Orca gets $60M loan for Songo Songo drilling

Orca Exploration Group Inc. has secured a loan to finance part of its offshore development project in Tanzania. The company entered the $60 million loan agreement with International Finance Corporation, a member of the World Bank Group.

Proceeds of the loan will be used to fund part of an estimated $120 million first phase of a Songo-Songo Main Field offshore development program currently being undertaken using the Paragon M826 jack-up drilling rig.

The offshore program is intended to restore and expand field productive capacity from approximately 83 million standard cubic feet per day (“MMscfd”) prior to the programme to approximately 190 MMscfd on completion of the program.

Since the program started, previously suspended production wells SS-5 and SS-9 have been worked over and recompleted, and have been restored to full productive capacity estimated to be approximately 35 MMscfd per well.

When completed, the field is expected to be capable of both filling the existing infrastructure to the capacity of approximately 102 MMscfd, as well as providing additional gas volumes to the newly commissioned National Natural Gas Infrastructure Project (“NNGIP”) as and when contracted.

“The conclusion of the IFC financing is a significant achievement for Orca and an important endorsement of the Company’s continuing commitment to Tanzania,” commented W. David Lyons, Orca Chairman and Chief Executive Officer. “It allows us to raise finance and manage risk in the face of a challenging business environment, and to undertake urgently needed development of the Songo Songo field.

“It further safeguards Songo Songo’s future as an important part of Tanzania’s energy security. The World Bank was instrumental in bringing the Songo Songo gas-to-electricity project to reality some 20 years ago and Orca is pleased to continue this long-term relationship, now directly with IFC, in support of the sustainable development of Tanzania’s energy resources.”

“The Songo Songo field is Tanzania’s most important source of proven natural gas production, and is the largest supplier of energy to the Dar es Salaam region“ said Lance Crist, IFC Global Head of Natural Resources. “Through this investment, IFC is working to help to alleviate electricity shortages in Tanzania, which are an impediment to the country’s continued economic growth and development.”

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