Orca Energy Group Inc. Announces 2021 Year End Audited Financial Results

TORTOLA, BRITISH VIRGIN ISLANDS – April 20, 2022: Orca Energy Group Inc. (“Orca” or “the Company” and includes its subsidiaries and affiliates) (TSX-V: ORC.A, ORC.B) today announces its audited financial results for the year ended December 31, 2021. All dollar amounts are in United States dollars unless otherwise stated.

  • Revenue increased by 13% for Q4 2021 and by 10% for the year ended December 31, 2021 compared to the same prior year periods. The increase for Q4 2021 was primarily a result of the increased sales to the industrial sector. The increase for the year ended December 31, 2021 was a result of the increased sales to both the industrial sector and power sector. Gas deliveries increased by 13% for Q4 2021 and by 6% for the year ended December 31, 2021 compared to the same prior year periods. The Q4 2021 increase is due to the 20% increase in gas deliveries to the industrial sector and the 12% increase in gas deliveries to the power sector. The increase for the year ended December 31, 2021 reflects the increase in gas deliveries of 6% to both the power and the industrial sectors.
  • Net income attributable to shareholders decreased by 79% for Q4 2021 and by 41% for the year ended December 31, 2021 compared to the same prior year periods. The decreases are primarily related to decreases in the reversal of loss allowances related to the lower collection of arrears from Tanzania Electric Supply Company Limited (“TANESCO”).
  • Net cash flows from operating activities decreased by 4% for Q4 2021 and by 14% for the year ended December 31, 2021 compared to the same prior year periods, primarily reflecting the changes in net income and non-cash working capital.
  • Capital expenditures decreased by 23% for Q4 2021 and by 2% for the year ended December 31, 2021 compared to the same prior year periods. The capital expenditures in 2021 primarily relate to the continuation of the compression project and the commencement of the well workover program for the SS-3, SS-4 and SS-10 wells. The capital expenditures in 2020 primarily related to the flowline decoupling project and the compression project. The Company installed feed gas compression on the gas processing facility owned by Songas Limited (“Songas”) to allow production volumes through the Songas infrastructure to be sustained at approximately 102 MMcfd in the near term (3-5 years). The drilling rig was released on April 8, 2022 having completed the planned three well (SS-3, SS-4 and SS-10) workover program. The $31.6 million program included the reactivation of the SS-3 and SS-4 wells along with the installation of corrosion resistant production tubing on all three of the wells. The SS-3 well was placed on production on February 15, 2022 and the SS-10 well was returned to production on April 18, 2022 after a 36 day shut in period to accommodate the installation of down hole sand mitigation equipment and replacement production tubing. The SS-4 well remains shut in following the drilling and completion of a planned side-track wellbore to replace the original wellbore, which had been compromised by excessive sand production. Currently the SS-4 well is unable to flow naturally due to suspected excessive liquid loading associated with extensive circulating time while waiting on necessary services and equipment. The Company is sourcing a coiled tubing nitrogen unit to safely unload the excess liquid, potentially allowing the well to flow naturally. Subject to logistics and transportation from Poland, it is expected the coiled tubing equipment will be on location in Q3 2022. Together with compression facilities, and subject to demand volumes and associated natural reservoir pressure decline, the current well stock now provides the opportunity to initially increase production potential to within a range of 150 MMcfd to 160 MMcfd by also producing through the adjacent National Natural Gas Infrastructure (“NNGI”) facilities on Songo Songo Island. If successful in lifting fluids from the SS-4 well, production potential will further increase.
  • The Company exited the period in a strong financial position with $41.8 million in working capital (December 31, 2020: $74.2 million), cash and cash equivalents of $73.0 million (December 31, 2020: $104.2 million) and long-term debt of $49.6 million (December 31, 2020: $54.2 million). The decrease in working capital, cash and cash equivalents was primarily related to the substantial issuer bid completed in January 2021 (“2021 SIB”) and the reclassification of $5.0 million of long-term debt into current liabilities as it becomes due in 2022.
  • As at December 31, 2021 the current receivable from TANESCO was $2.0 million (December 31, 2020: $ nil). TANESCO’s long-term trade receivable as at December 31, 2021 was $26.5 million with a provision of $26.5 million compared to $27.6 million (provision of $27.6 million) as at December 31, 2020. Subsequent to December 31, 2021 TANESCO paid the Company $8.2 million and the Company invoiced TANESCO $5.5 million for 2022 gas deliveries.
  • On February 23, 2021, June 4, 2021, September 9, 2021 and November 19, 2021 the Company declared dividends of CDN$0.10 per share on each of its Class A common voting shares (“Class A Shares”) and Class B subordinate voting shares (“Class B Shares”) for a total of $6.4 million to the holders of record as of March 31, 2021, June 30, 2021, September 29, 2021 and December 31, 2021 (paid on April 15, 2021, July 15, 2021, October 15, 2021 and January 14, 2022, respectively).
  • On January 22, 2021 the Company announced the final results of the 2021 SIB whereby the Company repurchased and cancelled 6,153,846 Class B Shares at a price of CDN$6.50 per Class B Share representing an aggregate purchase price of CDN$40.0 million and 25.2% of the total number of the Company’s issued and outstanding Class B Shares and 23.5% of the total number of the Company’s issued and outstanding shares.
  • On June 21, 2021 the Company commenced a normal course issuer bid (“NCIB”) to purchase Class B Shares through the facilities of the TSXV and alternative trading systems in Canada. Purchases pursuant to the NCIB will not exceed 500,000 Class B Shares, representing approximately 2.74% of the total outstanding Class B Shares. The NCIB will be in effect until June 21, 2022 (or until such time as the maximum number of Class B Shares have been purchased). To date, 41,200 Class B Shares have been purchased and canceled by the Company pursuant to the NCIB.
  • On February 24, 2022 the Company declared a dividend of CDN$0.10 per share on each of its Class A Shares and Class B Shares for a total of $1.6 million to the holders of record as of March 31, 2022 paid on April 15, 2022.
  • 2022 production started strongly, with gross sales of conventional natural gas, which will be classified as Additional Gas, as defined in the PSA (as defined herein) (“gas sales”) averaging 74 MMcfd in January.
  • The Company forecasts average gross gas sales of 70-76 MMcfd during 2022 representing a 10 MMcfd, or approximately 16%, increase to the prior forecasts of 60-66 MMcfd. The increased gas demand forecast is primarily driven by encouraging discussions with the Ministry of Energy (“MoE”), Tanzanian Petroleum Development Corporation (“TPDC”) and TANESCO to increase gas supply to new power generation facilities expected to be commissioned in 2022.

