Independent oil and gas company Invictus Energy is eyeing a listing on the Victoria Falls stock exchange (VFEX) as the resources firm looks at enhancing local participation on the new bourse.
The Australia Stock Exchange listed Invictus Energy is undertaking the highly prospective Muzarabani oil and gas project in Mashonaland Central Province in partnership with local consortium One Gas Resources which holds a 20% stake.
The latest plan to list locally comes after VFEX was last week granted license to operate a securities exchange by the regulator, the Securities and Exchange Commission of Zimbabwe (SECZ) where the new market is expected to result in an inflow of hard currency to Zimbabwe, an economy embattled with forex shortages.
Invictus Energy chief executive Scott McMillan told journalists in a virtual press conference yesterday that the mining firm was considering local listing as a way to increase participation by willing local investors.
“This is something that we are considering taking into consideration the recently launched Victoria Stock Exchange which is exciting us,” McMillan said.
Geo Associates executive chairman Paul Chimbodza said “listing on the local bourse is something that is still being discussed internally”.
Muzarabani Oil and Gas Project is held under Special Grant No4571 issued to a locally-registered company, being Geo Associates (Pvt) Ltd.
The two shareholders in Geo Associates are the ASX-listed Invictus Energy (80%) and the local partner One Gas Resources (Pvt) Ltd (80%).
Invictus Energy has plans to invest about US$40m on initially drilling two wells at its Muzarabani oil project.
To date the company has invested close to US$3.5m towards preliminary works at the site.
The company has started to aggressively move towards operationalising the oil and gas project where the Australian Stock Exchange-listed firm is boasting of immense financial muscle to undertake the project which is expected to run into billions.
Invictus Energy targets to drill two wells in 2021 – a move expected to determine the future of the project.
Speaking at the same event Mines and Mining Development Minister Winston Chitando said the government was excited by progress registered to date.
Chitando noted that a production sharing structure was still being negotiated with a draft already in place waiting for government approval.
“As you are aware the oil and gas mineral is something new and we have always been focusing on gold and other minerals where the government has been getting royalties.
This is now a different ball game and we are discussing with the investor on what will be the best production sharing structure,” Chitando said.
The interest by Invictus to list on VFEX is a confidence booster on the bourse which is still receiving interest from sponsors, securities dealers, securities custodians, securities transfer firms, and investment management firms.
The bourse comes after three dual-listed counters Seed Co International, PPC, and Old Mutual were told to stop trading on the Zimbabwe Stock Exchange (ZSE).
This comes after an investigation noted that the implied exchange rates were being derived from the comparison of dual-listed shares prices on ZSE and other exchanges and such implied rates were believed to be one of the leading indicators of speculative parallel foreign exchange rates in Zimbabwe.
ZSE informed dual-listed counters that it would set up a foreign currency bourse where the dual-listed firms would trade in United States dollars to eliminate the calculation of implied exchange rates.
ZSE chief executive officer Justin Bgoni told Business Times the bourse is finalising the clearing and settlement process with the Reserve Bank of Zimbabwe to ensure the exchange debuts smoothing adding “we can’t rush the process”.