INVICTUS Energy, the Australian-listed resources junior undertaking massive gas and oil exploration in Zimbabwe’s Zambezi Valley, came under scrutiny from the Australian Securities Exchange (ASX) this week, only days after inking a crucial deal in Harare.
The transaction, known as the Petroleum Production Sharing Agreement (PPSA), was signed in Harare, raising hopes of a fresh source of fiscal revenues for a country battling prolonged economic turbulence and shrinking tax inflows.
Although commercial oil production has not yet commenced in the Cabora Bassa fields, ASX raised concerns over the timing and manner in which disclosures were made on the bourse.
The Australian exchange has strict disclosure requirements for companies trading on its platform, demanding timely and accurate information that could materially affect share prices.
The ASX fired its queries after Invictus’ shares rose sharply before the transaction was announced.
Invictus’ share price rose from an opening price of A$0,055 on May 25 to close at A$0,067 on May 26, a day before the company requested a trading halt.
The ASX questioned the Perth-headquartered oil and gas explorer on whether it complied with continuous disclosure obligations.
It asked Invictus to explain when it first became aware that Zimbabwe-based Geo Associates, its operating subsidiary, and the Government of Zimbabwe intended to sign the agreement.
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The bourse also sought clarification on whether the information should have been disclosed to investors earlier.
However, Invictus said it only received notification from Zimbabwe on the evening of May 26 that the agreement would be signed.
The notification came after trading had closed, prompting the company to seek a trading halt effective from the start of trading on May 27.
The market announcement confirming the execution of the PPSA was subsequently released on May 28.
Invictus acknowledged that the signing of the agreement constituted material information that could affect the value of its securities.
However, it argued that before May 26, the proposed agreement remained uncertain and subject to further government approvals and processes beyond its control.
“IVZ (Invictus) was not in possession of
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