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Robin Sutherland joins IVZ as a Non-Executive Director

Robin was also at Energy Africa before Tullow got involved.

After the Tullow acquisition, Robin led the Tullow Oil exploration team through multiple discoveries, including the ones made in the Lokichar Basin in Kenya, where Tullow Oil was the joint venture partner in our first ever oil & gas Investment success Africa Oil Corp (the one we always compare to IVZ).

Our view is that board members like this would not have joined unless they thought there was potential to build IVZ into a developer and eventual acquisition target, and it seems that the results from the initial drill campaign have given them that confidence.

So while the market masses punished the IVZ share price on the result delivered, two highly successful oil & gas experts seem to think it was good enough to join the board.

We expect IVZ founder and MD Scott Macmillan is busy getting the new board members across the drill results and jointly coming up with a forward exploration and drilling plan that will put IVZ in the best position for success. Now with the added learnings of the new board members’ previous successes, networks and relationships feeding into IVZ’s strategy.

So we wait to hear from IVZ when it will drill next, and where.

Once IVZ’s forward plan is released to the market we will create a new IVZ Investment Memo to track how well it executes on this plan, potential risks (no drilling delays please), and our Investment plan.

At that point we will share our “report card” on how well IVZ performed against our first Investment Memo — rating IVZ’s achievement of objectives, which risks materialised, and how we did on sticking to our Investment plan.

In a two hour podcast interview, IVZ MD Scott Macmillan says that not being able to declare a “discovery” was not a geological issue, it was because of tool and equipment issues. But the market seems to have priced the outcome as a failure.

We listened to the whole interview and the key highlights are summarised later in this note.

This week IVZ sent a direct signal on how confident it is in making a future discovery, appointing two new board members with experience in taking small African oil & gas explorers to developers, eventually leading to takeovers by much larger companies.

John Bentley joins IVZ as chairman

John built Energy Africa from the ground up, listed it on the Johannesburg and Luxembourg stock exchanges and eventually sold the company to Tullow for US$500M.

As CEO, over a five year period, John helped Energy Africa set up operations across 12 different African countries with several major discoveries across the continent.

Our 2020 Energy Pick of the Year Invictus Energy (ASX: IVZ) was just a “movable fluid sample” away from formally declaring a maiden oil & gas discovery in Zimbabwe.

IVZ has all but unlocked an entirely new oil and gas basin in Africa. They were excruciatingly close - but were thwarted by tool and drilling equipment failures at the final step.

Today we will run through all that's happened since IVZ’s maiden well, including some impressive new board appointments, and what we expect to happen next.

On its first well, IVZ hit gas shows 135 times above background levels, up to 13 different potentially hydrocarbon bearing reservoir units and, most importantly, identified a working conventional hydrocarbon system.

That’s everything except that one final step of bringing a hydrocarbon sample to surface — all because of equipment and tool failures. Very frustrating — especially when you consider that in 95 out of 100 of these types of drilling events nothing is found.

The good news is that IVZ has clearly established a new hydrocarbon province. Whilst not an ‘official discovery’, the results have set the scene for future drilling events, substantially de-risking IVZ’s wider acreage from a geological perspective.

We are now waiting for a forward plan from IVZ - specifically when and where it will drill its next high impact exploration well.

After a decent share price run to as high as 40c leading into the first drill result in December, the price came off after the final result wasn’t able to be “formally” declared a “discovery”. The share price now seems pretty happy bouncing around 16c.

We held a bigger position than we usually would have into the result, and continue to hold that position now.

We are happy to hold as we expect a similar price run in the lead up to the next drill and drill result. This time we expect a higher likelihood of success - given the knowledge gained and lessons learned from the first drill that was so painfully close to declaring a discovery.

Unfortunately I am unable to go to the AGM, but I am hopeful someone will be there to ask them some hard questions about all this.

£26m cash funding and nothing to show for it yet? That Minch - maybe he is good mates with the BoD for if it was me on the BoD I would be holding Minch to account for this ridiculous situation of £26m funding and still nothing.

We have seen sells recorded as buys too - so no way really to work out of that is a buy or sell

probably why he got the bonus - come on Ian, you know Im doing my best! I cant lose here, you need to give me a catch up payment lets call it a Bonus.

