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<\/p>\nInvictus\u2019 owned subsidiary Geo Associates (Pvt) Ltd and the Sovereign Wealth Fund of Zimbabwe (SWFZ) have executed a Heads of Agreement\u00a0 to increase Special Grant 4571 (SG 4571) licence area from 100,000 hectares to 709,300 hectares.<\/p>\n
Under the HoA the SG 4571 licence and application area will be amalgamated with the SWFZ\u2019s MSC003 Cabora Bassa South Reserved
\nArea to cover the entire Cabora Bassa Basin in Zimbabwe as per Appendix 1. The SG 4571 area increase is now awaiting procedural
\ngovernment gazettal.<\/p>\n
The Company will increase the minimum work program obligation for the current second exploration period to drill two exploration wells,
\nincluding the Muzarabani-1 prospect and one exploration well in the expanded area. The rig contact with Exalo Drilling SA, confirmed on 10
\nMarch 2022, accommodates a two well drill program anticipated to commence in late June 2022.<\/p>\n
Geo Associates and the Republic of Zimbabwe will also conclude the Petroleum Production Sharing Agreement which will encompass the
\nlegal and fiscal provisions to govern the project and the development of any discovered resource.<\/p>\n
A map showing the original SG 4571 licence area within the expanded acreage covering the Cabora Bassa Basin is shown below.<\/p>\n
<\/p>\n
Sovereign Wealth Fund of Zimbabwe Partnership The Heads of Agreement executed between Geo Associates and the Sovereign Wealth Fund of Zimbabwe (SWFZ) will amalgamate the respective licence areas into the extended SG 4571 licence area . The SWFZ will be entitled to a ten percent (10%) equity back-in-right to the extended SG 4571 which is exercisable within six months post positive Final Investment Decision to develop any
\ndiscovered resource within the licence. This will provide the SWFZ risk-free participation in the SG 4571 through to the commencement of production.<\/p>\n
Geo Associates and the SWFZ may also collaborate to explore in areas of mutual interest that do not form part of the expanded SG 4571 licence which will be subject to separate agreements.<\/p>\n
Petroleum Product Sharing Agreement<\/strong> Together, the Petroleum Exploration Development and Production Agreement (PEDPA) and PPSA form the Production Sharing Agreements (PSA) between the Republic of Zimbabwe and Geo Associates, demonstrating the Zimbabwe Government\u2019s commitment to implementing investor-friendly reforms and promoting and protecting foreign investment.<\/p>\n The PEDPA signed on 26th March 2021, and the PPSA to be signed following enactment of amendments to legislation, will establish a predictable, stable and transparent legal and fiscal regime commensurate with terms in the region, following international best industry practice, meeting the country\u2019s aspirations and providing investors and the Republic of Zimbabwe a fair share of any developed resources.<\/p>\n The PPSA has undergone independent review and is expected to be finalized and executed shortly.<\/p>\n Invictus Managing Director Scott Macmillan commented:<\/strong> The Company is also delighted with the approval of the expanded acreage in SG 4571, which substantially increases our footprint more than sevenfold to 709,300 hectares. The enlarged SG 4571 licence provides us with a basin master position encompassing the entire Cabora Bassa Basin in Zimbabwe. Subject to making an opening discovery with one of our first two wells, it potentially could provide us with future discoveries on a \u201cThe Company has committed to expanding the forward work program to drill a second well in addition to the Muzarabani prospect in the upcoming June 2022 drilling program, which if successful could be transformational for the Company and for the Republic of Zimbabwe.\u201d<\/p>\n
\nThe proposed Petroleum Product Sharing Agreement (PPSA), administered by the Ministry of Energy and Power Development, contains the fiscal provisions of the project, including the Republic of Zimbabwe\u2019s profit\/product share, and takes effect following the commencement of the production phase of the project. The PPSA will provide the Republic of Zimbabwe with a share of any developed resource in addition to the SWFZ
\nequity (assuming back-in-right is exercised).<\/p>\n
\n\u201cWe are extremely pleased to have executed the binding Heads of Agreement with the Sovereign Wealth Fund of Zimbabwe. This follows extensive negotiation and collaboration with the various ministries and government bodies over the last 7 months.
\n\u201cWe are grateful for the constructive efforts by the Zimbabwe Government to put the PEDPA and HOA in place and work towards finalisation of the PPSA. This will provide a robust framework to facilitate long-term investment in the oil and gas sector with confidence and ensures the country derives its fair share of any discovered resources.<\/p>\n
\nlarge scale within the basin.<\/p>\n