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Orca Energy Group Inc. Announce Independent Reserve Evaluation for Year End 2021

TORTOLA, BRITISH VIRGIN ISLANDS – February 28, 2022 – Orca Energy Group Inc. (“Orca” or the “Company” and includes its subsidiaries and affiliates) (TSX-V: ORC.A, ORC.B) announces the approval of its Independent Reserves Evaluation as at December 31, 2021. All currency amounts in this news release are in United States Dollars ($) unless otherwise stated.

INDEPENDENT RESERVES EVALUATION

The Company’s conventional natural gas reserves as at December 31, 2021 for the period to the end of the primary (25 year) term of the production sharing agreement (the “Songo Songo PSA“) with the Tanzanian Petroleum Development Corporation (the “TPDC“) have been evaluated by independent petroleum engineering consultants McDaniel & Associates Consultants Ltd. (“McDaniel“) in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook (“COGE Handbook“) and National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101“). The Songo Songo PSA expires upon the expiry of TPDC’s Songo Songo licence in respect of the Songo Songo gas field (the “Songo Songo Licence“) in October 2026. The preparation date of the independent reserves evaluation prepared by McDaniel is February 24, 2022 and the effective date of the evaluation is December 31, 2021 (the “McDaniel Report“).

All the Company’s reserves are located in Tanzania. Reserves included herein are stated on a Company gross reserves basis unless noted otherwise. Company gross reserves are the total of the Company’s working interest share in reserves before deduction of royalties owned by others and without including any royalty interests of the Company, and are based on the Company’s 92.07 percent ownership interest in the reserves following the transaction with Swala Oil & Gas (Tanzania) plc (“Swala“) described in Note 3 to the tables below.

The Company’s Board of Directors has reviewed and approved the McDaniel Report. Additional reserves information required under NI 51-101 is included in Orca’s reports relating to reserves data and other oil and gas information under NI 51-101, which will befiled on its profile on SEDAR at www.sedar.com. The following discussion is subject to a number of cautionary statements, assumptions, contingencies and risks as set forth in this news release.

HIGHLIGHTS

  • Total Proved (“1P”) Gross Company conventional natural gas reserves at year ended December 31, 2021, were 160 billion standard cubic feet (“Bcf”). After adjustment for the Company’s share of gas produced in 2021, this represents an 11 %, or 21 Bcf decrease from the year end 2020.
  • Total Proved plus Probable (“2P”) Gross Company conventional natural gas reserves at year ended December 31, 2021, were 188 Bcf. After adjustment for the Company’s share of gas produced in 2021, this represents a 9%, or 22 Bcf decrease from the year end 2020.
  • Net Present Value of 1P future net revenue discounted at 10% was $177.8 million at year end 2021, compared to $216.4 million at year end 2020, representing an 18% decrease.
  • Net Present Value of 2P future net revenue discounted at 10% was $209.9 million at year end 2021, compared to $241.3 million at year end 2020, representing a 13% decrease.
  • The reduction in Gross Company 1P reserves from year end 2020 to year end 2021 are attributed to lower forecasted Company conventional natural gas sales, which will be classified as Additional Gas, as defined in the Songo Songo PSA (“gas sales”) to the end of the current Songo Songo Licence term (October 2026). While actual gas demand is forecasted to increase, the startup of several new gas demand projects shifted during the past year, in part due to COVID-19 pandemic related impacts on investment, construction and supply chains.
  • The reduction in net present values of future net revenue was primarily attributed to lower reserves at year end 2021 associated with the reduced number of years remaining on the Songo Songo Licence (4.8 years at YE 2021 versus 5.8 years at YE 2020, or a 17% reduction in producing days to the end of the Songo Songo Licence term).

