Invictus Energy has signed a binding well services contract with Baker Hughes for drilling in Zimbabwe, following a capital raise.
The Australian-listed company signed a letter of intent with Baker Hughes in February. This covers the company’s two-well programme at the Cabora Bassa project.
It expects to begin the first well, Mukuyu-1, by the end of July.
Baker Hughes will cover services including cementing, mudlogging, wireline, drilling fluids and mud engineering, tubular running, finishing and abandonment, directional drilling and logging, liner hangers, drill bits, reservoir technical services and project management.
The Exalo Rig 202 will carry out the drilling work. It will arrive in Zimbabwe in early June from Tanzania.
Invictus managing director Scott Macmillan said the deal with Baker Hughes was “another significant milestone” for the company.
“The basis of well design has been completed and the well pad construction for the first well in the drilling sequence, Mukuyu-1, is progressing well. The Exalo 202 rig is expected to start its mobilisation in the coming days once it is released from Tanzania,” he said.
“We remain on track to spud the first well end of July,” he said. The company is also working on selecting a “second well location”.
On May 23, the company announced a private placement to raise around $12 million, through the issue of 60mn shares. It has estimated costs on the first well to be $9mn. Another $2.3mn will go to working capital and $0.7mn to fees.
It should complete the private placement before drilling begins.
Invictus is working on a farm-in partner, which it believes would cover the cost of a “significant portion” of drilling.
“We also continue to progress bids received from multiple potential farm-in partners and will provide a further update on the farm-in process in due course,” Macmillan said.