21 November 2011
Orca Exploration Group affirms conformity to PSA terms
TORTOLA, British Virgin Islands Orca Exploration Group Inc. ("Orca" or the "Company") announces that on Friday November 18 the Parliament of Tanzania received a report from a special Parliamentary Committee that we understand accused Orca's subsidiary PanAfrican Energy Tanzania Limited ("PanAfrican") of certain irregularities and recommended that the Songo Songo Production Sharing Agreement ("PSA") be terminated.
Orca strongly rejects the findings of the Parliamentary Committee Report. We consider the findings unjustified and should it become necessary we will defend our rights in accordance with terms of the PSA. We remain optimistic and confident that the Government of Tanzania will recognise the Company's long-standing contributions to building a secure, environmentally sustainable and efficient delivery system to produce and deliver natural gas to meet Tanzania's urgent power needs.
Orca is committed to working with the Tanzanian government through its subsidiary, PanAfrican, to address these issues in the interests of both the Company and the development of Tanzania's energy sector. Despite these allegations, Orca continues to advance the development of the Songo Songo gas field with the approval of the Tanzania Ministry of Energy and Minerals. Orca has mobilised the Sakson PR5 land rig to Songo Songo Island and expects to be able to begin drilling an onshore development well on 23 December 2011. This is the first part of Orca's announced US$130 million expansion program in Tanzania to double gas production capacity. This first well is expected to have initial production capacity of 60 MMcfd.
Over the last 10 years, Orca has been a key player in Tanzania's first and largest natural gas development. Production from the Songo Songo gas field commenced in July 2004. Current infrastructure enables Orca to process and transport 102 MMcfd – the maximum that can be safely shipped to Dar es Salaam through the existing pipeline owned by Songas Limited.
Through PanAfrican Energy, Orca plays an important role in the production and processing of natural gas for power generation and industrial purposes in the Dar es Salaam area. The Company is committed to work with all stakeholders to increase the current Songo Songo gas infrastructure capacity from 102 MMcfd to over 200 MMcfd.
Orca Exploration is an international public company engaged in natural gas exploration, development and supply in Tanzania and oil and gas appraisal in Italy. Orca Exploration trades on the TSXV under the trading symbols ORC.B and ORC.A.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward Looking Statements
This document contains forward-looking statements. These forward-looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond Orca Exploration's control, including, but not limited to, the impact of general economic conditions in the areas in which Orca Exploration operates, civil unrest, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility, competition for, among other things, capital, drilling equipment and skilled personnel, and obtaining required approvals of regulatory authorities. In addition there are risks and uncertainties associated with oil and gas operations, therefore Orca Exploration's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking estimates and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking estimates will transpire or occur, or if any of them do so, what benefits, including the amounts of proceeds, that Orca Exploration will derive therefrom. Such forward-looking are based on certain made by Orca in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors Orca believes are appropriate in the circumstances, including, but are not limited to, the ability of Orca to add production at a consistent rate; commodity prices will not deteriorate significantly; the ability of Orca to obtain equipment in a timely manner to carry out exploration, development and exploitation activities; and future capital expenditures. The forward-looking statements contained in this press release are made as of the date hereof and Orca undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
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