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Operational Update

TORTOLA, BRITISH VIRGIN ISLANDS – February 23, 2022: Orca Energy Group Inc. (“Orca” or the “Company” and includes PanAfrican Energy Tanzania Limited (“PAET”) and its other subsidiaries, and affiliates) (TSX-V: ORC.A, ORC.B) today announces an operational update.  All amounts are in United States dollars (“$”) unless otherwise stated. Jay Lyons, Chief Executive Officer, commented:  “I am pleased to report that Orca continues to make strong operational progress in Tanzania, as seen with the successful connection of our compression system to the Songo Songo gas plant. Our compression system has the potential to play an important role in assisting Tanzania’s burgeoning industrial and commercial sectors. This $42 million project which was three plus years in the planning and execution, ensures that Tanzania continues to benefit from a reliable supply of natural gas, which aligns Orca and PAET with the Government of Tanzania’s plans to increase access to electricity, enabling the country to continue on its economic growth trajectory.  We are also progressing our other operational work programs, including a $22 million multi-well workover program and a $20 million 3D seismic acquisition campaign that is expected to occur in Q3 2022, all of which will help drive increased reliable gas volumes to Tanzania and deliver value for our wider stakeholders. We look forward to updating the market further on these initiatives and others as they progress, along with our 2021 Results in April 2022.”

OPERATIONAL

Compression

  • Installation of inlet compression at Orca  operated Songo Songo (“SS”) gas plant nearing completion following the successful connection of new compressors during a scheduled 10 day gas plant shut down, which was completed two days early (February 1 to February 8, 2022).
  • With the support and coordination of the Minister of Energy, the Tanzania Petroleum Development Corporation (“TPDC”) and the Tanzania Electric Supply Company (“TANESCO”), the 10 day shutdown period was scheduled to occur from February 1 to February 10, 2022, in order to minimize customer disruptions while upgrading the SS gas plant to provide increased system gas deliverability to meet growing demand.
  • In cooperation with TPDC the Company successfully increased SS gas supply to the TPDC operated National Natural Gas Infrastructure (“NNGI”) gas plant from ~38 MMcfd to ~92 MMcfd during the SS gas plant shut down, minimizing downstream impact by ensuring TANESCO could minimize disruptions to power generation.
  • Following the planned shutdown, SS field production has been restored to the pre-shut down levels.
  • Targeting the startup of the inlet compression project one month early in mid-March 2022, following commissioning and testing procedures.
  • Concurrently, the Company completed the annual SS gas plant maintenance program during the planned shutdown period, which should preclude any additional planned plant shutdowns for maintenance in 2022.

Workover Program

  • The well work over program is progressing with the work on the SS-3 and SS-4 wells completed.  The SS-3 well was placed on production on February 15, 2022, at an initial production rate of 15 MMcfd.  It is expected that the SS-4 well will be placed on production by month end following the rig move to the SS-10 well and reconnection of the SS-4 well to the SS gas plant.
  • The three well program included reactivation of the SS-3 and SS-4 wells to increase production and the replacement of production tubing strings in the three wells with new chrome alloy tubing to mitigate internal corrosion in accordance with the Company’s integrity management system.

Seismic Program

  • Strong progress made with the 2022 Songo Songo 3D seismic acquisition program budgeted at $20 million, with Orca targeting a Q3 2022 acquisition period. As previously stated, the 3D seismic program is required to de-risk both the future development drilling in the SS gas field and potential exploration drilling of prospective resources.

Production

  • Additional Gas, as defined in the PSA (as defined herein) (“gas sales”) averaged ~71 MMcfd during Q4 2021 which increased average gas sales to 61 MMcfd for 2021, representing a 5.9% increase from 2020.
  • 2022 production started strongly, with gross gas sales averaging ~74MMcfd in January.
  • Orca forecasts average gross gas sales of 70-76 MMcfd during 2022 representing a 10 MMcfd (~16%) increase to the Company’s prior forecasts of 60-66 MMcfd.  The increased gas demand forecast is primarily driven by encouraging discussions with the Ministry of Energy, TPDC and TANESCO to increase gas supply to new power generation facilities expected to be commissioned in 2022.

FINANCIAL

  • Orca continues to benefit from a robust balance sheet, with cash and cash equivalents of $73 million (unaudited) and long-term loan of $44.6 million (unaudited) as at December 31, 2021.
  • In accordance with the Company’s dividend policy, Orca anticipates maintaining its quarterly dividend.
  • Orca paid total dividends on its Class A Common Voting Shares and Class B Subordinate Voting Shares of $6.4 million during 2021.
  • In 2021, Orca purchased shares for $32.0 million pursuant to the Company’s substantial issuer bid (completed in January 2021) and normal course issuer bid (commenced in June 2021).

Orca Energy Group Inc.

