to the link below.
https://us02web.zoom.us/webinar/register/WN_tp4o7l0mQ2egGEHnZA3qgg
After registering, you will receive a confirmation email containing information about joining
the webinar.
The briefing will be recorded and posted to the Company’s website for shareholders unable
to attend the webinar.
NEAR TERM EXPLORATION STRATEGY
The Company will utilise Placement proceeds to progress the Cabora Bassa Project, including
Mukuyu-2 flow test and early monetisation studies, purchase of long lead items for exploration
wells and general working capital.
The Company is nearing completion of the well test design study and contract negotiations for
the provision of well services and equipment.
NEAR TERM CORPORATE STRATEGY
The Company's development strategy reflects the significance of the Cabora Bassa Basin
opportunity and the importance of gas in Southern Africa’s future energy mix.
Invictus is building internal capability to ensure it has the people and systems in place to
manage its transformation from explorer to developer, and ultimately producer.
The Company’s high equity stake across the three licence areas in a significant and strategic
resource provides multiple partnering and financing pathways for each licence area, including
upstream JV partners, services companies, regional development banks and other strategic
partners, which are being progressed to unlock value for the Company and its shareholders.
As a part of the Company’s plan to develop the resource base, Invictus is engaged in active
discussions on multiple fronts to bring in strategic participants in the Cabora Bassa Project
and manage Invictus’ equity position through the completion of a farmout to accelerate
development of the project.
MEDIUM TERM DEVELOPMENT STRATEGY
Invictus intends on transitioning from an oil and natural gas explorer to producer in
Zimbabwe in order to ensure long term, reliable and affordable energy, whilst providing
excellent returns to shareholders.
Invictus will leverage its position as the sole oil and gas resource holder in Zimbabwe to
develop a profitable production business that helps meet the region’s energy needs.
Dual gas-condensate discoveries declared last December at Mukuyu in the Upper and Lower
Angwa reservoirs marks a significant development in the Company’s history. Invictus is
embarking on executing its longer-term strategy for appraising and developing this resource.
The Company’s strategy is built on the strong foundation provided by Mukuyu, which is:
• A strategic sized gas-condensate resource.
• Very high-quality gas composition with negligible impurities, which will require
minimal processing for sale to downstream customers.
• Close to demand centres and existing infrastructure including the Southern Africa
Power Pool (SAPP) to facilitate large scale transmission of power.
• Liquid hydrocarbon content providing additional high value revenue stream in the
form of condensate and supply liquid petroleum gases (LPGs) which is in high
demand both locally and regionally.
The market opportunity for Mukuyu is based on the field being located in close proximity to
high energy demand sectors in Zimbabwe and in turn being a lower cost option for reliable
gas supply to these industries.
Invictus also forecasts significant demand for reliable power supply by Zimbabwe’s growing natural resources and industrial sectors.
These opportunities and development scenarios are currently being evaluated and
progressed, and will be announced in subsequent market updates as the sale agreements
become material.
As a result, Invictus’ strategy and plans for developing its Cabora Bassa Basin assets are
summarised below:
• Completing post-well studies program to maximise insights from existing wells.
• Reservoir engineering studies to determine how best to test and produce the Mukuyu
reservoirs to inform likely development concept.
• Refine well design, data acquisition program and well services contracts to deliver a
reduction in future Mukuyu well costs by 40%.
• Ongoing engagement with seismic, drilling and ancillary service providers to ensure
equipment availability in Zimbabwe on favourable terms.
• Conduct 3D seismic over the Mukuyu gas-condensate field to assist in delineating
resources and reservoir connectivity to determine future well locations, high-grade
areas of the field for early development and strategic locations for surface processing
and distribution facilities.
• Further appraisal drilling including well testing to build the resource base sufficiently
and underpin future development
• Phased development of Mukuyu to generate early cashflow, maximise capital
efficiency and optimise a larger scale full field development based on a full
understanding of the available resource:
o Pilot Phase: Expandable pilot project with onsite power generation or trucked
compressed natural gas (CNG) to Eureka Gold Mine through the Himoinsa and
Dallaglio Investments gas sale MOU.
o Phase 1: Large scale gas to power through existing SAPP network underpinned
by Mbuyu Energy.
o Phase 2: Piped gas to large industrial consumers underpinned by Sable
Chemicals.
• Exploration of Invictus’ dominant position in the Cabora Bassa prospective fairway,
including the Central Fairway, Eastern Margin and the potentially more liquid prone
Basin Margin plays to understand its full resource potential. Current planned activities
include:
o Maturation of additional prospects and leads from the CB23 seismic survey.
o Integration of Mukuyu results to apply to wider acreage area.
o Proposed exploration drilling campaign resulting from seismic activities above.
With an appropriate capital partner in place to support continued exploration and
development of the basin, Invictus Energy will be well placed to execute upon this strategic
plan.
Alpine Capital acted as Corporate and Financial Advisor to Invictus on the transaction.
MMC Capital acted as Corporate and Financial Advisor to Mangwana on the transaction