Next Investors logo grey

Invictus shares surge as government paves the way for Cabora Project


Published 29-MAR-2021 12:43 P.M.


4 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.

Click Here to View Latest Articles

In a commercially important development, Invictus Energy Limited (ASX:IVZ), has negotiated a Petroleum Exploration Development and Production Agreement (PEDPA) following approval from the Zimbabwean government.

The PEPDA between Invictus’s 80% owned subsidiary, Geo Associates and the Republic of Zimbabwe was executed with the agreement being signed on behalf of the Government of the Republic of Zimbabwe by the Minister for Mines and Mining Development, Hon. Winston Chitando at a signing ceremony at State House in Harare on Friday 26 March 2021.

The agreement provides the framework for progression of the Cabora Bassa Project through the exploration, appraisal, development and production phases, the obligations and rights of each party, the minimum work program obligations to maintain the licence in good standing, and the security of tenure for the project duration.

The PEDPA provides the licence holder with the right to enter into a 25-year production licence following the exploration periods, and on this note the company is currently in the second exploration period.

Such is the significance of this development that Invictus’s shares were up more than 25% on Monday morning, building on recent strong gains that have seen its share price increase more than three-fold in three months.

By way of background, the Cabora Bassa Project encompasses the Mzarabani Prospect, a multi-TCF and liquids-rich conventional gas condensate target, which is potentially the largest, undrilled seismically defined structure onshore Africa.

The prospect is defined by a robust dataset acquired by Mobil in the early 1990s that includes seismic, gravity, aeromagnetic and geochemical data.

Agreement encompasses fiscal incentives

The PEDPA also provides for Special Economic Zone (SEZ) status for the Cabora Bassa Project which will facilitate a host of fiscal and non-fiscal incentives over the life of the project, including legal and financial stability, offshore banking, zero capital gains tax, tax holiday periods and 15% corporate rate thereafter.

His Excellency, President E.D. Mnangagwa who was the guest of honour at the signing ceremony underlined the importance of the project for his country in terms of industry prosperity, as well as the provision of electricity generation in saying, “The signing of the (PEDPA) agreement represents major strides in our efforts to tap into our oil and gas deposits, which is a new territory in the country’s mining sector.

"Other potential benefits of an oil and gas discovery included electricity generation, production of liquid petroleum, liquefied petroleum gas (LPG), fertiliser production and petrochemicals."

He noted that the signing of the PEDPA with Geo-Associates was testimony to the Government’s commitment to open up the economy to investment as well as engaging and re-engaging the global community to do business in Zimbabwe.

Vice President Constantino Chiwenga highlighted the internal benefits in positioning Zimbabwe to achieve broader goals as a result of having a reliable power supply in saying, "The exploration and development of oil and gas resources is a game-changer in making the Zimbabwe energy sector self-sufficient which is key in realising our national vision."

Macmillan points to potential for accelerated development

Invictus sees numerous positives stemming from this milestone event, and managing Director Scott Macmillan was quick to join the dots between having a collaborative and constructive relationship with the government and the group’s ability to rapidly develop the project.

This is a significant milestone for the project which provides the security of tenure and the confidence for the significant future investment ahead.

The PEDPA and the provision for the creation of a Special Economic Zone for the project lay out the pathway for accelerated development of the project on exploration success.

While Invictus is trading at levels not seen since 2014, further upside wouldn’t surprise given multiple catalysts are on the horizon, and as outlined below it has some catching up to do in terms of trading in line with other companies that arguably don’t have the same investment appeal.


General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.