Orca Energy Group Inc. is an international public company engaged in natural gas exploration, development and supply in Tanzania through its subsidiary PAET. Orca trades on the TSX Venture Exchange under the trading symbols ORC.B and ORC.A. *The principal asset of Orca is its indirect interest in the Production Sharing Agreement (“PSA”) with TPDC and the Government of Tanzania in the United Republic of Tanzania. This PSA covers the production and marketing of certain gas from the SS licence offshore Tanzania. The PSA defines the gas produced from the SS gas field as “Protected Gas” and “Additional Gas”. The Protected Gas is owned by TPDC and is sold under a 20-year gas agreement (until July 31, 2024) to Songas Limited (“Songas“) and Tanzania Portland Cement PLC. Songas is the owner of the infrastructure that enables the gas to be processed and delivered to Dar es Salaam, which includes a gas processing plant on SS Island. Additional Gas is all gas that is produced from the SS gas field in excess of Protected Gas. For further information please contact: Jay Lyons Chief Executive Officer +44-7798-502316 jlyons@orcaenergygroup.com Lisa Mitchell Chief Financial Officer +44-7808-639958 lmitchell@orcaenergygroup.com For media enquiries please contact: Mark Antelme Jimmy Lea +44 (0)20 8434 2754 orca@celicourt.uk 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 statements or information (collectively, “forward-looking statements”) within the meaning of applicable securities legislation. All statements, other than statements of historical fact included in this news release, which address activities, events or developments that Orca expects or anticipates to occur in the future, are forward-looking statements. Forward-looking statements often contain terms such as may, will, should, anticipate, expect, continue, estimate, believe, project, forecast, plan, intend, target, outlook, focus, could and similar words suggesting future outcomes or statements regarding an outlook. More particularly, this news release contains, without limitation, forward-looking statements pertaining to the following: the Company’s ability to maintain or increase the production capacity of the SS gas field; the Company’s expectations regarding timing for the completion of installation of the well workover program and inlet compression project; the Company’s ability to play an important role in assisting Tanzania’s growing industrial and commercial sectors as a result of the inlet compression project; the Company’s expectations that no additional planned shutdowns for maintenance will be required in 2022; the Company’s expectations for when the SS-4 well will be placed on production; the data acquired from the 3D seismic program and the benefit obtained therefrom; the Company’s expectations regarding timing and expenditures required to commence the 3D seismic program; Orca’s average gas production forecasts; and Orca’s expectations regarding maintaining its quarterly dividend. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Although management believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, economic, operational, competitive, political and social uncertainties and contingencies. These forward-looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company’s control, and many factors could cause the Company’s actual results to differ materially from those expressed or implied in any forward-looking statements made by the Company, including, but not limited to, reduced global economic activity as a result of the COVID-19 pandemic, including lower demand for natural gas and a reduction in the price of natural gas; natural reservoir pressure declines and associated well performance; the potential impact of the COVID-19 pandemic on the health of the Company’s employees, contractors, suppliers, customers and other partners and the risk that the Company and/or such persons are or may be restricted or prevented (as a result of quarantines, closures or otherwise) from conducting business activities for undetermined periods of time; the impact of actions taken by governments to reduce the spread of COVID-19, including declaring states of emergency, imposing quarantines, border closures, temporary business closures for companies and industries deemed non-essential, significant travel restrictions and mandated social distancing, and the effect on the Company’s operations, access to customers and suppliers, availability of employees, and other resources; risk that contract counterparties are unable to perform contractual obligations; the potential negative effect on the Company’s rights under the PSA and other agreements relating to its business in Tanzania as a result of the Petroleum Act, passed in 2015 (the “Act“), and other recently enacted and future legislation, as well as the risk that such legislation will create additional costs and time connected with the Company’s business in Tanzania; risks regarding the uncertainty around evolution of Tanzanian legislation; the impact of general economic conditions in the areas in which the Company operates; civil unrest; the susceptibility of the areas in which the Company operates to outbreaks of disease; industry conditions; lack of availability of qualified personnel, contractors or management; fluctuations in commodity prices, foreign exchange rates and/or interest rates; stock market volatility; competition for, among other things, capital, drilling equipment and skilled personnel; failure to obtain required equipment for drilling; delays in drilling plans; failure to obtain expected results from drilling of wells; changes in laws and regulations including the adoption of new environmental laws and regulations; impact of new local content regulations and changes in how they are interpreted and enforced; imprecision in reserve estimates; the production and growth potential of the Company’s assets; obtaining required approvals from regulatory authorities; risks associated with negotiating with foreign governments; failure to install compression on the SS gas plant or complete the well workover program on the timeline anticipated; failure to increase production volumes and capabilities through the SS gas plant; risk that the 3D seismic program is delayed or more expensive than anticipated; risk that the results of the 3D seismic program are not as lucrative or instructive as anticipated; inability to meet production targets; risks that additional planned shutdowns of the SS gas plant for maintenance will be required in 2022; inability to place the SS-4 well on production on the timeline anticipated; and unanticipated changes to legislation and the effect on the Company’s operations. In addition, there are risks and uncertainties associated with oil and gas operations. Therefore the Company’s actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by these forward-looking statements will transpire or occur, or if any of them do so, what benefits the Company will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. Future dividend payments, if any, and the level thereof is uncertain. The Company’s dividend policy and any decision to pay further dividends, will be subject to the discretion of the Board of Directors and may depend on a variety of factors, including, without limitation the Company’s business performance, financial condition, financial requirements, growth plans, expected capital requirements and other conditions existing at such future time including, without limitation, satisfaction of the solvency tests imposed on the Company under applicable corporate law. The actual amount, the declaration date, the record date and the payment date of any dividend are subject to the discretion of the Board of Directors. There can be no assurance that dividends will be paid at the intended rate or at any rate in the future. Such forward-looking statements are based on certain assumptions made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors the Company believes are appropriate in the circumstances, including, but not limited to, that the Company is able to complete the installation of compression on the SS gas plant and the well workover program on the timeline and at the cost anticipated; that the Company is able to  increase production volumes and capabilities through the SS gas plant; no additional planned shutdowns for maintenance will be required in 2022; the SS-4 well will be placed on production on the timeline anticipated; the ability of the Company to increase production as required to meet forecasted demand; the ability of the Company to complete developments and increase its production capacity; the actual costs to complete the Company’s workover program are in line with estimates; reservoir pressure declines, and demand for natural gas are in line with the Company’s estimates; the Company is able to negotiate an extension of the SS license; the impact of the COVID-19 pandemic on the demand for and price of natural gas, volatility in financial markets, disruptions to global supply chains and the Company’s business, operations, access to customers and suppliers, availability of employees to carry out day-to-day operations, and other resources; infrastructure capacity; commodity prices will not deteriorate significantly; the ability of the Company to obtain equipment and services in a timely manner to carry out exploration, development and exploitation activities; availability of skilled labour; timing and amount of capital expenditures; uninterrupted access to infrastructure; the impact of increasing competition; conditions in general economic and financial markets; receipt of government and other regulatory approvals; effects of regulation by governmental agencies; current or, where applicable, proposed industry conditions, laws and regulations will continue in effect or as anticipated as described herein; and other matters. The forward-looking statements contained in this news release are made as of the date hereof and the Company 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. This news release contains information that may be considered a financial outlook under applicable securities laws about the Company’s anticipated capital expenditures for 2022. Such financial information has been prepared by management to provide an outlook of the Company’s activities and may not be appropriate for other purposes. This information has been prepared based on a number of assumptions, risk factors, limitations and qualifications including those discussed in this news release. The actual results of operations of the Company and the resulting expenditures may vary from the amounts set forth herein, and such variations may be material. The Company and management believe that the financial outlook has been prepared on a reasonable basis, reflecting management’s best estimates and judgments. The financial outlook contained in this news release was made as of the date of this news release and the Company disclaims any intent or obligation to update publicly the news release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law.

