{"id":7934,"date":"2020-01-27T09:31:51","date_gmt":"2020-01-27T09:31:51","guid":{"rendered":"http:\/\/oilnewskenya.com\/?p=7934"},"modified":"2020-01-27T09:31:51","modified_gmt":"2020-01-27T09:31:51","slug":"orca-exploration-announces-a-focused-strategy-to-grow-integrated-gas-business-in-africa","status":"publish","type":"post","link":"https:\/\/www.oilnewskenya.com\/index.php\/orca-exploration-announces-a-focused-strategy-to-grow-integrated-gas-business-in-africa\/","title":{"rendered":"Orca Exploration Announces a Focused Strategy to Grow Integrated Gas Business in Africa"},"content":{"rendered":"

Orca Exploration has announced its focused strategy to grow an integrated gas business in Africa. Outcome of Strategic Review Process with the assistance of its financial advisor, RBC Capital Markets, the special committee of the Board of Directors have completed a thorough review of the options available to the Company to maximize shareholder value.<\/p>\n

As part of the strategic review, board considered and evaluated a substantial issuer bid, a secondary listing of the Company\u2019s shares on another exchange, a reorganization of the Company\u2019s share capital, a secondary offering of the Company\u2019s outstanding shares, and the acquisition of the Company or other arrangement, merger transaction or business combination with another company resulting in asset and\/or jurisdiction diversification and a larger, more liquid market, for the equity of the combined company.<\/p>\n

Based on the alternatives available to the Company, the Special Committee has recommended, and the Board of Directors has concluded, that it is in the best interests of the Company and its shareholders to continue operating as an independent company with a view to enhancing value to its shareholders through a balanced approach, focused on:<\/p>\n

    \n
  1. Return of Capital: The return of retained cash to shareholders in the form of share repurchases and\/or dividends.<\/li>\n
  2. Value Maximization of the Songo Songo Production Licence: The continued value maximization and monetization of the Company\u2019s rights to develop the Songo Songo natural gas field in Tanzania; and<\/li>\n
  3. Sustainable Growth: Strategic reinvestment utilizing the Company\u2019s core competency to develop a sustainable, integrated gas business in Africa with accretive returns.<\/li>\n<\/ol>\n

    \u201cWe believe that the decision to focus on generating material returns for shareholders via organic growth and strategic reinvestment of retained capital into other African gas opportunities, will enable the Board of Directors and management to deliver accretive value to shareholders going forward,\u201d said Nigel Friend, Chief Executive Officer.<\/p>\n

    In conjunction with the announcement of this strategy, the Company said it intends to return a portion of its excess cash to shareholders through a substantial issuer bid. The Company also plans to introduce a dividend policy in the first half of 2020 providing for regular dividends determined on an annual basis, and will assess from time-to-time incremental returns of capital to shareholders relative to the merits of available investment opportunities.<\/p>\n

    \u201cWe are pleased to have concluded the strategic review process. On the back of our strong performance in 2019, it is now the right time to return a portion of our retained cash back to shareholders through a substantial issuer bid. The prudent management of capital and regular distributions to our shareholders will continue to be a core part of our strategy. Given the strength of Orca\u2019s operations \u00a0and the Company\u2019s balance sheet, we are well placed to deliver on the agreed mandate outlined by the strategic review process.\u201d<\/p>\n

    At the same time Orca has announced that a Letter of Instruction was signed with an international contractor on 23rd<\/sup> December 2019 with significant presence and experience in Tanzania for the commencement of detailed engineering and design for the compression project. Orca adds that a definitive agreement for the project is expected to be signed by the end of February 2020 on a fixed price, turnkey basis with a forecast that compression will be operational by the end of 2021 and cost approximately US$38 million of which US$34.2 million is forecasted to be spent in 2020<\/p>\n

    \u201cTo sustain current levels of production beyond 2020, it will be necessary to install compression facilities to optimize throughput capacity of the Songas facilities over the remaining term of the PSA and underlying licence. Failure to incorporate compression would lead to a significant loss in production through the Songas facilities as field pressure declines below the level required to deliver gas to the power sector in Dar es Salaam and our industrial customers over time,: reads the announcement.<\/p>\n

    At the same time the Board of Directors has approved debottlenecking the flow-line infrastructure to increase production potential from the SS-10 and SS-11 wells (both of which are owned by the Company) at an estimated cost of US$1.3 million to be incurred in 2020.<\/p>\n

    It is estimated that Orca will need to invest approximately US$80.2 million in debottlenecking, compression and workovers to sustain and meet the anticipated gas demand profile over the remaining term of the PSA. The Board of Directors has approved US$39.3 million of this forecasted capital expenditure amount (US$35.5 million for 2020 and US$3.8 million for 2021). Orca says it intends to recover investments of sustaining capital from net revenues under the cost recovery mechanism in the PSA.<\/p>\n

    The Government of Tanzania is currently reviewing for potential renegotiation the terms of all existing licences and related production sharing agreements for the exploration, development and production of oil and gas in Tanzania with its conclusions and plans expected during the first half of 2020. According to pundits this may result in the Government seeking to re-negotiate the terms of our existing PSA.<\/p>\n","protected":false},"excerpt":{"rendered":"

