Thanks for the German article. Here is an easy translation for everybody. No wonder why IVZ in Germany is up 400% they are liking this company a lot.
ReconAfrica: Is Invictus Energy the successor as a course rocket?
We have had captivating months behind us. Thanks to our early positioning with Reconnaissance Energy Africa (NASDAQ: REV), SD readers were able to participate in the most exciting oil story of the decade and generate over + 1,200% profit. Invictus Energy (NYSE: Zimbabwe), which is active in Zimbabwe, is the first paying attention to a stock that could turn out to be a successor.For some time now, I've been chewing the mantra of being absolutely involved in the energy sector.
Of course, this mainly applies to solid energy stocks that can hold their own in every market phase. In the case of high-risk opportunities, you should therefore only act with tolerable amounts according to your own risk appetite. Nevertheless, you should keep an eye on the following company in the near future.
Top dog in ZimbabweOne thing has to be left to the raw materials industry, the sector is not lacking in creative names. Some are chosen so inappropriately that you don't want to bet a cent on them. Others sound so euphoric that one would like to overweight them.
The Australian oil and gas explorer with his mission in Zimbabwe calls himself “Unconquered”, which goes by the name of Invictus Energy.The goal is the successful exploration of the SG 4571 concession, the little explored Cabora-Bassa basin, one of the last undeveloped oil and gas basins in Africa. SG 4571 covers around 100,000 hectares in the most promising part of the basin in the north of Zimbabwe.The project, previously explored by Mobil Oil, contains one of the largest structures on the African continent and is about to be successfully explored.Exciting exploration targetThe company's most exciting and at the same time most important asset - thus also the main exploration target - is the Mzarabani deposit, which covers around 200 square kilometers and is one of the largest as yet unexplored onshore deposits on the African coast. Interestingly, an independent resource estimate of a whopping 8.2 Tcf (trillion cubic feet) and 247 million barrels of conventional gas condensate is already available for the deposit. According to the estimates, this results in an oil equivalent of around 1.6 billion barrels.However, these are only assumptions that have to be confirmed by successful drilling and therefore have to be assessed at a considerable discount. But even if only a fraction of the presumed resource can be confirmed there, that would still be fabulous for the company and the share price.
A comprehensive environmental impact assessment has already been submitted. The responsible government agency has approved the seismic and drilling plan. The license is currently in the second exploration period, which runs through August 2023.In the run-up to a drilling campaign, work is currently underway on the seismic data, which should serve to better understand the future drilling targets. The first drilling should begin this year.
This is complemented by a very strong management team with leadership qualities and sufficient experience in exploration in Africa. Around 33.8% of the outstanding shares are already in firm institutional hands.Zimbabwean authorities are currently well-disposed towards InvictusTraditionally, under Robert Mugabe, who ruled from 1987 to 2017, Zimbabwe was a hopeless country from an economic and political point of view, where arbitrariness and hyperinflation found their home.Since then, the incumbent government under President Emmerson Mnangagwa has tried to present itself as business-friendly and has promoted foreign investment projects.
The minister responsible for mining is himself a former executive from the resource sector.Zimbabwe urgently needs resources because the population is still dependent on charcoal for energy because electricity is prohibitively expensive.Production agreement just a formalityIn late March, Invictus and Zimbabwe signed the Petroleum Exploration Development and Production Agreement (PEDPA), approved by the Zimbabwean government, at a ceremony.President Mnangagwa emphasized:The signing of the (PEDPA) agreement represents a major step in our efforts to develop our oil and gas reserves, which is uncharted territory for the country's mining sector.The final Production Sharing Agreement (PSA) would then be a formality. Because the PEDPA gives the licensee the right to acquire a 25-year production license following the exploration periods. And with that in mind, the company is currently in its second exploration period.In a simplified way, the shares in the profit between the host country Zimbabwe and the manufacturing company Invictus are divided according to a pre-determined key of probably 80/20 in favor of Invictus.With favourable final terms and conditions .
However, it is not yet entirely certain under which final conditions this PPE will fail. In principle, however, the agreements that have already been made are to be viewed as very positive, as they secure the support of the state. In addition, Zimbabwe has decided on its part to set up a special economic zone for Cabora, so that very low tax rates of 15% would apply here, should the oil search be successful.In any case, one thing is clear: the Zimbabwe energy network urgently needs new oil and gas sources for its further development, like all African countries. Development negotiations broken offInvictus announced today in a mandatory stock exchange announcement that negotiations on a farm-in agreement for the Cabora Bassa project, which had been ongoing since December, have ended.
The official reason for this: Invictus could not successfully complete the investigation of the unnamed potential partner and was therefore forced to dissolve the non-binding agreement on its part.Even if the share price is quoted a little weaker today, of course this does not mean the end of the development. Invictus has sufficient capital to set up an exploration camp, to collect and evaluate the seismic data. In addition, you would have another 12 months to find financially strong partners.Nevertheless, the developments show where the project and the course imagination are limited.
My assessment: if you can dare, you don't have toWith a market capitalization of just AU $ 96 million, Invictus Energy is valued more than ten times cheaper than ReconAfrica. With around nine million Australian dollars in the war chest, at least the upcoming seismic work should be financed before the next capital increase is due.
The next step is to procure our own drilling rig and to start costly drilling, which will require further double-digit million investments.The stage of development is now comparable to that of ReconAfrica last autumn. If another huge oil basin is actually encountered here and management is careful with the share structure, there is definitely a realistic chance for strong price increases.
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