Big demand leads Invictus to double SPP to $4m

Confidence in Invictus and its upcoming Zimbabwe gas drilling is clearly high with the company doubling the size of its share purchase plan to $4m thanks to strong demand.

While the company had increased the size of the SPP from $2m up to $3m last week to account for the strong interest, it has clearly underestimated just how much shareholders want to secure a larger stake ahead of its drilling the highly-anticipated Muzarabani-1 well.

To address this, Invictus Energy (ASX:IVZ) is filing a supplementary prospectus to increase the SPP up to $4m and closing the offer early to avoid having to carry out a material and significant return of funds.

Additionally, the company has changed its scale-back methodology from a first come-first served basis to a pro-rata basis.

“The Invictus team is pleased by strong shareholder support for our Securities Purchase Plan,” managing director Scott Macmillan said.

“We are also delighted to have Mangwana Opportunities Fund increase its stake in Invictus, which provides Zimbabwean institutional investors and pension funds with greater ownership of the company. This will assist us in advancing our strategic goals in the country.

“The overwhelming take up of the SPP has necessitated an increase to $4 million to provide broader access to existing shareholders.”

He added that the number of applications for the SPP have exceeded historical levels by similar ASX-listed companies.

Big gas potential

The Muzarabani-1 well that is expected to spud in May 2022 will test a giant conventional gas-condensate stacked target that could host 8.2 trillion cubic feet (Tcf) of gas and 247 million barrels (MMbbl) of condensate.

This places the field well in giant territory given that Woodside Energy’s (ASX:WPL) giant Scarborough field hosts about 11.1Tcf of dry gas while Santos (ASX:STO) has over 4.5Tcf of gas and nearly 50MMbbl of condensate at its Barossa gas field.

Success will be a game changer for Invictus, which is open for further farm-ins following Cluff Energy Africa’s potential deal to take up to a 25% stake in the project in return for funding a third of the costs for a two-well campaign.

Location and details for the second well will be finalised once interpretation of the recent 2D seismic is completed.

This article was developed in collaboration with Invictus Energy, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.