Invictus strikes oil, gas drilling deal
INVICTUS Energy, the Australian company searching for oil and gas in Zimbabwe’s Muzarabani area, has struck a two-well oil and gas drilling or farm in agreement with Cluff Energy Africa, keeping its 2022 exploration drilling programme well on course.
Typically, a farm is an agreement where a contractor agrees to pay all or part of a drilling exercise, completion or other expenses of an exploration programme or oil and gas development well. This is done to share the risk of the project.
The Muzarabani project represents significant potential and bright prospects for Zimbabwe to turnaround and transform its economy in the event of a commercial discovery; with possible benefits including significant growth in export earnings, US dollar inflows to fiscus, job creation and development of petroleum value chains.
Cluff Energy Africa, which Invictus Energy says is a close cultural fit, has previously had successful mineral discoveries in Zimbabwe, including when it conducted drilling works for Freda Rebecca, one of the country’s biggest extractors of the precious metal.
The Australia Stock Exchange (ASX) listed exploration junior said Cluff Africa will fund 33,33 percent of the drilling costs for 25 percent interest in the Cahora Bassa Basin (Muzarabani) project.
Invictus intends to commence the drilling programme on its Muzarabani-1 prospect in the first half of next year. The oil and gas exploration company will remain the operator of the project.
The company has already completed a seismic survey, which was carried out by Canadian firm, Polaris Natural Resources. Early results from the processing of the seismic data for Muzarabani and historical data set gathered by the French oil giant, Mobil, in the early 1990’s have reportedly been very encouraging.
Other milestones include the signing of the Petroleum Exploration Development and Production Agreement (PEDPA) with the Government of Zimbabwe. The PEDPA provides the licence holder of the Muzarabani prospect the right to enter into a 25-year production licence following exploration periods.
Further, it provides the framework for progression of the project through the exploration, appraisal, development and production phases, the obligations and rights of each party, minimum work programme obligations to maintain the licence in good standing, and the security of tenure for the project duration.
President Mnangagwa, guest of honour at the signing of the PEDPA, said the agreement represented major strides in Zimbabwe’s efforts to tap into its oil and gas deposits, which is a new territory in the country’s mining sector.
He added that potential benefits of a successful oil and gas discovery included electricity generation, production of liquid petroleum, liquefied petroleum gas (LPG), fertiliser production and petrochemicals.
The Muzarabani prospect is considered to be the largest undrilled conventional oil and gas prospect onshore Africa and could host prospective resources of about 9,25 trillion cubic feet of gas and 294 million barrels of condensate.
“Invictus is pleased to enter into the option agreement with Cluff Energy Africa (CEA) and work towards formalising our relationship in the Cabora Bassa joint venture over the coming months.
“CEA is a like-minded partner and a close cultural fit, and their team has an outstanding track record of making and monetising discoveries in Africa.
“We look forward to CEA completing their capital raise activities and participating in the exciting basin opening 2 well drilling campaign including drilling the world class Muzarabani-1 well in the first half of next year.
“Invictus is incredibly well placed to achieve significant accretive milestones during 2022 with a number of key catalysts ahead of us,” said Invictus Energy managing director Scott MacMillan.
Cluff Energy Africa is currently assembling a portfolio of African oil and gas exploration assets with the intent of raising further capital during early 2022 to fund their exploration programmes.
The Cluff group has previously raised and invested over half a billion dollars for natural resources projects. Under the terms of the non-binding agreement, Cluff Energy Africa must exercise the option by 31 March 2022 to enter into a binding farm-in and joint operating agreement.
Further, the drilling company must obtain the necessary funding to meet the farm-in commitment for the two planned oil and gas wells in Muzarabani.
Invictus and Cluff Energy Africa will also investigate the options for mitigating carbon emissions from the project including carbon capture and storage (CCS) or similar solutions to align with Zimbabwe’s strategic objectives.
Said Cluff Energy Africa chairman and chief executive, Algy Cluff OBE “Cluff Energy Africa is delighted to be joining Invictus in the Cahora Bassa project and we view this asset as a rare high-quality but low-cost opportunity that has world class scale.
“We believe it will form a key pillar in the portfolio of assets that we are currently assembling. I am also excited to be bringing the Cluff group back to Zimbabwe having enjoyed previous success in the resources sector in the country with the discovery and development of the largest gold mine in the country at Freda Rebecca.
“We look forward to working closely with Invictus over the coming months to finalise our partnership agreements and move forward with the exploration programme.”
Cluff Energy Africa is an Africa-focused oil and gas exploration company headquartered in London. The company is currently building a portfolio of exploration assets in subSaharan Africa. The Cluff Energy Africa chairman and CEO is a pioneer in the natural resource sector, having successfully acquired, explored, financed, operated, and sold assets in eight different countries in Africa.
He was the founder of Cluff Oil, which was an early entrant into the UK North Sea and led the consortium that discovered the Buchan Oil Field. Cluff Energy Africa followed this with oil discoveries in Australia, Canada, and the United States.
He then founded Cluff Resources plc, which focussed on mineral exploration in Africa.
Cluff Natural Resources returned to offshore oil and gas activity in the UK North Sea in 2009 entering a number of licenses and negotiating a joint venture with Royal Dutch Shell in April 2019.
Cluff’s previous experience in Zimbabwe commenced immediately after the country’s independence from Britain in 1980; Cluff being the first foreign investor at that point.
Over the following sixteen years, Cluff discovered and brought on production three gold deposits including the Freda Rebecca Mine at Bindura, the largest mine measured both by ounces produced and tonnage throughput in the country.
Cluff listed the company’s local subsidiary on the Zimbabwe Stock Exchange vesting 10 percent of the equity in a workers’ trust and appointed the first African chief executive of a mining company, Zimbabwean, Godfrey Gomwe.
Cluff exited Zimbabwe in 1996 after being acquired by Ashanti Goldfields.-eBusiness Weekly
