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Orca Plans to Raise Funds on Songo Songo Project
September 19, 2010 (Source: Daily News – Abduel Elinaza (Dar es Salaam, Tanzania)
ORCA Exploration Group, which owns Pan African Energy, has announced the intention to raise funds through Rights Issue that would be primarily used to drill the Songo Songo West in Lindi.
The Rights Offering came after the British Virgin Islands firm received all necessary regulatory and Canadian TSX Venture Exchange approvals to raise USD 19.33 million before expenses.
Orca's Chairman and CEO, Mr W. David Lyons, said in a release that the Rights Issue will last for one month from September 2 to October 5, this year.
"The funds will be primarily used to drill the Songo Songo West exploration prospect in Tanzania in the latter half of 2011," Mr Lyons said adding "as well as to drill Elsa-2 appraisal well in Italy."
Orca is an international public company engaged in natural gas exploration, development and supply in Tanzania, oil exploration in Italy and the acquisition of an additional new oil exploration opportunity in another proven hydrocarbon basin.
In addition, Mr Lyons said, some of the funds will be allocated to the development of energy infrastructure in East Africa through the newly formed division of Orca, EastCoast Transmission and Marketing.
Energy and Water Utility Regulatory Authority (EWURA) Principal Public Relations Officer, Titus Kaguo told the 'Daily News' that they know Orca Exploration through its gas subsidiary Pan Africa Energy.
"The company is regulated by EWURA like any other natural gas company on downstream while for upstream the firm is regulated by TPDC," Mr Kaguo said yesterday.
Stakeholders have it that the USD 19m, however, is not enough to satisfy drilling operations and construction of infrastructure if the company wishes to do so. Mr Lyons said during the second quarter of this year, Orca's gas production and marketing in Tanzania generated funds flow of USD4.9 million, a 96 per cent increase compared with the same period in 2009.
He predicted gas sales volumes to increase further in the third quarter of this year "as there is greater demand for gas in electricity generation, as the country's hydro generation output declines during the dry season."
Meanwhile, Orca also wants to construct a pipeline from Dar es Salaam to Mombasa which is estimated to cover about 600 kilometres through the cost line. The company is an active participant in the project led by Songas Limited to maximize the capacity of the existing system to 140 MMcfd through the construction of new processing trains and the optimization of pipeline pressures.
"This is forecast to be operational by the end of 2012," Mr Lyons said. Orca also announced the creation of a new infrastructure division, EastCoast Transmission and Marketing which its first project being evaluated is the feasibility of a 207 kilometres onshore pipeline that could run parallel to the existing onshore pipeline from the Songo Songo field area to Dar es Salaam.