Orca Announces Signing Settlement Agreement for the Payment of Arrears Owing by Tanzania Electric Supply Company Limited

/EIN News/ -- TORTOLA, British Virgin Islands, April 15, 2025 (GLOBE NEWSWIRE) -- Orca Energy Group Inc. (“Orca” or the “Company” and includes its subsidiaries and affiliates) (TSX-V: ORC.A, ORC.B) announces that PanAfrican Energy Tanzania Limited (“PAET”) signed a Settlement Agreement with Tanzania Petroleum Development Corporation (“TPDC”) and Tanzania Electric Supply Company Limited (“TANESCO”) for TANESCO to pay PAET and TPDC US$52.0 million for unpaid amounts owing by TANESCO for deliveries of natural gas from the Songo Songo gas field.

PAET and TPDC (collectively, the "Seller") agreed with TANESCO in the Portfolio Gas Supply Agreement (as amended) (the “PGSA”) to supply it with Additional Gas (as defined in the Production Sharing Agreement (“PSA”) between PAET, TPDC and the Government of Tanzania). TANESCO, a parastatal organization wholly owned and controlled by the Government of Tanzania with oversight by the Ministry of Energy, has lifted, but not paid for, certain Additional Gas volumes supplied by the Seller. The parties acknowledged in the Settlement Agreement that these unpaid amounts totaled US$104,164,507.41 (the “TANESCO Arrears”) as of January 9, 2025, comprised of US$33.7 million of the principal amount owing and approximately US$70.5 million of default interest.

The Settlement Agreement requires TANESCO to pay the Seller the Tanzanian Shilling equivalent of US$52.0 million (the “Settlement Amount”) comprised of the US$33.7 million principal amount and US$18.3 million representing a portion of the default interest owed by TANESCO to the Seller. The Seller agreed to waive the balance of the default interest owing by TANESCO to the Seller if TANESCO pays the Settlement Amount when required and in full. TANESCO must pay the Settlement Amount to PAET in weekly installments commencing in April 2025 and ending in October 2025. Payments on account of the Settlement Amount will be allocated between PAET and TPDC in accordance with the PSA. Pursuant to the PSA, and assuming payment in full of the Settlement Amount, Orca expects to retain approximately US$29.4 million of the Settlement Amount with TPDC retaining the balance.

If TANESCO breaches its payment obligations under the Settlement Agreement, the Settlement Agreement terminates and the Seller will be entitled to enforce its rights to receive payment of the net amount of the TANESCO Arrears owing plus default interest.

Jay Lyons, Chief Executive Officer, commented:

“We are pleased to announce that a financial settlement has been reached for the Additional Gas volumes historically supplied but not paid for under the PGSA with TANESCO. Since Orca first entered Tanzania, the Company has always strived to act in the best interests of the country. This situation was no different. Despite Orca not being fully paid by TANESCO for certain volumes supplied, dating back to 2013, the Company chose to continue supplying natural gas to TANESCO in order to help protect the Tanzanian economy through sustained power generation.

The Group is pleased to have resolved the ongoing arrears situation, with a clear payment plan now laid out that will enable TANESCO to pay the reduced amount agreed by all parties and stop incurring further arrears. It is important to note that in the event the payment schedule is not adhered to, the Group retains the right to pursue other avenues of legal recourse available to it in order to safeguard the interests of its investors.”

Orca Energy Group Inc.

Orca Energy Group Inc. is an international public company engaged in natural gas development and supply in Tanzania through PAET. Orca trades on the TSX Venture Exchange under the trading symbols ORC.B and ORC.A.

Neither TSX Venture Exchange nor its Regulation Services 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 Information

This news release contains forward-looking statements or information (collectively, “forward-looking statements”) within the meaning of applicable securities legislation. All statements, other than statements of historical fact included in this news release, which address activities, events or developments that Orca expects or anticipates to occur in the future, are forward-looking statements. Forward-looking statements often contain terms such as may, will, should, anticipate, expect, continue, estimate, believe, project, forecast, plan, intend, target, outlook, focus, could and similar words suggesting future outcomes or statements regarding an outlook. More particularly, this news release contains, without limitation, forward looking statements pertaining to the following: timing as to payment of the Settlement Amount; that the Seller will receive the full Settlement Amount in accordance with the terms of the Settlement Agreement; that the Settlement Agreement will not be terminated; the estimated portion of the Settlement Amount to be received by PAET; and whether TANESCO will pay some or all of the Settlement Amount in Tanzanian Shillings at the Bank of Tanzania Selling Rate on the date of payment. Although management believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results since such expectations are inherently subject to significant business, economic, operational, competitive, political and social uncertainties and contingencies.

These forward-looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company’s control, and many factors could cause the Company’s actual results to differ materially from those expressed or implied in any forward-looking statements made by the Company, including, but not limited to: risks as to timing of payment of the Settlement Amount; risks that the Seller will not receive the full Settlement Amount in accordance with the terms of the Settlement Agreement; risks that the Settlement Agreement will be terminated; uncertainty around the portion of the Settlement Amount to be received by PAET; and uncertainty whether TANESCO will pay some or all of the Settlement Amount in Tanzanian Shillings at the Bank of Tanzania Selling Rate on the date of payment. No assurances can be given that any of the events anticipated by these forward-looking statements will transpire or occur, or if any of them do so, what benefits the Company will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive.

Such forward-looking statements are based on certain assumptions made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors the Company believes are appropriate in the circumstances, including, but not limited to: the Company's relationship with TANESCO; that TANESCO will abide by the terms of the Settlement Agreement; that the amount of receivable by PAET pursuant to the Settlement Agreement will be in line with expectations; and other matters.

The forward-looking information contained in this news release is provided as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable Canadian securities laws.

For further information please contact:
                    
                    Jay Lyons
                    ir@orcaenergygroup.com
                    
                    Lisa Mitchell
                    ir@orcaenergygroup.com
                    
                    For media enquiries:
                    Celicourt (PR)
                    Jimmy Lea
                    Mark Antelme
                    Orca@celicourt.uk
                    +44 (0)20 7770 6424