TORTOLA, British Virgin Islands. Orca Exploration Group Inc (“Orca” or the “Company”) announces that the Board of Directors has approved, in principal, the raising of approximately Cdn$19.2 million before expenses by way of a rights issue. The transaction will require the necessary regulatory and TSX Venture Exchange (“TSXV”) approvals.
It is intended that:
each holder of a Class B Subordinated Voting share (“Class B Share”) on the record date of the rights issue (the “Record Date”) will receive one right for each Class B Share held and that six rights will entitle the holder to subscribe for one Class B Share at a price of Cdn$3.90.
each holder of a Class A Common share (“Class A Share”) on the Record Date will receive one right for each Class A Share held and that six rights will entitle the holder to subscribe for one Class B Share at a price of Cdn$3.90.
The subscription price of Cdn$3.90 represents an 11% discount to the closing price of the Class B Shares on 14 June, 2010 of $4.40. Under the terms of the rights issue, the Company will issue a maximum of approximately 4,915,687 Class B Shares which represents approximately 18% of the currently issued and outstanding Class B Shares.
The completion of the rights issue is not conditional upon Orca receiving any minimum amount of subscriptions from shareholders. The Chairman and CEO, David Lyons, who currently holds 4,433,940 Class B Shares and 1,742,775 Class A Shares, has indicated that he will take up his full rights allocation.
“Orca is now ready to move to the next stage of growth,” said David Lyons, Orca’s Chairman and CEO. “We have expanded our exploration prospects to include new low risk, high potential drilling opportunities. Over the next eighteen months, Orca is committed to the drilling of two new high impact wells in proven hydrocarbon basins – one in the Elsa field offshore Italy and the other offshore Tanzania. In addition, we are awaiting ratification of a Production Sharing Contract that we signed earlier this year in another jurisdiction. The capital raised by this rights issue, along with cash flow from our expanding Tanzanian operations, will be productively employed to add value through these excellent prospects.”
The funds will be primarily used to drill the Elsa-2 appraisal well in Italy in Q4 2010 and for the drilling of the Songo Songo West exploration prospect in Tanzania in the latter half of 2011. The funds will also strengthen the Company’s ability to take advantage of additional exploration and development opportunities.
Haywood Securities is acting as Soliciting Agent and Haywood Securities and GMP Securities are acting as Joint Advisers to the Company in relation to the rights issue.
Full details of the rights issue will be described in a rights offering circular, which will be mailed to shareholders.
Orca Exploration 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. Orca Exploration trades on the TSXV under the trading symbols ORC.B and ORC.A.”
| W. David Lyons, Chairman and CEO +44-7717-100-200 wdlyons@orcaenergygroup.com | Nigel A. Friend, CFO +255 (0)22 2138737 wdlyons@orcaenergygroup.com |
| Haywood Securities Dave Street +1-403-509-1937 | GMP Securities Dan Tsubouchi +1 403 543 3037 Nick Morgan +44 20 7647 2808 |
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
Certain information set forth in this news release contains forward-looking statements. More particularly, this news release contains statements concerning transactions contemplated by the rights issue, the expected terms of the rights issue, Orca’s future drilling plans and the use of proceeds from the rights issue. These forward-looking statements that involve substantial known and unknown risks and uncertainties, certain of which are beyond Orca Exploration’s control, including 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, obtaining required approvals of regulatory authorities and the TSXV of the rights issue and the board of directors of Orca determines that it would be in the best interests of Orca to deploy the proceeds for some other purpose. 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.
With respect to forward-looking statements contained in this news release, Orca has made assumptions regarding: availability of skilled labour; timing and amount of capital expenditures; future exchange rates; the price of oil and natural gas; the impact of increasing competition; conditions in general economic and financial markets; availability of drilling and related equipment; effects of regulation by governmental agencies; future operating costs and ability to obtain required regulatory approvals.
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.
Not for dissemination or distribution in the United States or to United States news wire services.