Published: 19 hours ago

Auditors have raised concerns over the financial viability of Australia-listed explorer Invictus Energy, which is developing Zimbabwe's Cabora Bassa oil and gas project in the Zambezi Valley.

In a review of the company's half-year financial results for the period ended December 31, 2025, BDO Audit director Dave Andrews warned of a "material uncertainty" that could cast doubt on the group's ability to continue operating as a going concern.

"We draw attention… to the existence of a material uncertainty that may cast significant doubt about the group's ability to continue as a going concern," Andrews said, adding that his conclusion was not modified despite the concern.

Invictus Energy reported a loss after tax of A$4.2 million for the half-year, widening from A$3.3 million in the prior comparable period. The company also recorded net cash outflows of A$4.1 million from operating and investing activities.

The company itself acknowledged the uncertainty, noting that its ability to continue depends on securing additional funding over the next 12 months.

A major setback came in January when Invictus terminated a financing deal with Al Mansour Holdings and Al Mansour Oil & Gas. The arrangement, signed in August 2025, would have included a US$37.8 million equity investment and up to US$500 million in future funding for the Cabora Bassa project.

The collapse of the deal removed what had been a key potential funding pipeline for the project.

To stabilise operations, Invictus has since secured A$10 million in new placement commitments, which the company says will support ongoing exploration, including the follow-up to its Mukuyu gas discovery and preparations for the Musuma prospect.

Managing director Scott Macmillan described Musuma as a "low-cost, low-risk vertical well" with significant upside potential, saying success could expand the company's resource base and accelerate commercial development.

The Cabora Bassa basin has been seen as Zimbabwe's most promising hydrocarbon frontier, following earlier gas discoveries that revived hopes of domestic oil and gas production.

A successful development could reduce fuel import dependence and improve energy security. However, analysts warn that exploration success alone is not enough without sustained capital backing.

The auditors' warning highlights the challenge facing junior explorers globally, where promising geological finds often struggle to transition into commercial production due to funding constraints.

The strain comes as southern Africa experiences renewed energy exploration momentum, with major offshore oil and gas activity in Namibia and Mozambique, and continued exploration in South Africa, Botswana, and Zambia.

Against this backdrop, Zimbabwe's Cabora Bassa project remains a high-potential but high-risk frontier venture, where financial sustainability may prove as decisive as geological success.
- The Independent