Zimbabwe-focused wildcatter Invictus Energy has given a potential farm-in company more time to come up with a firm offer to take a stake in promising acreage in the frontier Cabora Bassa basin.

Invictus has an 80% stake in Geo Associates which operates the freshly expanded SG 4571 licence area where a highly anticipated exploration probes are due to spud within months on huge gas and condensate prospects.

Late last year, Invictus struck a deal granting Cluff Energy Africa the option to farm-in to this acreage.

That agreement expired on 31 March, but Cluff has been granted until 30 April this year to submit a binding offer.

Cluff submitted an extension request after last week’s deal between Invictus, Zimbabwe’s government and the Sovereign Wealth Fund of Zimbabwe (SWFZ) to increase the SG 4571 licence area from 100,000 to 709,300 hectares.

The extension to the option period coincides with the revised mobilisation date for Exalo’s Rig 202 from Tanzania which is now expected to arrive at the project in mid-June, rather than in early May as in originally planned.

A two-well campaign is the goal, including Muzarabani-1 which will target 8.2 trillion cubic feet and 247 million barrels of conventional condensate.

Cluff will now have additional time to assess the bigger SG 4571 area and finalise additional funding requirements associated with the drilling campaign and past costs.

Invictus, meanwhile, is in active discussions with other parties about a farm-in deal.

The acreage expansion deal will see the SG 4571 licence and application area amalgamated with the SWFZ’s MSC003 Cabora Bassa South reserved area, and will cover the entire Cabora Bassa basin.

Geo Associates and the government will also conclude a petroleum production sharing agreement that will encompass legal and fiscal provisions to govern the asset and any development.

SWFZ will be entitled to a 10% equity back-in-right to the extended SG 4571, exercisable within six months of a final investment decision on a future project.

Geo Associates and SWFZ may also collaborate to explore in areas of mutual interest that do not form part of the expanded SG 4571 licence.

The proposed PPSA — administered by the Ministry of Energy & Power Development — contains the fiscal provisions of the project, including Zimbabwe’s profit/production share.

Together, said Invictus, the Petroleum Exploration Development & Production Agreement, which was signed a year ago, and PPSA — which is due to be gazetted soon — form the production sharing agreements between the state and Geo Associates.

Invictus managing director Scott Macmillan said the SWFZ agreement “follows extensive negotiation and collaboration with the various ministries and government bodies over the last seven months”.

Mthuli Ncube, Zimbabwe’s Minister of Finance & Economic Development, added: “I would reassure our partners that as a government we fully support the aggressive investment into oil and gas exploration which they are carrying out and we are confident that this agreement lays the foundation stone for a vibrant and productive oil and gas sector that will contribute to the creation of jobs, generation of exports and delivery of energy security to Zimbabwe.”

Following the signing of the Geo Associates and SWFZ partnership, Invictus and its local partner One Gas Resources will amend their shareholders’ agreement and the terms of One-Gas’ carried interest in the expanded SG 4571 licence.

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