Orca Exploration Provides Operations Update

Source: www.gulfoilandgas.com 8/28/2009, Location: Africa

Orca Exploration provides operations update and had a good second quarter with the sale of 2.3 Bcf of Additional Gas. This was the highest volume of gas sold in any quarter since commercial operations commenced in Tanzania in 2004 and represents a 78% increase on the volumes sold in Q2 2008. Funds flow from operations increased 55% to US$2.5 million compared with US$1.6 million in Q2 2008. The Company enjoys solid, stable cash flow from its Tanzanian business, and has a working capital of US$9.9 million.

The long-term prospects for Orca’s Tanzanian project are excellent. We are confident in the reserves already established, the potential upside in Songo Songo West and the future increases in demand for natural gas in the country. We continue to expand our markets for gas and the excellent sales volumes achieved in Q2 2009 confirm steadily growing demand. The immediate short-term infrastructure issues have been resolved and there are plans in place to increase throughput capacity to 105 MMcfd. Longer term, your Company is developing a cost effective solution to permanently increase capacity and will focus on delivering this project to financial closure over the next 12 - 18 months.

Tanzanian reserves and exploration
The Songo Songo gas field continues to perform well and in line with expectations. All wells have been utilised during the last quarter with the majority of the gas being produced from SS-5. Highly sensitive downhole gauges are due to be pulled from each well during Q4 2009 and will be analysed in advance of the year end evaluation by McDaniel & Associates Consultants Limited.

During Q2 2009, the design for connecting the SS-10 well to the gas processing facilities was completed. The cost of the hook up is forecast to be US$1.2 million and is scheduled to be completed by the end of Q1 2010.

Planning commenced in Q2 for the acquisition of a single transitional zone seismic line taking advantage of the fact that a seismic crew was operating in the area of Songo Songo Island. The seismic will be acquired I Q3 2009 for approximately US$0.3 million and will consist of 5 kilometers of offshore, 3 kilometers across the island and 1 kilometer across a shallow reef. This information will facilitate planning for the drilling of the next deviated well around the time that the infrastructure is expanded and sales volumes increase as new power plants are commissioned.


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Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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