£10m in the BANK, I wonder what the next RNS will be....my preference is a straight - we got the drill, we drilled and this is to declare a Discovery, we are now looking at turning this site to production and to also design a comprehensive drilling campaign across the entire licensed areas. Further funding is business loans and grants, our share capital remains as is. We expect the project to become self funding after two years. We will be updating you regularly moving forward with all exciting developments.

sounds like Renergen have excellent make it happen management who are looking out for these loans for funding purposes. Dont think Minch is of sufficient business calibre to seek out similar deals for the project. Doesnt care about the share price but at the same time highly disappointed he had to get 10m funding at 5p a share. What a contradiction that is.

I really really hope that Minch isnt slacking around today but is putting together an agreement with a drilling contractor who can actually get the job done and get the project upgraded to Discovery confirmed status. He has such an amazing opportunity, a billion dollar company to set up and its all for the upside - I really hope that he sees it like this and not some kind of side show / hobby / nice little earner regardless of outcome sorta thing.... Gosh Minch - show some muscle for this project! If you dont have what it takes, hand over the Ian requesting a replacement - loads of good quality business guys out there who will make it BIG with HE1... so we dont need you if you not interested and invested in a big way ... Good Luck!

because its not up for vote as an agenda item

remember when Minch was 'proudly' saying - we havent been back to the funding market for 18months - whats to be proud about that when you have achieved nothing except blow the cash on no results? I dont think he should be proud at all. The BoD should already be scouting for replacement project lead given his failures to do business. He could be offered a role in the Geology team supporting HE1 but not the project lead. He is not a business person. Doesnt get things done over a very long period of time and still he is taking his time. He's had his time. it's a shame he cant be voted out.

Also I forgot to mention - his lack of care or regard for the share price is why we were forced to go cap in hand to a 5p raise -- a very bizarre approach for a CEO to say how disappointed he was to get 5p fund raise yet at the same time state something that indicates to me that he doesnt really care about the share price. Total contradiction.

My interpretation is that he has made it clear that he doesnt care about the share price - claiming the price speaks for itself and/or will speak for itself. Note he doesnt have much skin in the game with very low shareholdings in the project himself. Also he doesnt appear to be in any urgency with resolving yet another adverse outcome saying Q1 is out for sure, and he will take their time in 2023, but yes at some point will drill. No sense of urgency; more a feet up grab a beer chill out approach. Thats our Minch. Cruising....

I hope he is not mucking around with the idea of creating a drilling club. Would be cumbersome, open operational and legal risks to the project, risks to timelines and delivery of milestones - etc - unfortunately with this Minch it is probably something he would do. Surely the Board can do better too. IMO they are taking this HE1 project as a joke and/or wee little side hobby of theirs.

he has ALWAYS said "the news flow going to increase now" and it never has... just occasional release of good news quickly followed by an operational update declaring it didnt go as planned (and repeat)...

he does need to be held to account and isnt. I cant see how he has been working full time on HE1 I suspect that he is tied up with other projects brewing away but of course he wouldnt RNS this. The evidence is in the share price and project performance to date. Clearly as at today a fail. He has very little share holdings of his own in HE1 and his benefit is the huge cash salary he takes from HE1 and 'if they do go well' he can buy significantly volume of below market priced shares. So he really has taken a feet up approach to a very low risk lifestyle for himself.

Minch stated the cost of the Predator and Exalo Rigs were comparable. This is disputable given the clear differences in size, mobilisation efforts, supporting equipment & crew, etc for each option. Please could you reaffirm your statement and explain how is the cost actually comparable for these two options? We just want to be sure you as CEO wont be taken for a ride on our behalf if you believe these two rigs options are like for like on a cost basis.

I would question the Predator and Exalo were comparable - both are very very different sizes - the Exalo was a monster compared to the Predator. The mobilisation of the Exalo set up is extensively different than for the smaller Predator set up. I am not convinced in what he says in this regard and yes you are right they would have known how much the Predator was going to cost the project a long time ago - this ambiguity is not ideal is it.

poor planning and not thinking ahead and aligning existing shareholder interests - goes back to what I have said earlier - CEO is a Geologist - not a business person or a exploration project lead type of candidate IMO -- a rush to secure a £10m funding within days is not good planning outcome is it - and for 5p - was backed in a corner - he shouldnt have been in that position - we assume he got it all under control but doesnt appear to be the case and so is winging it...