Ann: Results of AGM, page-2

Morning All,

Adding my notes from what I remember from the AGM in BOLDbelow.
I am very glad I made the effort to attend and meet other Shareholders. I was never overly worried about my investment, but yesterdays information gave me some more confidence in the story.

Scott mentioned that he receives endless emails and texts, and that once they are missed he rarely gets time to go back through and reply. No official silence period was my take.

1. We have had no on ground work since M2 finished and the SP has dropped by 2/3 over the year. Shareholders have had no information as to why this is. Is the PPSA the reason? Is there a standoff over this?
   
   My take on this one is Scott/Invictus are definitely done with going to market to raise capital, And this made them focus hard on a farm in partner, he definitely said this is early than they wanted to but guess that’s the way the cookie crumbles. PPSA was not the sole reason, but obviously hard to do ground work with out capital to back it up.
   
   All information is being held/analysed in house until farm in partner is announced is my understanding. Well information has to be calibrated against a flow test so no need to release any information to market.
2. Are you still planning to deepen M2? All recent announcements recently mention testing. Have long leads and contracts been finalised?
   
   Yes, still planning on a deepening of M2 – he said 13 different well designs/tests are on the table, will be just selecting best one when its time.
   Long leads and service contracts are sorted. Have a much stronger negotiating power now that Service companies are setting up in Namibia. And the Cabora Basa basin is looking like 20 plus yrs of work.
3. Is a farm out or finance partner dependent on PPSA? Does it need to be executed first?
   
   Pretty much yes. There will be back costs and he’s very determined that we never go to market. Enough info that well testing isn’t a deal breaker for a partner & not hindering negotiating a fair deal.
4. Why wasn’t 3D seismic done during the year? We could have been well into processing by now.
   Incvictus is ready to start 3D Seismic over Mukuyu, but as OTP mentioned Polaris is on a Recon Job that has gone overtime.
   Scott did make it sound like 3D would happen when the equipment is back, unless when a Farm in is announced and the partner wants to start drilling straight away.
5. Why weren’t the recent director options aligned in price with the Mutapa options?
   
   Were at 50% premium over current SP at the time and have to be paid for to exercise. Said their current board aren’t in it for the quick money but deserve some incentive. SM and Chip Dog have never sold a share.
   He quoted “ John Bentley is not here for the money, could get that easily anywhere, John Mutizwa whole salary goes straight Mangwana Capital, he doesn’t even see it”
   He understands the look but its just the standard way of pricing the options.
   
   
6. When the $15m was raised a year ago and again in the Mutapa investment, one of the uses of the money was for testing. Is the money still there to do this?
   
   Yes but any unexpected delays in farm in would leave us needing to potentially self fund again. Farm in sounds very close and waiting for PPSA finalised. Mutapa Tranche 2 money will be cleared in the next week or so.
7. With the news today, is the PPSA terms and conditions complete or were there recommendations /amendments by the outside legal which need to be included in the document? Does being ‘finalised for execution’ mean the wording and all clauses are agreed? Is it with Mutapa now to finish? Does it need to go to parliament? Will there be a signing ceremony or similar?
   
   There has been small amendments along the way but Scott said it is a very good deal in line with other country’s. He said the Review by the Lawyers was because Mutapa has taken over and this eliminates all chances of corruption/risk/drama for all parties. This will be the base for all deals in Zimbabwe and needs to be perfect. The country will be open for business with this in place. Invictus did not suggest the review happen, has no part in it, doesn’t pay anything. This is not delayed by Government. I forgot the name of the organisation that made the review happen, but it is a good thing. It took extra time as Lawyers like to always justify there job. Scott said his wife is a lawyer so has a full understanding of the process.
   
   
   

Other things off the top of my head that were spoken about:

1. Carbon offset project still a goer. Govt had changed the plans but there will be news soon. Was mentioned in their board meeting yesterday. Also stated that any funding will always want some sort off offset program.
2. Forest was probably the only disappointing target. All other targets have good prospects.
3. Condensate market is growing 25% a year. Potential extra revenue stream.
4. Invictus has no desire to become a Electricity company. They will be getting the gas to the well head and selling it. No plans of building pipelines or anything downstream at this stage.
5. Gas to Power will be main goals, Southern Africa is power starved. There is an endless market for electricity. No need to export gas, electricity will be the export. This makes me think the farm in partner is going to be in the Energy Game. But purely my guess!
6. Pilot Gas Turbine could be up and running in 18 months, Scott said this quite confidently as everything is modular.
7. 1.2TCF needed for a 500MW powerplant – 20 year life. – Doesn’t see any problems with this at all.
8. The shareholder sitting at the back of the room was firing off a lot of very technical questions, and he seemed quite excited about answers coming from Scott. And they exchanged a lot that went straight over my head. It’s a shame I didn’t capture more details of it all.
9. PPSA will be getting a ceremonial signing. I would like to hope its this year, but I honestly have no idea if that’s even possible this late into the calendar year.
10. Scott said future work can be done on all weather Pads, no need to stop for wet season in the future. First two pads were dry only as its cheaper and the risk was always there that they could have found nothing.
11. 3D seismic would be similar timeframe to last 2D campaign. Over Mukuyu only

Again thanks to the few Shareholders that showed up. I’m glad the room wasn’t full now I think of it, as I got to absorb so much more.

I got to shake the Big Fella Scott’s hand and he is a really professional guy. I hope to one day shake it again after some proper wins !! He is in this for the long haul.

Please remember this is my opinion, make your own decisions.