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INVICTUS Energy, the firm that is exploring for oil and gas in Zimbabwe's Muzarabani district, halted trading on the Australia Stock Exchange (ASX) on Thursday, saying it was working out a fresh funding deal.
Invictus did not disclose the nature of the transaction, but it revealed two weeks ago that it would be sinking its first test well during the first half of 2022.
And ahead of the project, Cluff Energy Africa acquired significant shareholding in the firm, moving it closer to building the US$20 million war chest required to sink the wells.
In a note filed with the ASX, Invictus said: "The securities of Invictus Energy Ltd will be placed in trading halt at the request of Invictus pending it releasing an announcement.
"Unless ASX decides otherwise, the securities will remain in trading halt until the earlier of the commencement of normal trading on Wednesday, December 29 2021, or when the announcement is released to the market".
Invitus said on December 10 that it had secured a drill rig for the Muzarabani-1 exploration.
Invictus executed a memorandum of understanding with EXALO Drilling SA to sink the Muzarabani-1 well.
The parties said there was an option for an additional well to be exercised by February 15, 2022.
The companies are expected to sign a binding rig agreement next year.
The firm last had a cash call in March, raising about US$5 million through a private placement.
Two weeks ago, the firm entered into an agreement with Cluff to unlock capital for the two-well exploration and drilling campaign.
Invictus said the farm in option agreement with Cluff would see the latter funding 33,33% of the costs for a 25% interest in the Cabora Bassa Project.
Invictus will remain as operator, the statement added.
"Cluff Energy Africa is currently assembling a portfolio of African oil and gas exploration assets with the intent of raising further capital during early 2022 to fund its exploration programmes," it said.
"Under the terms of the non-binding agreement, Cluff must exercise the option by 31 March 2022 to enter into a binding farm in agreement and a joint operating agreement and obtain the necessary funding to meet the farm in commitment for two wells. Invictus and CEA will also investigate the options for mitigating carbon emissions from the project including Carbon Capture and Storage or similar solutions to align with Zimbabwe's strategic objectives," it said.
Invictus managing director and chief executive Scott Macmillan said: "Invictus is pleased to enter into the option agreement with Cluff Energy Africa and work towards formalising our relationship in the Cabora Bassa joint venture over the coming months. Cluff is a like-minded partner and a close cultural fit, and their team has an outstanding track record of making and monetising discoveries in Africa".
He said Invictus was well placed to achieve significant accretive milestones during 2022 with a number of key catalysts ahead.
Cluff chairman Algy Cluff said the company viewed the Muzarabani project as a rare high-quality but low-cost opportunity that has world-class scale.