Invictus is already looking at a potential May spud for its maiden gas exploration well at the Cabora Bassa project in Zimbabwe after reaching a tentative deal to secure a rig.
Under the memorandum of understanding (MOU) with Exalo Drilling SA, the company has selected the Exalo #202 Rig to drill the Muzarabani-1 exploration well with an option for an additional exploration well for the basin opening campaign.
This high-impact drill program will be of particular interest to both Invictus Energy (ASX:IVZ) and Zimbabwe itself.
8.2 trillion cubic feet of gas: Mobil
While the Cabora Bassa Basin has never been tested by drilling, an extensive dataset acquired by Mobil in the early 1990s – including seismic, gravity, aeromagnetic and geochemical data – had defined the giant Mzarabani conventional gas-condensate stacked target that could host 8.2 trillion cubic feet of gas and 247 million barrels of condensate.
The company is also processing and interpreting data from its recently acquired CB21 2D seismic survey to refine the Muzarabani-1 well location and design along with maturing additional prospects to enable a two-well back-to-back drilling program.
Preliminary work has already indicated this survey has returned high-quality data, with contractor EarthSignal noting strong amplitude anomalies which indicate hydrocarbons present in shallow sections of the target Muzarabani structure and basin margin fault.
Exalo personnel recently completed a visit to Zimbabwe to review potential drilling locations and logistics options and a binding rig contract is expected to be signed in the new year.
“Securing the Exalo #202 Rig is another clear point of progression towards our maiden drilling campaign commencing in May 2022. We will now proceed to secure the remaining long lead items and services required to commence drilling operations,” managing director Scott Macmillan said.
“We will benefit immensely from inheriting an active drilling rig and crew and a modest mobilisation from Tanzania to the project area. The company plans to announce the final drilling location(s) and further details of the exploration program in the new year.”
CEA farm-in opens doors to other funding options
The modern IRI 1200 class #202 rig is currently engaged in Tanzania, after which it will be mobilised to Cabora Bassa.
Invictus is required to exercise the option on the additional well by mid-February.
Costs for drilling both wells may well be funded in part by Cluff Energy Africa (CEA) under a farm-in option agreement that could see CEA paying a full third of the costs for a 25% interest in the project.
CEA is a high-quality farm-in partner – and allows the company to set a baseline bid for other farm-in options as further seismic data is released and analysed to reveal the full value of the portfolio.
IVZ says there’s potential for comparatively lower interests to be granted to other parties, which would result in the company maintaining its larger ongoing interest in the project or lower funding requirements.
The company would fund all costs associated with exploration and operation by a combination of equity and/or debt, with the aim of maintaining its 80% ownership and operatorship in the Cabora Bassa project.
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.