Petroleum Africa
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Wednesday, June 17, 2015
Orca Exploration is moving forward with the first phase of the Songo Songo development program following approval from the World Bank for the IFC financing. IFC 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. The investment is currently contemplated as a subordinated, income participating loan with flexible repayment terms and a maximum tenor of approximately 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 also, including satisfaction by IFC of the sustained payment performance of the Tanzania state utility, TANESCO, in respect of ongoing gas deliveries by Orca.
The company said that subsequent to the approval of the IFC financing, it entered into a drilling contract with Paragon Offshore for the use of the M826 Mobile Drilling Workover Rig, as well as the provision of associated services to execute the offshore phase of the development program for the Songo Songo.
Orca still needs to obtain certain regulatory and contractual approvals related to certain aspects of the development program.
The drilling contract provides for a commencement date between August 1 and September 21, with the exact date being the when the drilling rig arrives at the first well location. 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. The company currently anticipates operations commencing by September 2015.
The operations are planned to include workovers on three existing wells (SS-5, SS-7 and SS-9) and the drilling of one new well (SS-J). Orca also retains the option to drill a further two wells, subject to the success of the workovers.
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