Yesterday our 2020 Energy Pick of the year Invictus Energy (ASX: IVZ) put out an update on the analysis work going on for all the seismic data the company has put together leading upto the big drilling event in July of this year.
In the announcement IVZ also confirmed that it still on track to drill the Mukuyu-1 well in July of this year which will be targeting an independently estimated prospective resource of 8.2 trillion cubic feet (Tcf) + 247 million barrels of conventional gas condensate (gross unrisked basis).
Most of yesterday’s announcement was however focused on IVZ’s latest analysis around all of the 2D seismic that is available over its project area. The key takeaway being that IVZ believes the sections immediately below the shallow “Horizon 200” target at the Mukuyu target could be comprised of multiple stacked hydrocarbon bearing zones, ranging in thickness from 40 to 80m.
The significance of this is that the all of the data now correlates with the amplitude anomaly at the Horizon 200 target with all of the data suggesting a potential Direct Hydrocarbon Indicator (DHI).
IVZ shot ~840km of 2D seismic data and then went and reprocessed ~US$30M in legacy datasets left over by Mobil who ran some basin wide seismic surveys in the 1990s.
IVZ has now combined all of this data and looks to have refined the Mukuyu target to the extent that the company has a relatively decent idea of what it is targeting and where it expects to intercept gas bearing reservoirs.
Another key takeaway from all of this is that IVZ have managed to put together another key target that will be the focus of the upcoming Mukuyu-1 well - the 200 Horizon (shown in the image below). Importantly this sits outside of the current prospective resource and is extremely shallow at a depth of only ~850m.
The image below from yesterday’s announcement really helped us visualise what all of this seismic data is telling us, with a clear breakdown of the different stacked targets.
We suspect that with all of the new findings after processing all of this seismic data that IVZ could potentially look to update its prospective resource, especially given the newly identified “Horizon 200” target is currently excluded in the prospective resource figure.
With drilling expected to commence in ~2 months it may not be enough time, but we would like to see just how big of a target this well is actually shaping up to be.
We have been invested in IVZ since September 2020 and are looking forward to this year's big drilling event.
To see all of the key reasons why we invested in IVZ, what we expect to see the company achieve this year and the key risks to our investment thesis, check out our 2022 IVZ Investment Memo here.
We also note that IVZ’s Managing Director Scott Macmillan is holding a technical briefing to discuss these results at 12:00 AEDT today, which you can register for using this link - https://us02web.zoom.us/webinar/register/WN_h2tv-jIwT2uIrIi54UrUuQ