Australia’s Financial Woes Impact Gas, Oil Explo...

Australia’s Financial Woes Impact Gas, Oil Exploration in Zim

Nyashadzashe Ndoro

Chief Reporter

Victoria Falls Stock Exchange listed oil and gas exploration company, Invictus Energy Limited, has reported that its quarterly expenditure was impacted by the weakening Australian dollar against the US dollar, according to its quarterly report for the period ending December 31, 2024.

The company's exploration and evaluation activity spend for the quarter totaled AUD$3.93 million (US$2.5 million), with the weakening AUD-to-USD exchange rate increasing the AUD equivalent of US dollar payments. This expenditure includes non-recurring payments for the close-out of the Mukuyu-2 well, which amounted to AUD$2 million.

“The exploration and evaluation activity spend for the quarter totaled AUD$3.93 million. This includes non-recurring payments for the close-out of the Mukuyu-2 well (AUD$2 million) and has been impacted by the weakening AUD-to-USD exchange rate, which increased the AUD equivalent of US dollar payments,” the company stated.

According to a report by the Australian Broadcasting Corporation last week, the Australian dollar has fallen to its lowest level since 2020, trading at around 61.44 US cents. This represents a significant drop of nearly 9% against the US dollar over the past three months.

The decline is attributed to a surge in the US dollar, which reached a two-year high following stronger-than-expected employment data from the US.

Although the Australian dollar’s decline has been more pronounced against the US dollar, it has been less steep compared to other currencies.

The ABC report further states that the Reserve Bank of Australia's trade-weighted index provides a more nuanced view of the Australian dollar’s value by considering its performance against a basket of currencies. While the TWI has weakened, it has not declined as sharply as the AUD-USD exchange rate, indicating that the Australian dollar’s depreciation is largely driven by the strength of the US dollar.

Despite the currency fluctuations, Invictus has reported significant progress in its operations and corporate developments.

Operationally, the company has completed the final independent review of the Petroleum Production Sharing Agreement, marking a crucial milestone in the development of its exploration and production activities in Zimbabwe.

The PPSA ensures an equitable distribution of value generated from the Cabora Bassa Project among the government, Invictus, and its partners.

The company is also advancing its farm-out process, engaging with potential partners to secure funding and support for the Cabora Bassa Project. The next drilling campaign will focus on exploring the Musuma prospect, which has an estimated recoverable prospective resource of over 1 trillion cubic feet (Tcf) of gas and 73 million barrels of condensate.

Additionally, Invictus plans to conduct further 3D seismic studies, appraisal drilling, and well testing at the Mukuyu Gas Field to determine future development well locations. This is in preparation for the early commercialization of a pilot gas-to-power project for the Eureka Gold Mine.

On the corporate front, Invictus has completed the second tranche of its US$10 million strategic investment in Zimbabwe. Due to strong demand, the company raised an additional US$2 million in oversubscriptions. This investment marks a historic milestone, as investors in Zimbabwe can now hold and trade securities in the company through its secondary listing on the VFEX.

The company’s Annual General Meeting (AGM) was held on November 29, 2024, with all resolutions passed. Invictus also reported an exploration and evaluation activity spend of AUD$3.93 million for the quarter.

In compliance with ASX Listing Rules, Invictus disclosed that AUD$239,701 was paid to related parties of the company, covering executive director salaries, non-executive director fees, and company secretary fees during the quarter.

Invictus Energy Limited is an independent upstream oil and gas company headquartered in Perth, Australia, with offices in Harare, Zimbabwe.

The company is transitioning from an exploration-focused entity to a development-focused one following a significant gas discovery at the Mukuyu field in the Cabora Bassa Basin in Zimbabwe.