TORTOLA, British Virgin Islands. Orca Exploration Group Inc (“Orca” or the “Company”) has announced the creation of EastCoast Transmission and Marketing as the new infrastructure division of the Company.  Orca is currently in discussion with potential pipeline expansion partners and is keen to have a significant East Africa finance component as part of the infrastructure project.  

EastCoast Transmission will initially focus on expanding the onshore natural gas pipeline system transporting Songo Songo gas to Dar es Salaam. This will require the twinning of the existing 207 kilometer pipeline from Somanga Funga, where the marine pipeline from the Songo Songo gas field connects to the mainland, to the pipeline’s current terminus at Dar es Salaam.  Orca has undertaken some preliminary engineering studies for this section.  Ultimately it is envisioned that the pipeline could be extended along the coast – north to Mombasa and south to Mtwara near the border with Mozambique near the Mnazi Bay gas discovery.

“The time is right to move on this expansion.” said David Lyons, Orca Exploration’s Chairman and CEO. “The markets for natural gas are opening up in East Africa and there is significant potential demand from the power sector. However infrastructure remains a bottleneck that urgently needs to be addressed. We are looking forward to working with partners to increase throughput and extend the pipeline network to reach new markets.  This will benefit not just Orca but also others who can then develop their gas discoveries in Tanzania.”

There has been significant interest in recent months by the larger energy companies in drilling offshore Tanzania and Orca has already announced that it intends to drill its Songo Songo West prospect in 2011. With a history of 16 years working in Tanzania, Orca is in a unique position to lead this infrastructure development. The Company is well established and has positive working relationships with the Government of Tanzania, Tanzanian Petroleum Development Corporation (TDPC) and the energy regulator, EWURA. 

Since the commencement of operations in 2004, Orca has successfully grown gas sales through the construction and operation of more than 50 kilometers of low pressure distribution pipeline at Dar es Salaam. Additional sales of natural gas are also being created by the installation of Orca’s CNG facilities.  Currently the installed infrastructure configuration that transports the Songo Songo gas to Dar es Salaam is at capacity at 90 MMcfd.  To address capacity constraints, the pipeline owner, Songas Limited, is planning to expand the existing system and increase the throughput to a peak of 140 MMcfd by January 2013.  The infrastructure expansion that Orca’s new division is planning would be required shortly afterwards.

Orca’s expanding cash flows from its operations in Tanzania and anticipated funding from the Company’s recently announced rights issue will help to finance the infrastructure project. This initiative will speed the monetization of existing reserves in the Songo Songo field and the potential resources in Songo Songo West.  Pierre Raillard, Orca’s in-country manager in Tanzania, will be responsible for implementing the project as Vice President of East Coast Transmission and Marketing. 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 additional new oil exploration opportunities in another proven hydrocarbon basin. Orca Exploration trades on the TSXV under the trading symbols ORC.B and ORC.A.

For further information please contact:

W. David Lyons, Chairman and CEO
Nigel A. Friend, CFO
+255 (0)22 2138737

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 disclosure contains certain forward-looking estimates 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 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.