Other Advisories

Certain financial and operating results included in this news release, including cash and cash equivalents and long-term loan as at December 31, 2021 are based on unaudited estimated results. These estimated results are subject to change upon completion of the Company’s audited financial statements for the year ended December 31, 2021, and any changes could be material. Orca anticipates filing its audited financial statements and related management’s discussion and analysis for the year ended December 31, 2021 on SEDAR on or before May 2, 2022. References in this news release to initial production results are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which the SS-3 well will continue production and decline thereafter and are not indicative of long term performance or of ultimate recovery. Readers are cautioned not to place reliance on such rates in calculating the aggregate production for Orca or any of its wells. A pressure transient analysis or well-test interpretation has not been carried out in respect of the SS-3 well. Accordingly, Orca cautions that the production results for the SS-3 well should be considered to be preliminary. Click here to download the full report

Orca Announces Quarterly Dividend

TORTOLA, British Virgin Islands – February 24, 2022:  Orca Energy Group Inc. (“Orca” or the “Company”) (TSX-V: ORC.A, ORC.B) today announced that its Board of Directors has declared a quarterly cash dividend of $0.10 (Cdn) per Class A Common Voting Share (“Class A Shares“) of the Company and $0.10 (Cdn) per Class B Subordinate Voting Share (“Class B Shares“) of the Company. The dividend will be payable on April 15, 2022 to holders of Class A Shares and Class B Shares of record on March 31, 2022.

About Orca Energy Group Inc.

Orca is an international public company engaged in natural gas exploration, development and supply in Tanzania through its subsidiary PanAfrican Energy Tanzania Limited. Orca trades on the TSX Venture Exchange under the trading symbols ORC.A and ORC.B.

For further information please contact:
Jay Lyons
Chief Executive Officer
jlyons@orcaenergygroup.com
+44-7798-502316

Lisa Mitchell
Chief Financial Officer
lmitchell@orcaenergygroup.com
+44-7808-639958

For media enquiries:
Celicourt (PR)
Mark Antelme
Jimmy Lea
Orca@celicourt.uk
+44-20 8434 2643

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.

Operations Update & Guidance for 2022

TORTOLA, BRITISH VIRGIN ISLANDS – December 2, 2021: Orca Energy Group Inc. (“Orca” or the “Company” and includes its subsidiaries and affiliates) (TSX-V: ORC.A, ORC.B) today announces an operations update and guidance for 2022.  All amounts are in United States dollars (“$”) unless otherwise stated.

Jay Lyons, Chief Executive Officer, commented:

“Despite challenges associated with global supply chains and other COVID-19 related issues, we are very pleased to announce good progress on our 2021 work programs, a significant $50 million capital program and further guidance for 2022.   These plans are consistent with Orca’s 20 year track record of proactive investment and field development to ensure sustainable gas supply to the United Republic of Tanzania. Subject to Government approvals, the proposed plan will enable the Company to not only maintain, but potentially increase its production in the near to medium term to align with the country’s energy needs and industrialization objectives while maintaining returns to our shareholders.”   

Operations Update

Well Workover Program:  Following acceptance testing, the Exalo S.A drilling rig is onsite Songo Songo (“SS“) Island and remediation work has commenced on SS-3, the first of a planned three well onshore workover program.   The $20.5 million program includes the reactivation/recompletion of the SS-3 and SS-4 wells to access incremental gas reserves in the SS east pool and provide additional gas deliverability to the SS gas plant. Together with the SS-3 and SS-4 wells, the SS-10 well, which remains in production, will be worked over and completed with a new corrosion resistant chrome alloy production tubing string in accordance with the Company’s ongoing corrosion monitoring and infrastructure integrity management system.  With the completion of the workover program in Q1 2022, all the producing gas wells in the SS gas field will be  equipped with the corrosion resistant tubing strings to ensure continued reliable gas production to the Tanzanian power sector and industrial customers in the Dar es Saleem region. 

Inlet Compression Project: Initiated in 2019, the $41.5 million inlet compression project is nearing completion, with a potential startup ahead of the contractual April 2022 target, following tie in to the SS gas plant and commissioning planned for early 2022. The inlet compression will allow production volumes to be sustained through the Songas Limited (“Songas”) infrastructure at approximately 102 million standard cubic feet per day (“MMcfd”) in the near term (3-5 years).

