TSX-V: ORC.A, ORC.B
TORTOLA, British Virgin
Islands, Oct. 19, 2012 /CNW/ -
Orca Exploration Group Inc. ("Orca" or "the Company") and its
operating subsidiary PanAfrican Energy Tanzania Limited ("PAT" or
"PanAfrican") jointly announce that its new SS-11 well is onstream
which is expected to maintain and strengthen reliability of gas
production from Tanzania's Songo
Songo gas field.
The new production well SS-11, completed at Songo Songo Island
in June 2012, was flowline connected
to the on-island gas processing plant and successfully brought
onstream 3 October 2012. SS-11
is currently producing approximately 30 million cubic feet per day
("MMcfd") of natural gas.
Announcing this development, Orca Chairman and Chief Executive
Officer W. David Lyons stated, "We
congratulate our team in Tanzania
for bringing this well onstream to ensure sustained gas production
capacity. We also congratulate our local Tanzanian contractors on
this project. They supplied 100% local content for this
installation and construction project. The installation involved
developing an innovative solution to a unique engineering challenge
which was met by local construction of a complex barge to lay the
pipeline. We delivered the project on budget and in roughly
one-third of the time."
With SS-11 now onstream Orca has taken the SS-9 well off
production and suspended it as planned. It is anticipated
that production from the new SS-11 well can be increased to over 40
MMcfd with the planned debottlenecking of the gas gathering
infrastructure expected to be completed over the next few
months.
The SS-9 well, which was producing approximately 30 MMscf/d, has
been permanently suspended due to a tubing leak resulting in rising
casing annulus pressures. To ensure sustainable production levels,
the Company is also reviewing the integrity of the SS-3 and SS-4
wells which are currently producing a total of approximately
18 MMcfd. Orca's current view is that to ensure continued safe
operations, SS-3 will need to be suspended immediately and,
depending on the results of the tests, SS-4 may need to be
suspended over the next number of weeks. The Company plans to make
up the production shortfall with additional volumes from SS-10 and
SS-11. As a result no material change in field production
levels of approximately 101 MMscf/d is currently anticipated. There
will be, however, no redundant capacity in the facility or pipeline
until additional wells can be drilled in the field and facilities
expanded.
The SS-9, SS-3 and SS-4 wells were drilled by the Tanzanian
Petroleum Development Corporation ("TPDC") between 1976 and 1983
and have reached the end of their useful life. The SS-10 well was
drilled by the Company in 2007. Plans for an additional development
well, SS-12, were placed on hold until the re-negotiation of
certain terms of the Songo Songo Production Sharing Agreement and
related issues arising from the Government Negotiating Committee
discussions have been fully resolved as well as the significant
outstanding TANESCO receivable having been paid.
With the tie-in of SS-11, PanAfrican Energy has achieved a
number of important milestones in Tanzania, including the first offshore heavy
lift achieved in East Africa and
the first shallow water application of Technip's technically
advanced Coflexip pipe in East
Africa.
Officer appointment
The Company also wishes to announce the
appointment of David K. Roberts as
Vice President Operations and Country Manager. Mr. Roberts has a
BSc in Petroleum Engineering from the Colorado
School of Mines and has over 20 years experience in
international oil & gas production and drilling
operations. His early career was spent with Perenco where he
progressed from Field Engineer to Engineering & Operations
Manager. From 1999 to 2006, Mr. Roberts assumed increasing
operating responsibilities at Orca's predecessor company in
Gabon, Pan-Ocean Energy Ltd.,
ultimately as General Manager, where was instrumental in managing
that company's growth from 400 barrels of oil per day ("bpd") to
20,000 bpd. Mr. Roberts will be based in Dar es Salaam and replaces
Andrew Brown as Country Manager.
Orca Exploration Group Inc. is an international
public company engaged in natural gas exploration, development and
supply in Tanzania, through its
wholly-owned subsidiary PanAfrican Energy Tanzania Limited, and oil
and gas appraisal in Italy. Orca
trades on the TSXV under the trading symbols ORC.B and ORC.A.
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 press release contains forward-looking
statements. More particularly, this press release contains
statements concerning, but not limited to, the effect of the S-11
well on maintaining and strengthening reliability of gas production
from the Songo Songo gas field; current production from the S-11
well; anticipated increases to production from the S-11 well;
expected timing of debottlenecking of the gas gathering
infrastructure; the Company's expectations regarding suspension of
the SS-3 and SS-4 wells and plans to make up the production
shortfall from additional volumes from the SS-10 and SS-11 wells;
and status of re-negotiating certain terms of the Songo Songo
Production Sharing Agreement, resolution of related issues arising
from the Government Negotiating Committee discussions and payment
of the outstanding TANESCO receivable. 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.
Many factors could cause Orca's actual results to differ materially
from those expressed or implied in any forward-looking statements
made by Orca.
These forward-looking statements involve
substantial known and unknown risks and uncertainties, certain of
which are beyond Orca's control, including, but not limited to, the
impact of general economic conditions in the areas in which Orca
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; 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; effect of changes to the Production Sharing
Contract on the Company; changes in laws; imprecision in reserve
estimates; the production and growth potential of the Company's
assets; obtaining required approvals of regulatory authorities;
risks associated with negotiating with foreign governments; ability
to access sufficient capital; and risk that the Company will not be
able to fulfill its obligations. In addition there are risks and
uncertainties associated with oil and gas operations, therefore
Orca'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 that Orca will derive therefrom.
Such forward-looking statements are based on
certain assumptions made by Orca in light of its experience and
perception of historical trends, current conditions and expected
future developments, as well as other factors Orca believes are
appropriate in the circumstances, including, but are not limited
to, the ability of Orca to add production at a consistent rate;
infrastructure capacity; commodity prices will not deteriorate
significantly; the ability of Orca to obtain equipment in a timely
manner to carry out exploration, development and exploitation
activities; future capital expenditures; 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; effects of
regulation by governmental agencies; that the Company will have
sufficient cash flow, debt or equity sources or other financial
resources required to fund its capital and operating expenditures
and requirements as needed; 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 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.
SOURCE Orca Exploration Group Inc.