Invictus Energy provide an updates of its activities for the quarter ending June 2020.

June 2020 Quarter Highlights

• Placement with Strategic Investor at premium
• Production Sharing Negotiations ongoing with Republic of Zimbabwe
• Farm Out Process Advancing
• Drilling Cost Estimate Received

Placement with Mangwana Opportunities Fund at a Premium

Mangwana Opportunities Fund is an investor owned, closed end investment company which is managed by Mangwana Capital. It is funded by Zimbabwean institutional investors including pension funds and invests primarily in the fields of Agriculture, Mining and Tourism with an investment horizon of 10 years.

The shares issued to Mangwana will be held in escrow for 6 months from the date of completion. The agreement makes provision for a further equity investment by Mangwana for the project over the next 12-24 months as well as assisting the Company in achieving its strategic goals in country.

Appointment of Mr. Joe Mutizwa to the board of Invictus Energy Resources (Zimbabwe) Pvt Limited

In conjunction with the placement by Mangwana, the Company appointed respected Zimbabwean business person Mr. Joe Mutizwa, current chairman of Mangwana Capital, as a director of the Company’s 100% owned local subsidiary Invictus Energy Resources Zimbabwe Pty Ltd. Joe served for ten years as Chief Executive of Delta Corporation, one of Zimbabwe`s largest listed companies before taking early retirement in 2012.

He currently sits on the Presidential Advisory Council (PAC), a body appointed by Zimbabwe’s President, His Excellency CDE E.D Mnangagwa, which is comprised of experts and leaders drawn from diverse sectors to advise and assist the President in formulating key economic policies and strategies in the country. Joe served on the board of the Reserve Bank of Zimbabwe (2015-2019) and currently chairs the board of Star Africa Corporation Zimbabwe (ZSE: SACL), a local sugar refiner; as well as the board of the Infrastructure Development Bank of Zimbabwe (IDBZ).

Joe has a BSc degree (with first class honours) from The London School of Economics; an MBA from the University of Zimbabwe and an MSc from HEC – Paris and Oxford University.

Production Sharing Negotiations ongoing with Republic of Zimbabwe

During the quarter the Company continued its negotiations of a Production Sharing Agreement (PSA) with the Government of Zimbabwe through the appointed Technical Committee and legal representatives. The Technical Committee is chaired by the Secretary for Finance and Economic Development with the Permanent Secretaries for Mines and Mining Development and Energy and Power Development as members together with officials from the Reserve Bank of Zimbabwe (RBZ), Zimbabwe Investment and Development Agency (ZIDA), Office of the President and Cabinet (OPC), Office of the Attorney General and Local Government and Public Works.

Farm Out Process Advancing

The Company’s farmout process of the Cabora Bassa Project continues and active discussions with multiple parties are ongoing. The project has passed technical review/assessment and is undergoing commercial evaluation, above ground due diligence and detailed forward program costing (including drilling cost) with these parties. The completion of the commercial evaluation including in-country due diligence has been hampered by the COVID-19 travel and border restrictions in place in Zimbabwe and the wider region to date as well as the volatility in the oil market. The Company is working with the respective parties to finalise all the outstanding requirements as far as practical given the COVID related restrictions in place. The Company will provide further updates as per our continuous disclosure requirements.

Drilling Cost Estimate Completed and Rig Identification Commenced

During the quarter, the Company received an independent drilling cost estimate for a range of well designs (vertical and directional) with the total depth (TD) ranging from 2,000m down to 4,000m. The drilling cost estimates range from US$5.2 million (2,000m vertical well - low side estimate) to US$16.4 million (4,000m directional well - high side estimate) are consistent with the Company’s internal estimates. The best estimate for a 3,200m directionally drilled well to test the 8.2 Tcf + 249 million bbl Mzarabani Prospect is US$11.7m (excluding mobilisation) which confirms the ability to test a world class, material target at relatively low cost.

Corporate

In light of the global market and oil industry environment, the Board and Management has focused on reducing costs within its control. To this end, the Company has made cuts in various categories of its corporate costs in Australia from its already low overheads. The Board and Management have agreed to reduce their annual fees and remuneration by 25-50 percent effective 1 April 2020.

KeyFacts Energy: Invictus Energy Zimbabwe country profile