Orca Exploration completes offshore workover & drilling program phase at Songo Songo

Orca Exploration Group Inc announces the successful completion of its offshore workover and drilling program and the release of the Paragon M826 mobile drilling workover rig from the Songo Songo Main Field.

The Off-Shore Programme of the Songo Songo Main Field development programme included workovers on three existing wells (SS-5, SS-7 and SS-9) and the drilling of one new development well, SS-12.

Phase 1 of the development programme also includes the completion of the SS-12 production platform, flowlines and tie-in facilities connecting SS-12 to the Company’s gas processing facilities and a refrigeration system required to ensure field production stability to enable the Company to produce wells into the newly built National Natural Gas Infrastructure Project (NNGIP).

Orca Exploration says the total cost of Phase 1 of the development programme has dropped from the originally estimated to cost US$120 million to under US$80 million with costs incurred to date of approximately US$68 million.

The reduction in costs was a result of being able to successfully workover the three wells without having to do any side-tracking, efficiencies achieved during the work-overs, and work scope changes which reduced the original estimated time required to complete Phase 1.

The full development programme provides for additional workovers, compression systems and additional infrastructure to ensure all production commitments are met through to the end of the licence in 2026.

We are delighted with the success of the Offshore Programme and the significant cost savings achieved, this reflects the strength of our operation’s team. The development programme has enabled the Company to significantly increase production capacity in Tanzania and ensure the continued reliable supply of natural gas to our customers,” said Orca’s Chairman and Chief Executive Officer, David Lyons.

The Offshore Programme was designed to:

  • put safe existing suspended and operating production wells;
  • restore and increase the current productive capacity of the Songo Songo Main Field to ensure the continued delivery of Protected and Additional gas into the existing Songas infrastructure; and
  • provide additional operational redundancy and deliverability for future additional gas sales.

The Offshore Programme has successfully increased production capacity from approximately 83 million standard cubic feet per day (MMscfd) prior to the development programme to current production capabilities of approximately 150 MMscfd.

Upon completion of the platform for SS-12 and the tie-in to production facilities, production capabilities are expected to be in excess of 185 MMscfd.

The field is now capable of both filling the existing Songas infrastructure to capacity of approximately 102 MMscfd, as well as providing additional gas volumes to the NNGIP.

Orca says it is currently negotiating terms for the sales agreement to the NNGIP with the Tanzania Production and Development Company (TPDC).

Until the agreement is signed, the Company’s production is limited by infrastructure and contractual constraints, producing an average of 90 MMscfd for the fourth quarter of 2015 and is expected to average 94 MMscfd in 2016.

Orca currently supplies gas primarily for power generation to the Tanzania Electric Supply Company (TANESCO), Songas, and 38 industrial customers in the Dar es Salaam area.

Orca’s Tanzania operations are managed by the Company’s wholly owned subsidiary, Pan African Energy Tanzania Limited (PAET), headquartered in Dar es Salaam.

In order to complete the Off-Shore Programme, the Company’s wholly owned subsidiary, PAET has utilized the US$60 million loan facility with International Finance Corporation which was signed on 29 October 2015 (the Loan).

The final US$40 million drawdown of the Loan was received on 18th February 2016.

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