IVZ Valuation & Takeover, page-20

Scott mentioned in previous interviews that development bank loans may be an option if we go through to production alone. Personally I'd rather have a Tier One take an equity in IVZ and we create a JV as it'll be a lot smoother than procuring everything ourselves.

My take on next steps, assuming a successful discovery is made -

2023/24 -

• complete drilling of Baobab. Mukuyu-2 not needed right now if discovery is made.
• Additional calibration of seismic following Mukuyu-1 and Baobab-1 to determine next 4-5 wells for appraisal. I think Mukuyu-2 and some of the bigger basin margins plays.
• Cap raise of $60 million for 4-5 wells plus ongoing costs. SM has said that Exalo is happy to leave the rig in the area, decreases mobilisation costs, and the hope is major civil works won't be necessary for some future wells. If oppies go through at 40c, then $40 million will be raised for that. If not, then cap raise at circa $1-$1.50 would be much better for dilution.
• Appraisal drilling of 4-5 wells will likely take 12 months to complete, say June 23 to June 24 but in the meantiime IVZ will need to map out if we JV production/take out loans or get completely taken over.
• PPSA will need to be in place before any takeover happens as no one is taking us over until they know what % of the profits they can have.

Pending appraisal and confirmation of resource, calibrated wells will give more accurate estimates maybe with aid of 3D seismic. Then our valuation will be much clearer. If appraisal confirms what we already think we have, 5.5 BBOE, then we're easily talking multi billion dollar takeover.

My thoughts - We push through to production with a strategic partner. SM will be keen to see this through and so many things are already in place for us to expedite production (carbon offsets, MOUs, PPSA progression).