Subject to demand volumes, natural reservoir pressure declines and the associated well performance, the $63 million invested in workovers and inlet compression facilities at the Songas infrastructure when combined with gas supplied to the National Natural Gas Infrastructure (“NNGI”) will provide the opportunity to initially increase total production capacity from the SS gas field in early 2022. 

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Orca Announces Quarterly Dividend

TORTOLA, British Virgin Islands – November 19, 2021:  Orca Energy Group Inc. (“Orca” or the “Company”) (TSX-V: ORC.A, ORC.B) today announced that its Board of Directors has declared a quarterly cash dividend of $0.10 (Cdn) per Class A Common Voting Share (“Class A Shares“) of the Company and $0.10 (Cdn) per Class B Subordinate Voting Share (“Class B Shares“) of the Company. The dividend will be payable on January 14, 2022 to holders of Class A Shares and Class B Shares of record on December 31, 2021.

About Orca Energy Group Inc.

Orca is an international public company engaged in natural gas exploration, development and supply in Tanzania through its subsidiary PanAfrican Energy Tanzania Limited. Orca trades on the TSX Venture Exchange under the trading symbols ORC.A and ORC.B.

For further information please contact:

Jay Lyons
Chief Executive Officer
+44-7798-502316           
jlyons@orcaenergygroup.com

Lisa Mitchell
Chief Financial Officer
+44-7808-639958
lmitchell@orcaenergygroup.com

For media enquiries:

Celicourt (PR)
Mark Antelme
Jimmy Lea
Orca@celicourt.uk
+44-20 8434 2643

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.

Orca Energy Group Inc. Announces Completion of Q3 2021 Interim Filings

TORTOLA, BRITISH VIRGIN ISLANDS – November 17, 2021: Orca Energy Group Inc. (“Orca” or the “Company” and includes its subsidiaries and affiliates) (TSX-V: ORC.A, ORC.B) today announces that it has filed its condensed consolidated interim financial statements and management’s discussion and analysis for the three and nine month periods ended September 30, 2021 with the Canadian securities regulatory authorities. All amounts are in United States dollars (“$”) unless otherwise stated.

Jay Lyons, Chief Executive Officer, commented:

“We are very pleased with Orca’s performance to date in 2021. Our production and revenues remained strong during the period and we continue to hit the targets we have set for ourselves. Operationally, Orca remains on track with the installation of compression equipment, designed to ensure the Company can maintain production volumes at 102 MMcfd, with the potential to increase by a further 70 MMcfd.  Additionally, the well remediation is in process and is expected to be completed in Q1 2022. With a tight control on costs, we maintain a strong balance sheet, enabling us to not only continue investing in the creation of further value from the world class Songo Songo gas field, but also making appropriate returns to our shareholders. 

On behalf of the Board, I would like to thank Blaine Karst for his significant contribution to the Company over the years.  We wish him the very best for his retirement.  We are very pleased to extend a warm welcome to Lisa Mitchell as our new CFO.  Lisa brings a wealth of experience in senior finance and leadership roles within the African energy sector. We will keep our stakeholders appraised of our progress as we move forward in the last quarter of 2021.” 

