Orca Exploration Group Inc. is proceeding with the first phase of its Songo Songo development program offshore Tanzania following World Bank board approval of the International Finance Corp. (IFC) financing.
IFC has received approval by the board of World Bank for an investment by IFC of up to $60 million in Orca’s operating subsidiary, PanAfrican Energy Tanzania Ltd. The investment is currently contemplated as a subordinated, income participating loan with flexible repayment terms and a maximum tenor of 10 years. Completion of the IFC financing is subject to final agreement of specific terms and the negotiation and signing of definitive documentation. Initial drawdown of the facility will be subject to a number of terms and conditions, including satisfaction by IFC of the sustained payment performance of the Tanzania state utility, TANESCO, in respect of ongoing gas deliveries by the company.
Subsequent to the approval of the IFC financing, Orca entered into a drilling contract with Paragon Offshore plc for the use of its mobile drilling workover jackup M826, along with the provision of associated services, in order to execute the offshore phase of the development program for the Songo Songo gas field. The M826 jackup will operate in the shallow-water operating environment around Songo Songo Island. Orca still needs to obtain certain regulatory and contractual approvals related to certain aspects of the development program.
Orca anticipates operations beginning by September. The operations are planned to include workovers (being the removal and replacement of production tubing strings) on three existing wells (SS‑5, SS-7, and SS-9) and the drilling of one new well (SS-J). The company also retains the option to drill a further two wells, subject to the success of the workovers.