    Orca Exploration has announced its focused strategy to grow an integrated gas business in Africa. Outcome of Strategic Review Process with the assistance of its financial advisor, RBC Capital Markets, … Read More<\/a><\/p>\n","protected":false},"author":24,"featured_media":6654,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[11],"tags":[63,3318,2090,2883,7132,2466],"class_list":["post-7934","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-top-news","tag-africa","tag-orca-exploration","tag-psa","tag-songas","tag-songosongo","tag-tanzania","entry"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2018\/01\/songo-songo-field.jpg?fit=355%2C378&ssl=1","jetpack_shortlink":"https:\/\/wp.me\/p5JWkQ-23Y","jetpack-related-posts":[{"id":6198,"url":"https:\/\/www.oilnewskenya.com\/index.php\/swala-oil-gas-seeks-minority-investment-orca-group\/","url_meta":{"origin":7934,"position":0},"title":"Swala Oil & Gas Seeks minority investment in the Orca Group","author":"","date":"August 15, 2017","format":false,"excerpt":"Orca Exploration Group has confirmed that it is in discussions with Swala Oil & Gas (Tanzania) plc regarding a possible minority investment in PAE PanAfrican Energy Corporation (PAEM), a Mauritius-registered company that is a wholly-owned subsidiary of the Company. Orca which is the operator of the 879 Bcf Songo Songo\u2026","rel":"","context":"In "Top News"","block_context":{"text":"Top News","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/top-news\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2017\/08\/swala-energy-orca-exploration.png?fit=331%2C303&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":7133,"url":"https:\/\/www.oilnewskenya.com\/index.php\/swala-receives-approval-list-bonds-stock-exchange-mauritius\/","url_meta":{"origin":7934,"position":1},"title":"Swala Receives Approval To List Bonds On The Stock Exchange Of Mauritius","author":"","date":"August 3, 2018","format":false,"excerpt":"Swala Oil & Gas (Tanzania) has announced that the Stock Exchange of Mauritius has approved the Company\u2019s Listing Prospectus, allowing the listing of the Company\u2019s US$50 million Corporate Bonds on the SEM with Greenshoe Rights. The Company first announced the move to Mauritius on the 2nd of July 2018. The\u2026","rel":"","context":"In "Top News"","block_context":{"text":"Top News","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/top-news\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2018\/08\/Swala-Tanzania.png?fit=484%2C352&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":3077,"url":"https:\/\/www.oilnewskenya.com\/index.php\/orca-exploration-receives-60-million-financing-songo-songo-development-programme\/","url_meta":{"origin":7934,"position":2},"title":"Orca Exploration Receives $60 million financing for the Songo Songo development programme","author":"","date":"June 16, 2015","format":false,"excerpt":"Orca Exploration has announced that it is proceeding with the first phase of the Songo Songo development programme following World Bank board approval of the International Finance Corporation financing. Through its operating subsidiary, PanAfrican Energy Tanzania Limited the World Bank board approved an investment of $60 million by IFC currently\u2026","rel":"","context":"In "Top News"","block_context":{"text":"Top News","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/top-news\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/08\/songo-songo2.png?fit=465%2C546&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":6653,"url":"https:\/\/www.oilnewskenya.com\/index.php\/swala-energy-set-acquire-first-producing-assets-tanzania\/","url_meta":{"origin":7934,"position":3},"title":"Swala Energy Set To Acquire First Producing Asset in Tanzania","author":"","date":"January 3, 2018","format":false,"excerpt":"Swala Oil and Gas entered into an agreement with Orca Exploration to acquire up to 40% \u00a0interest in the Songo Songo producing assets currently held by the international finance corporation (IFC) for $130 million based on an agreed value of US$325 million as earlier announced in August. According to Orca\u2026","rel":"","context":"In "Top News"","block_context":{"text":"Top News","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/top-news\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2018\/01\/songo-songo-field.jpg?fit=355%2C378&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1458,"url":"https:\/\/www.oilnewskenya.com\/index.php\/orca-exploration-group-in-talks-with-third-parties-regarding-potential-sale-or-significant-transaction\/","url_meta":{"origin":7934,"position":4},"title":"Orca Exploration Group in talks with third parties regarding potential sale or significant transaction","author":"Samuel Kamau Mbote","date":"July 16, 2014","format":false,"excerpt":"Orca Exploration Group which has its operations in Tanzania and Italy has advised that the Company is in discussions with a number of third parties which have made unsolicited approaches to the Company relating to the sale of the Company, a significant asset disposal, strategic investment or other transaction involving\u2026","rel":"","context":"In "Top News"","block_context":{"text":"Top News","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/top-news\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/07\/songo-songo.png?fit=397%2C554&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":3966,"url":"https:\/\/www.oilnewskenya.com\/index.php\/orca-exploration-closes-60-million-financing-for-tanzanias-songo-songo-development-from-ifc\/","url_meta":{"origin":7934,"position":5},"title":"Orca Exploration Closes $60 million financing for Tanzania\u2019s Songo Songo development from IFC","author":"","date":"October 30, 2015","format":false,"excerpt":"Orca Exploration has announced that it has entered into a loan agreement with International Finance Corporation (IFC), a member of the World Bank Group, for a US$60 million investment in the Company's operating subsidiary, PanAfrican Energy Tanzania Limited (PAET). According to Orca Exploration the proceeds of the Loan will be\u2026","rel":"","context":"In \"International Finance Corporation\"","block_context":{"text":"International Finance Corporation","link":"https:\/\/www.oilnewskenya.com\/index.php\/tag\/international-finance-corporation\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2015\/09\/Paragon-Offshore-jack-up-rig-M826.jpg?fit=356%2C213&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]}],"jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts\/7934","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/users\/24"}],"replies":[{"embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/comments?post=7934"}],"version-history":[{"count":1,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts\/7934\/revisions"}],"predecessor-version":[{"id":7935,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts\/7934\/revisions\/7935"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/media\/6654"}],"wp:attachment":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/media?parent=7934"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/categories?post=7934"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/tags?post=7934"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}