Highlights

  • Revenue increased by 7% for Q3 2021 and by 9% for the nine months ended September 30, 2021 compared to the same prior year periods. The increase for Q3 2021 was primarily a result of the increased sales to the power sector. The increase for the nine months ended September 30, 2021 was a result of the increased sales to both the industrial sector and power sector. Gas deliveries increased by 6% for Q3 2021 and by 3% for the nine months ended September 30, 2021 compared to the same prior year periods. The Q3 2021 increase is due to the 11% increase in gas deliveries to the power sector being partially offset by the decrease of 13% in gas deliveries to the industrial sector as a result of an increase in downtime due to unplanned maintenance at a cement plant. The increase for the nine months ended September 30, 2021 reflects the increase in gas deliveries of 4% to the power sector.
  • Net income attributable to shareholders increased by 412% for Q3 2021 and decreased by 27% for the nine months ended September 30, 2021 compared to the same prior year periods. The increase for Q3 2021 was a combination of the increase in revenue, a decrease in general and administrative expenses and a reversal of loss allowances for receivables in Q3 2021 compared to a loss allowance for receivables in Q3 2020 as a result of the Company fully providing for a receivable from the Tanzanian Revenue Authority (“TRA”) who issued an Agency Notice for $5.3 million obligating the commercial bank of PanAfrican Energy Tanzania Limited’s (“PAET”), the Company’s subsidiary operating in Tanzania, to release funds in favour of the TRA.  The decrease for the nine months ended September 30, 2021 compared to the same prior year period is primarily related to the decrease in the reversal of loss allowances related to the lower collection of arrears from the Tanzanian Electric Supply Company Limited (“TANESCO”) despite higher revenue.
  • Net cash flows from operating activities for Q3 2021 increased by 63% and decreased by 1% for the nine months ended September 30, 2021 compared to the same prior year periods primarily reflecting the changes in net income and non-cash working capital.
  • Adjusted funds flow from operations increased by 4% for Q3 2021 and by 20% for the nine months ended September 30, 2021 compared to the same prior year periods. The increases were primarily a result of the increase in revenue and the reduction in general and administrative expenses.
  • Capital expenditures decreased by 61% for Q3 2021 and increased by 29% for the nine months ended September 30, 2021 compared to the same prior year periods. The capital expenditures in 2021 primarily relate to the installation of compression facilities and the commencement of the well workover program for the SS-3, SS-4 and SS-10 wells. The capital expenditures in 2020 primarily related to the flowline decoupling project and the compression project. The Company is installing inlet compression to allow production volumes to be sustained at approximately 102 million standard cubic feet per day (“MMcfd”) in the near term (3-5 years), through the Songas Limited (“Songas”) infrastructure. The workover program is scheduled to be completed in Q1 2022 at a gross cost of $21.4 million of which $3.9 million has been incurred to date. The rig is currently on site and under preparation to commence the workover on well SS-3. Subject to demand volumes and associated natural reservoir pressure declines, the workovers and compression facilities provide the opportunity to initially increase production potential to a total of 172 MMcfd by also utilizing the National Natural Gas Infrastructure (“NNGI”). The original value of the contract for compression was $38.0 million, however price variations due to increased costs of sea freight, a requirement to increase on site power generation capacity, and design changes to cable routing for the project have seen the total project costs increase to $41.7 million. Of this, $39.2 million has already been incurred and following installation and testing the balance of $2.5 million is forecast to be paid in 2022. The project is currently on schedule for completion in Q2 2022.
  • The Company exited the period in a strong financial position with $46.5 million in working capital (December 31, 2020: $74.2 million), cash and cash equivalents of $71.4 million (December 31, 2020: $104.2 million) and long-term debt of $49.6 million (December 31, 2020: $54.2 million). The decrease in working capital, cash and cash equivalents was primarily related to the substantial issuer bid completed in January 2021 (“2021 SIB”) and the reclassification of $5.0 million of long-term debt into current liabilities as it becomes due in April 2022.
  • On September 9, 2021 the Company declared a dividend of CDN$0.10 per share on each of its Class A common voting shares (“Class A Shares”) and Class B subordinate voting shares (“Class B Shares”) for a total of $1.6 million to the holders of record as of September 29, 2021 which was paid on October 15, 2021.
  • On June 21, 2021 the Company commenced a normal course issuer bid (“NCIB”) to purchase Class B Shares through the facilities of the TSXV and alternative trading systems in Canada. To date, 9,400 Class B Shares have been purchased and cancelled by the Company pursuant to the NCIB.

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Orca Announces Appointment of New Chief Financial Officer

TORTOLA, BRITISH VIRGIN ISLANDS – October 18, 2021: Orca Energy Group Inc. (“Orca” or “the Company” and includes its subsidiaries and affiliates) (TSX-V: ORC.A, ORC.B) is pleased to announce that  Lisa Mitchell will join the Company as Chief Financial Officer (“CFO”), effective November 1, 2021. Lisa will replace Blaine Karst, who will be retiring. Blaine has committed to stay on through April, 2022 in an advisory capacity to ensure a smooth transition.

Lisa was most recently the CFO and Executive Director of San Leon Energy plc (AIM: LSE), a Nigeria focused oil and gas company listed in London, and before that was CFO and Executive Director of Lekoil Limited (AIM: LEK),  an Africa focused oil and gas company with interests in Nigeria. Lisa has also held senior roles at Ophir Energy plc (LSE: OPHR), a former FTSE 250 energy company, CSL Limited (ASX top 50) and Mobil Oil Australia.

Lisa is a FCPA (Australia) and holds a Bachelor of Economics (major in Accounting) from La Trobe University, Melbourne and a Graduate Diploma in Applied Corporate Governance from the Governance Institute of Australia.

Jay Lyons, Chief Executive Officer, commented:  “We are excited to welcome Lisa Mitchell to Orca, as she brings a wealth of experience in the international financial and oil and gas markets and has worked extensively with companies that have producing assets in Africa. Her prior experience will be a great asset to Orca. We would also like to thank Blaine Karst for the significant contribution he has made to Orca over the past six years and we are also pleased that he has agreed to stay on to ensure an orderly handover.”

Lisa’s appointment is subject to the approval of the TSX Venture Exchange.

Orca Energy Group Inc.

Orca Energy Group Inc. is an international public company engaged in natural gas exploration, development and supply in Tanzania through its subsidiary PanAfrican Energy Tanzania Limited. Orca trades on the TSX Venture Exchange under the trading symbols ORC.B and ORC.A.

For further information please contact:

Jay Lyons
jlyons@orcaenergygroup.com

Blaine Karst
bkarst@orcaenergygroup.com

For media enquiries:
Celicourt (PR)
Mark Antelme
Jimmy Lea

Orca@celicourt.uk

+44-20 8434 2643

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.

Orca Announces Quarterly Dividend

TORTOLA, British Virgin Islands – September 9, 2021:  Orca Energy Group Inc. (“Orca” or the “Company”) (TSX-V: ORC.A, ORC.B) today announced that its Board of Directors has declared a quarterly cash dividend of $0.10 (Cdn) per Class A Common Voting Share (“Class A Shares“) of the Company and $0.10 (Cdn) per Class B Subordinate Voting Share (“Class B Shares“) of the Company. The dividend will be payable on October 15, 2021 to holders of Class A Shares and Class B Shares of record on September 29, 2021.

About Orca Energy Group Inc.

Orca is an international public company engaged in natural gas exploration, development and supply in Tanzania through its subsidiary PanAfrican Energy Tanzania Limited. Orca trades on the TSX Venture Exchange under the trading symbols ORC.A and ORC.B.

