TSX-V: ORC.A, ORC.B
TORTOLA, British Virgin Islands, June 15, 2015 /CNW/ - Orca Exploration Group Inc. ("Orca" or the "Company") announces that it is proceeding with the first phase of the Songo Songo development programme following World Bank board approval of the International Finance Corporation ("IFC") financing.
IFC has received approval by the board of World Bank for an investment by IFC of up to US$60 million in the Company's operating subsidiary, PanAfrican Energy Tanzania Limited. The investment is currently contemplated as a subordinated, income participating loan with flexible repayment terms and a maximum tenor of approximately 10 years. Completion of the IFC financing is subject to final agreement of specific terms and the negotiation and signing of definitive documentation. Initial drawdown of the facility will be subject to a number of terms and conditions, including satisfaction by IFC of the sustained payment performance of the Tanzania state utility, TANESCO, in respect of ongoing gas deliveries by the Company.
Subsequent to the approval of the IFC financing, the Company entered into a drilling contract with Paragon Offshore plc for the use of its M826 Mobile Drilling Workover Rig, as well the provision of associated services, in order to execute the offshore phase of the development programme for the Songo Songo gas field. The Paragon M826 Mobile Drilling Workover Rig was selected to operate in the somewhat unique shallow water operating environment around Songo Songo Island. The Company still needs to obtain certain regulatory and contractual approvals related to certain aspects of the development programme.
The drilling contract provides for a commencement date between 1st August 2015 and 21st September 2015, with the exact date being the date the drilling rig arrives at the Company's first well location in Songo Songo. The contract carries a minimum duration of 90 days and a minimum financial commitment of US$21 million excluding withholding tax. The Company's commitments under the drilling contract are not subject to completion of the IFC financing or funding of such financing.
The Company currently anticipates operations commencing by September 2015. The operations are planned to include workovers (being the removal and replacement of production tubing strings) on three existing wells (SS‑5, SS-7 and SS-9) and the drilling of one new well (SS-J). The Company also retains the option to drill a further two wells, subject to the success of the workovers.
Orca Exploration Group Inc.
Orca is an international public company engaged in natural gas exploration, development and supply in Tanzania through the wholly-owned subsidiary PanAfrican Energy Tanzania Limited ("PanAfrican Energy"), as well as oil and gas appraisal in Italy. Orca trades on the TSX Venture Exchange under the trading symbols ORC.A and ORC.B.
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 Information
This news release contains forward-looking information. More particularly, this news release contains statements and information concerning, but not limited to, the Company's expectation that the IFC financing will be in the form of a subordinated, income participating loan with flexible repayment terms and a maximum tenor of approximately 10 years and that the Company and the IFC will come to a final agreement on other specific terms as well as agree on definitive documentation, and the Company's anticipation that it will obtain the necessary regulatory and contractual approvals related to certain aspects of the development programme and commence operations pursuant to the drilling contract by September 2015 that include workovers on three existing wells and the drilling of one new well. Although management believes that the expectations reflected in the forward-looking information are reasonable, it cannot guarantee future agreement, levels of activity, performance or achievements since such expectations are inherently subject to significant uncertainties and contingencies. As a consequence, actual results may differ materially from those anticipated in the forward-looking information.
Forward-looking information involves substantial known and unknown risks and uncertainties, certain of which are beyond Orca's control, and many factors could cause the actual results to differ materially from those expressed or implied in the forward-looking information presented by Orca, including, but not limited to: the failure to successfully negotiate definitive documentation with the IFC; risk that Paragon Offshore plc fails to fulfill the terms in the drilling contract; the impact of general economic conditions in the areas in which Orca operates; changes in laws and regulations including changes in how they are interpreted and enforced; the lack of availability of qualified personnel or management; obtaining certain required contractual approvals and approvals of certain regulatory authorities; risks associated with negotiating with foreign governments; inability to access sufficient capital; and risk that the Company will not be able to fulfill its obligations. Actual results, performance or achievements could differ materially from those expressed in, or implied by, the forward-looking information and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits Orca will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive.
Such forward-looking information is based on certain assumptions made by Orca in light of its experience and current knowledge of the circumstances, as well as other factors Orca believes are appropriate in the circumstances, including, but not limited to: that the Company and the IFC will come to a final agreement on specific terms and successfully negotiate definitive documentation; that the Company will obtain necessary regulatory and contractual approvals related to certain aspects of the development programme; that the Company will have sufficient cash flow, debt or equity sources or other financial resources required to fund its operations; and other matters.
The forward-looking information contained in this news release is made as of the date hereof and Orca undertakes no obligation to update publicly or revise forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
SOURCE Orca Exploration Group Inc.
For further information: please visit www.orcaexploration.com or contact: W. David Lyons, Chairman and Chief Executive Officer, +44-7717-100200, [email protected]; Robert S. Wynne, Chief Financial Officer, +1 (403) 399-8046, [email protected]