One of the More Promising Oil and Gas Exploration Plays in Africa: IVCTF (Invictus Energy)

Every so often, a potentially undervalued play comes along, due to its potential (and likelihood thereof). We think Invictus Energy could be one of those plays. IVCTF (OTCMKTS) is an independent, Australian oil and gas exploration company with rights to a 360 thousand hectare region encompassing part of northern Zimbabwe. To preface, this is a wild-cat play, which typically carries a high level of risk due to potential infrastructural, geological, and political challenges. This said, Invictus’s prospects on these three fronts appear they could be relatively positive thus far. Their principal asset is within the Cabora Bassa basin, a large frontier rift basin in northern Zimbabwe (80% interest). The “Mukuyu-1” well, the first drill test site is planned to commence in August 2022.  Original analysis (based on seismic data, aeromagnetic data, etc.) estimated 8.2 Tcf of natural gas + 247 million barrels of conventional gas condensate. Already, this was a large target (particularly relative to the size of the company). This estimate was updated by ERCE (an independent third-party agency specializing in petroleum reservoir evaluation) to 20 Tcf + 845 million barrels of conventional gas condensate on July 5th (“gross mean recoverable conventional potential [unrisked basis]”), representing a 2.7x increase, a clear indication of the potential.  

“The Mukuyu prospect has grown significantly in its scale and now represents one of the largest conventional exploration targets globally” 

-Scott Macmillan (managing director)    Indeed, these estimates are “elephant-sized” (conventional field with recoverable reserves of 1 billion barrels of oil equivalent or more) if they hold true (with further testing).   At a market cap of 150 million dollars, positive results derived from the drilling program may drive notable upwards movement in share price from current levels.    


Invictus Energy discovered the prospect based on data collected by an onshore Mobil exploration project in the country in the 1990s. This data was collected via 2D seismic and gravity surveys, revealing the potential for oil and gas (an emphasis on the latter). As evident by Invictus’s current operation, Mobil relinquished the land, due to infrastructural and geopolitical concerns.  Since then, re-processing of old data, and a relative plethora of new testing, including hundreds of kilometers of seismic (by Polaris) has been accomplished.  There likely are significant stores of hydrocarbons, the main question is how much (is recoverable). An anecdotal comment was made indicating the potential for hydrocarbons (Chief Muzurabani): 

“When we dug wells for water for our own consumption…experts came here and (they) concluded that the water was not fit for drinking because it had oil.” 


Governmental and Economic Concerns 

The political and economic history of Zimbabwe isn’t exactly ideal for investment, to say the least. Being the poster child for modern-day hyperinflation, with a corrupt government led by Robert Mugabe for nearly 40 years (until 2017), investors may be rightfully weary of investing in anything associated with Zimbabwe, let alone if the company’s principal asset is located within.   An example of this perceived corruption: 

Corruption is a very high risk for companies operating in Zimbabwe’s natural resource sector. Senior officials who manage natural resources are frequently involved in corruption, and revenues from the industry are often not reported (U4, Jan. 2015). The mining sector is especially affected by high-level corruption and patronage (BTI 2016). 

Corruption and a lack of oversight allowed for an illicit diamond trade, which public officials in the Ministry of Mines are allegedly fully aware of (U4, Jan. 2015). According to President Mugabe, the illicit trade has cost the economy USD 13 billion, leading him to create a new state monopoly in 2016 and ordering all diamond-mining companies to end operations and vacate their premises in the Marange and Chimanimani areas (Bloomberg, Mar. 2016).” 

I cannot affirm the veracity of these claims or the source, or whether these claims would have the probability of impacting the operations of Invictus Energy. However, it may serve as a reason for a discounted share price in the intermediate term prior to cash flow from oil and gas operations (via farm out’s or production). Importantly, these references are dated from before the new president entered office (2017).    

“Zimbabwe is open for business” 

-Mnangagwa (Current President)   Overall, the macro-economic uncertainties and potential for corruption introduce an added risk. However, it appears the new administration is taking significant steps to create a healthy environment for foreign investment, and thus far the process between Invictus and local government appears to be running smoothly. New Special Economic zone legislations include a guarantee of investors’ rights and a 5-year tax holiday with a 15% corporate tax rate thereafter. The framework for a beneficial environment for foreign-based O&G developers is being made. If the government can remain consistent, there should be little reason for interference.  

“Overlooked jurisdiction for last 20 years due to political and economic instability. New Government is pro-business, promoting foreign investment and has implemented investor-friendly reforms.” 

“Amended Indigenization and empowerment act  

-100% foreign ownership of assets  

-Guarantee of investor rights  

-100% remittance of earnings  

Special Economic Zones legislation enacted  

-5-year tax holiday  

-15% corporate tax rate thereafter  

-Zero CGT -Customs duty exemption on raw materials and capital equipment  

-offshore banking and transacting outside local financial system safeguards against local currency effects.”

  -Invictus Energy      Invictus has confirmed it had received three competing farm-in offers. This may indicate that political issues are not perceived as excessively high by other players in the hydrocarbon industry. 


-Invictus Energy


With rising natural gas prices and reduced CAPEX globally, demand is sufficiently high both globally and locally (southern Africa).    

Price Target 

Upon the completion of the initial drill campaign and release of data, coupled with news regarding new (lucrative) farm in offers, the share price may rise many multiples. If it is not successful however, the contrary could be seen.     Invictus Energy is a pioneer in the onshore exploration of hydrocarbons in southern Africa. plans to diligently follow IVCTF, commenting on and analyzing new developments.