Orca Exploration to Proceed with Songo Songo Gas Field Development Programme

Orca Exploration on Monday said it is proceeding with the first phase development programme of Songo Songo gas field in Tanzania. 

The decision follows World Bank board approval of the International Finance Corporation (IFC) financing.

IFC has received approval by the board of World Bank for an investment by IFC of up to $60 million in the company's operating subsidiary, PanAfrican Energy Tanzania. The investment is currently contemplated as a subordinated, income participating loan with flexible repayment terms and a maximum tenor of approx. 10 years, Orca said.

Completion of the IFC financing is subject to final agreement of specific terms and the negotiation and signing of definitive documentation.

Subsequent to the approval of the IFC financing, the company said it has entered into a drilling contract with Paragon Offshore for the use of its M826 mobile drilling workover rig, as well the provision of associated services, in order to execute the offshore phase of the development programme for the Songo Songo gas field.

The drilling contract provides for a commencement date between 1st August 2015 and 21st September 2015, with the exact date being the date the drilling rig arrives at the Company's first well location in Songo Songo.  The contract carries a minimum duration of 90 days and a minimum financial commitment of $21 million excluding withholding tax. The company's commitments under the drilling contract are not subject to completion of the IFC financing or funding of such financing.

Orca currently anticipates operations commencing by September 2015. The company also retains the option to drill a further two wells, subject to the success of the workovers.