Just sharing notes from yesterday's conversation with Scott....

Just sharing notes from yesterday's conversation with Scott. This is a follow-up post from the fantastic notes that @WatfordLad posted

As Watford stated it was an absolute pleasure to talk to Scott, he devotes a lot of time and generosity towards those who reach out to him. Scott unfortunately had to scoot off towards the end of the call as he had a meeting so some of the final questions were rushed and Scott was unable to go to great depths.

PLEASE NOTE that the following comments are MY interpretation of our conversation.

Scott seemed very relaxed and upbeat about everything. He is extremely elated by what he is seeing and there is still a lot more data to come in. With each day a greater understanding of the basin develops. My overall assessment is that IVZ is establishing their footing for the long term and building all the required resources (team, tools, ops hub, offtake partners etc).

After the usual chit-chat at the start, we started to dive in.


HOTCOPPER
- Scott does not go into the 'Cesspit' as there is a lot of noise and it is unproductive though he does get snippets of what goes on from individuals who email him collated comments
- He finds that a lot of these comments are misconstrued as they are short of all the information
- He is starting to recognise that for a lot of IVZ's shareholders, this is their first investment in Oil and Gas so there is a large knowledge gap on what results mean, how the industry works etc


RELEASED INFORMATION
- It is important to understand that currently, IVZ has a LIMITED sample set against what the entire basin may portray, therefore they have released what they know they can take to the 'bank'
- With the grey areas, IVZ has to do the work and acquire data to understand where this grey information sits. Either it will be put in another category or it will be matured.
- IVZ has been extremely conservative towards their inputs, with expectations of maturing information rather than going backwards


FLUID SAMPLES
- Results from the lab are expected BEFORE the Rights Issue closes
- Fluid chambers are still en route and expected to be in Huston by the end of the week and then the analysis shouldn't take that long
- Couldn't open a chamber at the well site because even though IVZ requested SLB to have the equipment, the facilities hadn't been tested above 5,000 PSI. So SLB wasn't happy to do it


SOURCE ROCK
- The source rock story is complicated as there are varying intervals from algal (oil) to humic (drier gas) material each at varying depths that both sit laterally and vertically
- These source rocks are coming into maturity, generating hydrocarbons, expelling them and then migrating into the structure at various times with various liquid and gas ratios.
- It's a very complicated story to unpack but it is a good problem to have because they have so much source rock, generating hydrocarbons EVERYWHERE.
- They are seeing hydrocarbons in the mud gas from beneath the top seal of the Dande right through to where they have drilled so far


NET PAY
- Believes there is investor confusion between the net pay vs. the net-to-gross.
- Net pay is made up of a range of components including net-to-gross, porosity, saturation etc
- Net to gross describes the volume of shale cut off within the sands.
- At the moment, IVZ is using arbitrary statutory cut-offs for their net pay. They don't know what the most appropriate cut-offs for this basin are yet. Future lab data (core samples) will support the calibration of the logs.
- When companies like Noble Helium announce 240m of net reservoir, this doesn't include any saturation component whatsoever. If IVZ were to report the same thing, they would announce HUNDREDS of meters of net reservoir
- Scott doesn't want to inflate information that will be hard to justify to an independent without hard data. This has always been his approach and wants to ensure that people can rely on what they announce


MONETISATION POST-FLOW TEST
- Firstly, IVZ has to assess the actual flow rates of MK-2 to then put in an appropriate commercial or at least pilot-scale solution
- They can implement various solutions depending on the flow rates whether it be small-scale on-site gas to power or compressed natural gas.
- Over the past few weeks IVZ has been assessing these options due to the SIGNIFICANT (chuckled) amount of interest from parties offering different solutions
- They need to capture the data first but they have a screening solution occuring that will guide the timeline towards monetisation.
- IVZ also has off-takers that will match whatever development IVZ chooses


ALTERNATIVE FUNDING & PPSA
- For alternative funding to become available, there are a few hurdles that need to be crossed
- The PPSA is the most PROMINENT as the parties want to know what the long-term fiscal picture looks like.
- There is a lot of momentum now behind the PPSA post-discovery. IVZ's deputy chairman went to see the President to give him the discovery news the night before the announcement
- Aiming to get this done as soon as possible and IVZ is putting pressure on the government


ALGERIA
- There is not a lot of knowledge within the Zimbabwe government towards developing an oil and gas industry so they have called in regional countries who have experience and can see the value proposition of the basin
- Algeria who exports their gas to Europe is a great partnership as Zimbabwe can see itself as a regional energy supplier and so will want to understand how exporting gas/energy to the surrounding area works
- It is too early to say the impacts of the partnership between Zimbabwe and Algeria.
- Algeria’s national oil company is involved in upstream, midstream and gas-to-power sectors
- IVZ is focused exclusively on the upstream markets


3D
- They have been doing the design and prep work and it will be very quick to pull the trigger
- All of Polaris’ equipment is in the country at IVZ’s supply base
- They shot a test line with different parameters than when they did the survey last year. This supports the frequency calibration so that they can effectively hit the UA and LA levels
- Polaris are currently undertaking a commercial exercise to determine how to shoot the seismic, the number of vibroseis trucks used, in what pairing and over how many days etc
- 3D will be shot before the 6-inch and flow test
- IVZ wants to be in a position where the 3D survey has been acquired, is being interpreted and is ready to go for another drilling campaign next year at Mukuyu. The earlier they shoot it the better


FLOW TEST
- IVZ still has to put out a tender as well as complete the design for the deepening and flow test. They are assessing several different scenarios and how they test it
- Scott never stated early Q2. Will have to wait and see once the design is completed with what the lead times are and what’s available in the region


NEXT WELL
- Due to the requirement for a well needing to be drilled outside the main license area by mid-2025, IVZ is looking at one of the string of pearls leads or the options out east
- The seismic interpretation work is very advanced now. There is one lead in the east that is really firming as the favourite. This was from a conversation late last year with the geophysicist and Scott has not spoken to him since.


UPDATES TO NET PAY
- Unable to provide an exact timeframe as to when net pay figures will be updated however IVZ needs some preliminary core data back. IVZ has a much more extensive core acquisition data set now which they can use. The fluids data will also help to calibrate the logs
- I asked if an update could be in the 2H of 2024, not sure yet. Depends on when the core samples arrive at the labs. IVZ will then get some timelines of how busy they are and when they can expect results back
- They will then analyse all the data at hand