Australia’s Invictus Energy has scrapped a farm-in agreement for its Cabora Bassa project in Zimbabwe.
The company announced the non-binding deal on December 22, 2020. Invictus said it had been unable to complete due diligence on the counterparty and talks have ended.
Invictus has an 80% stake in Cabora Bassa.
The company is continuing to work on finding a new partner to support work on the project.
“Invictus is in a much better position than we were last year when we received the farm in offer,” said the company’s managing director Scott Macmillan.
“Whilst it was a good offer at the time it doesn’t really make sense for us to complete the deal at present as it substantially undervalues the asset given our market cap, the support that we have had from our shareholders and our ability to raise money, particularly for a relatively low cost onshore program.
“Our previous capital raise in March to fund the seismic program and drilling long leads was overbid by 5 times in the space of 3 hours.”
The company plans to drill a well early next year, Macmillan continued. This does not rely on bringing in a partner, he said.
Invictus is in the process of planning the construction of a camp for its seismic workers. It expects to begin acquiring seismic this month and complete the acquisition by the end of the third quarter.
The company had previously planned to drill a well to test its Mzarabani prospect. Invictus has said this may hold 8 trillion cubic feet and 250 million barrels. It has estimated the well cost may be $12 million.
Invictus signed up Aztech Well Construction, it announced in June, to work as drilling project manager.
Updated at 2:51 pm with comments from Macmillan.