INVICTUS Energy, the Australian firm searching for oil and gas in Zimbabwe, intends to raise $5,5 million (A$) to finance further development of the Muzarabani project through issuance of at least 55 000 new shares.
This comes as Invictus has registered significant milestones in the exploration for and development of the Muzarabani oil and gas project, including completion of a seismic (subsurface data gathering) study and conclusion of drilling agreement with a British company.
The company, which expects that its recently concluded 2D seismic data will help refine the location and path of the planned Mzarabani-1 gas exploration that will test the potential of the Cabora Bassa project (Muzarabani), has also secured drilling for the project.
Official data shows that the Muzarabani prospect has been independently assessed to host prospective resources of about 9,25 trillion cubic feet of gas and 294 million barrels of condensate, essentially a light oil.
Additionally, Invictus has signed a petroleum exploration development and production agreement (PEDPA) with the Government, which spells out rights and obligations of each party through the development phase of the project.
The Australia Stock Exchange (ASX) listed company said it had received firm commitments from sophisticated and institutional investors to raise A$3,5 million (before costs) by way of placement of new shares and US$2 million through a share purchase plan.
Invictus managing director Scott MacMillan said: “The placement & SPP follows on from recent announcements securing the Exalo #202 Rig and a farm in option agreement with Cluff Energy Africa Limited,” which were signed recently.
Mr MacMillan said the Australia listed junior exploration company was pleased to offer its long-term and loyal shareholders the right to participate in a SPP alongside the placement participants.
“As announced on December 9, 2021, we are positioning Invictus to undertake a 2-well exploration campaign commencing (first half of 2022) including the drilling of Muzarabani-1 well targeting prospective resources of 8,2 Tcf + 247 million barrels conventional gas condensate1.
“We have a busy (first) half of 2022 planned with finalisation of our data processing for our seismic survey, update of our prospect and lead inventory, conclusion of our farm-out process and securing long lead items as we embark on our planned 2-well drilling campaign of our world class asset including the Muzarabani-1 well which will be one of the largest conventional targets drilled globally in 2022,” Mr MacMillan said.
Essentially, the funding enables Invictus to finance critical programmes ahead of planned exploration drilling of two oil and gas wells in Muzarabani, which the company has said is scheduled for the first half of next year.
Under the planned placement, Invictus Enegy will issue 35 000 000 new fully paid ordinary shares (New Shares) at an issue price of A$0,10 per new share, a 13 percent discount to the last closing price on December 22, 2021.
Proceeds from the placement will be used to fund the rig mobilisation fee, purchase of long lead items for the planned second-well drilling programme and finalisation of the data processing of its Muzarabani seismic survey.
A share placing (placement) is when new equity shares are issued to individual investors, corporate entities, or small groups of investors for capital. This increases the amount of shares in issue and dilutes existing shareholders.
In concert with the placement, Invictus said it would offer all eligible shareholders a share purchase plan (SPP) to raise up to A$2 million, resulting in a maximum of 20 000 000 shares being issued under the SPP.
All eligible shareholders will have the opportunity to apply for up to A$30 000 worth of New Shares.
A share purchase plan (SPP) is a form of capital raising by a listed company that offers shareholders the opportunity to apply for new additional shares. Regulations limit the maximum application per shareholder to A$30 000.
Typically, an SPP is conducted at a discounted price to the current listed price of the stock to encourage shareholders to purchase more shares.
“The issue price under the SPP of A$0,10 is equal to that of the new shares issued under the Placement, with SPP participants also receiving attaching options on a 1-for-2 basis, at a strike price of A$0,14, with a 3-year term,” Invictus said.
In the event of over-subscriptions, the company said its directors may also, in their absolute discretion, decide to increase share purchase plan acceptances by a further $1 million.
The offer is open to all eligible shareholders (including custodians), being registered holders of shares as at 7 pm (AEDT) on December 24, 2021 (Record Date) with a registered address in Australia and New Zealand, and not resident or located in the US or other jurisdiction in or into which an offer of new shares would be unlawful, who meet certain conditions as expressly prescribed in the terms and conditions.
Proceeds from the SPP will be allocated to further purchases of long lead items for the planned 2-well drilling campaign and for general working capital.