For further information please contact:

Jay Lyons
jlyons@orcaenergygroup.com

Blaine Karst
bkarst@orcaenergygroup.com

For media enquiries:
Celicourt (PR)
Mark Antelme
Jimmy Lea

Orca@celicourt.uk

+44-20 8434 2643

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.

Orca Energy Group Inc. Announces Completion of its Q2 2021 Interim Filings

TORTOLA, BRITISH VIRGIN ISLANDS – August 17, 2021: Orca Energy Group Inc. (“Orca” or the “Company” and includes its subsidiaries and affiliates) (TSX-V: ORC.A, ORC.B) today announces that it has filed its condensed consolidated interim financial statements and management’s discussion and analysis for the three and six month periods ended June 30, 2021 with the Canadian securities regulatory authorities. All amounts are in United States dollars (“$”) unless otherwise stated.

  • Revenue increased by 17% for Q2 2021 and by 11% for the six months ended June 30, 2021 compared to the same prior year periods. The increase was primarily a result of the increased revenue from industrial customers and the increase in capital expenditures which caused the reduction of the Tanzanian Petroleum Development Corporation (“TPDC”) share of revenue. Gas deliveries decreased by 1% for Q2 2021 and increased by 2% for the six months ended June 30, 2021 compared to the same prior year periods. The Q2 2021 decrease is due to the 2% decrease in gas deliveries for power partially offset by the increase of 3% in gas deliveries to industrial customers as a result of expansion of the Company’s customer base. The increase of 2% for the six months ended June 30, 2021 reflects the increase in gas deliveries of 4% in Q1 2021 compared to Q1 2020.
  • Net income attributable to shareholders decreased by 48% for Q2 2021 and by 62% for the six months ended June 30, 2021 compared to the same prior year periods primarily a result of the decrease in the reversal of loss allowances related to the lower collection of arrears from Tanzanian Electric Supply Company Limited (“TANESCO”) in Q2 2021 and the six months ended June 30, 2021 compared to the same periods in 2020.
  • Net cash flows from operating activities for Q2 2021 decreased by 24% and by 34% for the six months ended June 30, 2021 compared to the same prior year periods. The decreases were primarily a result of the lower collection of TANESCO arrears.
  • Adjusted funds flow from operations for Q2 2021 increased by 54% and by 33% for the six months ended June 30, 2021 compared to the same prior year periods. The increases were primarily a result of the increase in revenue.
  • Capital expenditures increased by 912% for Q2 2021 and by 596% for the six months ended June 30, 2021 compared to the same prior year periods. The capital expenditures in the first six months of 2021 primarily relate to the installation of compression facilities. The capital expenditures in the first six months of 2020 primarily related to the flowline decoupling project. The Company is currently installing compression to allow production volumes to be sustained at approximately 102 million standard cubic feet per day (“MMcfd”) through the Songas Infrastructure. This provides the possibility to expand production capabilities to 172 MMcfd by also utilizing the National Natural Gas Infrastructure (“NNGI”). The original value of the contract for compression was $38.0 million, however price variations due to increased costs of sea freight, a requirement to increase on site power generation capacity, and design changes to cable routing for the project have seen the total project costs increase to $41.3 million, of which $36.2 million has already been incurred with forecast expenditure of $5.1 million in 2022 following installation and testing. The project is currently on schedule for completion in Q2 2022.
  • The Company exited the period in a strong financial position with $39.5 million in working capital (December 31, 2020: $74.2 million), cash and cash equivalents of $63.3 million (December 31, 2020: $104.2 million) and long-term debt of $49.4 million (December 31, 2020: $54.2 million). The decrease in working capital, cash and cash equivalents was primarily related to the substantial issuer bid completed in January 2021 and the reclassification of $5.0 million of long-term debt into current liabilities as it becomes due in April 2022.
  • As at June 30, 2021 the current receivable from TANESCO was $ nil (December 31, 2020: $ nil). TANESCO’s long-term trade receivable as at June 30, 2021 was $26.5 million with a provision of $26.5 million compared to $27.6 million (provision of $27.6 million) as at December 31, 2020. Subsequent to June 30, 2021 the Company invoiced TANESCO $2.4 million for July 2021 gas deliveries and TANESCO paid the Company $3.5 million.
  • On June 4, 2021 the Company declared a dividend of CDN$0.10 per share on each of its Class A common voting shares (“Class A Shares”) and Class B subordinate voting shares (“Class B Shares”) for a total of $1.6 million to the holders of record as of June 30, 2021 which was paid on July 15, 2021.
  • On June 21, 2021 the Company commenced a normal course issuer bid (“NCIB”) to purchase Class B Shares through the facilities of the TSXV and alternative trading systems in Canada. To date, no shares have been purchased by the Company pursuant to the NCIB.

Jay Lyons, Interim Chief Executive Officer, commented:

“We are very pleased with Orca’s performance to date in 2021. Our production and revenues remained strong during the period and we continue to hit the targets we have set for ourselves. Operationally, Orca remains on track with the installation of compression equipment, designed to ensure the Company can maintain production volumes at 102 MMcfd, with the potential to increase by a further 70 MMcfd.  With a tight control on costs, we maintain a strong balance sheet, enabling us to not only continue investing in the creation of further value from the world class Songo Songo gas field, but also making appropriate returns to our shareholders.  We will keep our stakeholders appraised of our progress as we move forward in the second half of 2021.” 

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