Operations Update & Guidance for 2022
Posted on 02 December 2021
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.”
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.