Orca Exploration reports increased Tanzania gas production and announces exploration and development drilling schedule

TSX-V: ORC.A, ORC.B

TORTOLA, British Virgin Islands, Sept. 27, 2011 /CNW/ - Orca Exploration Group Inc. ("Orca" or the "Company") reports that in August 2011 it was able to significantly increase the supply of natural gas to Dar es Salaam power generation facilities following the re-rating of gas processing facilities on Songo Songo Island. This increase in gas availability is helping to reduce the power shortages that have been impacting Tanzania following the failure of the rains which significantly reduced the country's hydro generating capacity.

During August 2011, Orca's Additional Gas sales averaged 57 MMcfd compared with 37 MMcfd in 2010.  Of this, 84% was sold to the Tanzanian power sector (48 MMcfd compared with 30 MMcfd in 2010). Orca staff was instrumental in completing the technical evaluations that enabled the re-rating to proceed.

Currently Tanzania is short approximately 200-300 MWs of power capacity and is introducing emergency oil fired generation to alleviate the shortfall.  This oil fired generation is intended to be replaced with gas fired generation once more gas can be transported to Dar es Salaam.  To accelerate the delivery of increased gas volumes to Dar es Salaam, the Government of Tanzania has indicated that it will install a new coastal gas pipeline system financed by funds from the Chinese Exim Bank.  The first phase of this project is expected to be the looping of the existing 200 kilometer onshore pipeline from Songo Songo that will enable 200 MMcfd to be transported to several new power plants that are currently planned for the Dar es Salaam area. These Government infrastructure plans will provide long term energy security for Tanzania and potentially East Africa.

"Orca is committed to invest the capital in natural gas exploration and development to ensure that it can deliver the 200 MMcfd from its Songo Songo licence acreage in parallel with the Government announced infrastructure developments and I have communicated this to President Kikwete," stated W. David Lyons, Orca Chairman and CEO. "These are exciting times. The proposed infrastructure developments in Tanzania are exactly what are required to alleviate the energy shortages in Tanzania and Orca is committed to fully play its part."

The first part of this commitment will be achieved by the drilling of the "SSA" development well and the completion of remedial work on SS-10.  A letter of intent has been signed with a drilling rig contractor and long lead items have been purchased.  It is expected that the SSA well will be spud in November 2011. The Company is also in discussions to source a jack-up rig to drill the Songo Songo West exploration prospect.  The target is to spud this exploration well during Q2 2012 and long lead items have been ordered.

Orca Exploration is an international public company engaged in natural gas exploration, development and supply in Tanzania, the development of a coastal pipeline gas network in East Africa, oil and gas appraisal in Italy and the acquisition of additional new high potential exploration opportunities in Europe and Africa. Orca Exploration trades on the TSXV under the trading symbols ORC.B and ORC.A.  

SOURCE Orca Exploration Group Inc.

For further information:

W. David Lyons, Chairman and CEO
+44-7717-100200
wdlyons@orcaexploration.com
  Nigel A. Friend, CFO
+44-7798-502316
nfriend@orcaexploration.com
Dale Rollins, COO
+44-7713-358467
drollins@orcaexploration.com


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