Invictus Energy lists on VFEX after US$10m Zim capital raise

Invictus Energy, which discovered two condensate gas deposits in the Cabora Bassa Basin north of Zimbabwe, late last year, is set to list on the Victoria Falls Stock Exchange today after completing a US$10 million capital raise from institutional local investors.

The oil and gas exploration junior, which has its primary listing on the Australian Stock Exchange (ASX), said the funds raised would be used to progress the development of its project in Zimbabwe and for working capital.

The private placement, managed by local investment advisory firm, Mangwana Capital, is US$5 million underwritten by the Mutapa Investment Fund, Zimbabwe’s sovereign wealth fund and 10 percent shareholder in Invictus.

The strategic investment is historic for both Invictus and investors in Zimbabwe, who will now have the ability to hold and trade securities in the company through a dual listing on the VFEX.

Invictus said the investment also firmed up the pathway to finalise the Petroleum Production Sharing Agreement (PPSA). The Government, through Mutapa, will be entitled to 40 percent of the product extracted.

The oil and gas project is expected to guarantee Zimbabwe’s energy security, drive accelerated economic growth, increase Government fiscal revenue and create new jobs and downstream industries.

“Invictus Energy Limited is pleased to announce that a US$10 million Institutional Placement launched on July 29 2024 and managed by Mangwana Capital (Private) Limited is now fully subscribed,” the company said in a statement.

That Mutapa has underwritten US$5 million of the placement, Invictus said, demonstrated long-term support for the Cabora Bassa Project on behalf of the Government of Zimbabwe, as well as a number of other strategic investors committing to the placement.

“Funding through the placement will assist Invictus progress its near-term exploration and corporate strategies as the company transitions from explorer to developer,” Invictus said.

Invictus offered to place US$10 million through the issuance of 151 515 152 shares at a share price of AU$0,10 at an AUD/USD exchange rate of US$0,66.

Under the placement, participants will receive an option to subscribe for one share for every four shares subscribed for, exercisable at AUD$0,30 with a two year option period.

“Securities issued will facilitate a secondary listing on the VFEX through issuance of Zimbabwe Depository Receipts (ZDRs) to support local liquidity and trading. The official listing is scheduled to occur on Friday, August 2, 2024,” Invictus said.

The placement will be carried out in two tranches. Tranche one will comprise the issue of approximately 98,5 million new shares to raise US$6,5 million, with US$1,5 million placed immediately to be followed by a further US$5 million (as part of Mutapa’s underwriting), expected to be finalised in the week commencing August 12 2024.

Tranche Two will comprise an additional approximately 53 million New Shares to raise US$3,5 million on the same terms as Tranche One and subject to shareholder approval to be sought at an extraordinary general meeting in September.

Funds raised from the placement will be used to advance the Cabora Bassa Project, including its Mukuyu-2 well flow testing, appraisal drilling and well test design studies, reservoir engineering studies and early-stage development concepts.

Invictus also said the money will go towards progressing early gas-to-power monetisation opportunities for Mukuyu-2, conducting 3D seismic survey over the Mukuyu Gas Field, purchase of long leads for shallow exploration wells targeting the Eastern Margin and Basin Margin plays as well as general working capital.

Invictus Energy managing director, Scott Macmillan, said the strategic capital raise and the support received from institutional investors, particularly the Mutapa Investment Fund, was a testament to the quality of the Cabora Bassa project.

“These funds will be used to progress our dual strategy of early monetisation as well as further development as we look to expand our resource base through further discovery and transition into a development phase.”

“This placement and associated dual listing of Invictus on the VFEX will also enable greater and ongoing domestic investment in the company and our project,” he said

Earlier this week, Invictus said the participation of the Mutapa Investment Fund added further strategic value as the Government of Zimbabwe’s nominated participant in future development of the Cabora Bassa Project through the Petroleum Production Sharing Agreement.

Mutapa will be assigned as the beneficiary of the product/profit share and equity holder on behalf of the Republic of Zimbabwe. Mutapa Investment Fund’s participation in this equity raise signifies the Government of Zimbabwe’s commitment and alignment to the Cabora Bassa Project.

Invictus said this was further reinforced by the commitment to finalise and implement the PPSA, which provides a stable and transparent legal and fiscal framework to govern the project.

The PPSA is designed to ensure fair and equitable sharing of the project’s revenue between the Government, Invictus and its partners, fostering a mutually beneficial partnership that supports the project’s long-term success. Mutapa Investment Fund chief executive officer Dr John Mangudya said the Government of Zimbabwe’s commitment, through its support for Invictus and the

negotiations of PPSA provided a solid foundation for a transparent and stable operating environment, which is crucial for the successful development of the world-class oil/gas asset through future partnership.

“The Mutapa Investment Fund’s participation in the development of the Cabora Bassa Project has the potential to generate substantial returns while delivering sustainable benefits to the nation for generations to come.”

“We are confident that our support for Invictus and the project lays the foundation stone for a vibrant and productive oil and gas sector that will contribute to the creation of jobs, generation of exports, and delivery of energy security to Zimbabwe,” Dr Mangudya said.

Invictus Mukuyu finds were ranked the second largest discovery in Sub-Saharan Africa in an upstream review published by global energy research firm Wood Mackenzie.

Mukuyu’s placing as an estimated 230 million barrels of oil equivalent (1,3 billion cubic feet) resource followed two discoveries at the firm’s Mukuyu-1 and Mukuyu-2 exploration wells.

Wood Mackenzie’s review noted that regional exploration yielded seven discoveries from a total of 17 wells drilled across Sub-Sahara in 2023.-ebusinessweekly