Orca announces commencement of drilling the first well in its $130 million expansion programme

Tuesday, Feb 07, 2012

TORTOLA, British Virgin Islands, Feb. 6, 2012 /CNW/ - Orca Exploration Group Inc ("Orca Exploration" or the "Company") announces commencement of the drilling in Tanzania of a new gas production well ("SS-11") on Songo Songo Island. The well is part of a previously announced US$130 million expansion programme to double Orca's production from the Songo Songo field. The programme also includes provision for the drilling of an offshore exploration well at a cost of US$35 million on the Songo Songo West prospect.

Orca, which 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, intends to increase its gas production capacity from 113 million standard cubic feet per day to over 200 million standard cubic feet per day in the coming months. Orca has committed to the current expansion program to ensure that the Company is playing its part in meeting Tanzania's urgent need for increased power generation and energy security.

The SS-11 well is being drilled by the Sakson Rig PR5 which was mobilized to Songo Songo Island in late 2011. The Sakson rig is a powerful, high-specification land rig that has been contracted as part of the ongoing development of the Songo Songo gas field. The rig will drill to a depth of approximately 2,400 metres with drilling continuing for approximately ten weeks. SS-11 will be the seventh well in the Songo Songo field, which extends both onshore under Songo Songo Island and offshore to the west of the island in the Kilwa District, 185 km south of Dar es Salaam.

The use of natural gas from the Orca-operated Songo Songo field has made a significant contribution to Tanzania's economy and is estimated to have saved Tanzania over US$2 billion in other fuel costs since commercial operations began in 2004.

Orca's Tanzania operations are managed by wholly owned subsidiary PanAfrican Energy Tanzania ("PanAfrican") headquartered in Dar es Salaam. PanAfrican has for the past 10 years been the lead private sector investor in Tanzania's gas industry, producing up to 102 million standard cubic feet of gas per day. Over 85% of this gas is used for power generation in Tanzania.

Orca Exploration is an international public company engaged in natural gas exploration, development and supply in Tanzania and oil and gas appraisal in Italy. Orca Exploration trades on the TSXV under the trading symbols ORC.B and ORC.A.

Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Orca Exploration Group Inc.

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