Invictus Energy just secured an agreement which increases its SG 4571 licence area in Zimbabwe from a little over 100,000 hectares to 709,300 hectares.
Under the binding Heads of Agreement with the Sovereign Wealth Fund of Zimbabwe (SWFZ), the licence and application area will be amalgamated with the SWFZ’s MSC003 Cabora Bassa South Reserved Area to cover the entire Cabora Bassa Basin.
This grants the SWFZ a 10% back-in-right exercisable within six months of a positive final investment decision.
As part of this, Invictus Energy (ASX:IVZ) has increased its minimum work obligation for the current second exploration period to drill two exploration wells, which neatly ties in with its plan to drill the Muzarabani-1 prospect and one exploration well in the expanded area from late June 2022.
The company’s 80% subsidiary Geo Associates will also move to conclude the production sharing agreement that will encompass the legal and fiscal provisions to govern the project and the development of any discovered resource.
This follows the signing of the Petroleum Exploration Development and Production Agreement (PEDPA) last week and will establish a predictable, stable and transparent legal and fiscal regime that follows international best industry practice which provides Zimbabwe with a fair share of any developed resources.
“We are extremely pleased to have executed the binding Heads of Agreement with the Sovereign Wealth Fund of Zimbabwe. This follows extensive negotiation and collaboration with the various ministries and government bodies over the last seven months,” managing director Scot Macmillan said.
““We are grateful for the constructive efforts by the Zimbabwe Government to put the PEDPA and HOA in place and work towards finalisation of the PPSA.
“This will provide a robust framework to facilitate long-term investment in the oil and gas sector with confidence and ensures the country derives its fair share of any discovered resources.”
Macmillan added that the expansion of SG 4571 to cover the entire Cabora Bassa Basin provides the company with the potential to make further discoveries on a large scale.
The Muzarabani prospect is currently assessed as having the potential to host 8.2 trillion cubic feet of gas and 247 million barrels of condensate.
This will be tested by Muzarabani-1 well that will be drilled by the high-powered Exalo #202 rig owned by Exalo Drilling SA.