Latest report from Orca Exploration, operator of the Songo Songo...

Latest report from Orca Exploration, operator of the Songo Songo gas field was released on 28/5/10.

http://www.orcaexploration.com/2010/Orca_2010_Q1_FULL.pdf

Here's some interesting snippets:

Undertook extensive evaluation of several new projects culminating in the signing of a Production Sharing Contract that is pending ratification.


Orca will work with all stakeholders and other interested parties to accelerate the development of Tanzanias gas production, infrastructure and markets.


During Q1 2010, Orca continued infrastructure expansion discussions with Songas Limited, the owner of the Songo Songo gas processing plant and EWURA, Tanzanias energy regulator. The objective is to implement a long term infrastructure expansion (the Expansion Project) that will increase the infrastructure capacity to 144 MMcfd. Talks are currently on track for the Expansion Project to achieve
financial closure by Q1 2011 to enable it to be in place by the end of 2012. The majority of the increased gas throughput is expected to be consumed by Tanzanias growing power sector.

Work has also commenced to identify alternative options to accelerate the commercialisation of the Songo Songo West exploration prospect. Assuming commercial success, Songo Songo West is projected to have unrisked P50 resources of 450 Bcf. The Company plans to drill the first well during the second half of 2011.


Capital Commitments
In January 2010, the Company signed a Production Sharing Contract (PSC) in relation to an exploration licence. In the event that the PSC is ratified the Company will have
exploration work commitments.

Funding
Management forecasts that the Company will be able to meet its 2010 Tanzanian capital expenditure program through the use of existing cash balances and self-generated cash flows. The Company currently has no bank borrowings and there is scope for utilising debt funding once the longer term contracts for the supply of gas to the power sector are in place. New funding will be required for the future planned acquisitions.