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TORTOLA, British Virgin Islands, June 05, 2026 (GLOBE NEWSWIRE) — Orca Energy Group Inc. (“Orca” or the “Company” and includes its subsidiaries and affiliates) (TSX-V: ORC.A, ORC.B) today announces that it has filed its condensed consolidated interim (unaudited) financial statements and management’s discussion and analysis for the three month period ended March 31, 2026 (“Q1 2026”) with the Canadian securities regulatory authorities. All amounts are in United States dollars (“$”) unless otherwise stated.
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- Revenue for Q1 2026 increased by $3.0 million (12%) compared to the same prior year period, primarily as a result of a higher volumes, partially offset by the increase in the Tanzanian Petroleum Development Corporation (“TPDC”) share of revenue.
- Additional Gas volumes increased by 7.7 MMcfd (11%) for Q1 2026 compared to the same prior year period, mainly a result of increased consumption by power customers, particularly the Tanzanian Electric Supply Company Limited (“TANESCO”).
- On August 7, 2024, PanAfrican Energy Tanzania Limited (“PAET”) and Pan African Energy Corporation (Mauritius) (“PAEM”) issued a notice of dispute (the “Notice of Dispute”) in respect of an investment treaty claim against the Government of Tanzania (the “GoT”) for breach of the Agreement on Promotion and Reciprocal Protection of Investment between the Government of the Republic of Mauritius and the GoT (the “BIT”), and a contractual dispute against the GoT and TPDC, for breaches of the: (i) the Production Sharing Agreement among PAET, TPDC and the GoT (the “PSA”), and (ii) the Gas Agreement among the GoT, TPDC, Songas Limited (“Songas”), and PAET (the “Gas Agreement”), for damages estimated in excess of $1.2 billion. Initial meetings with both the Advisory and Coordinating Committees were held during the week of October 14, 2024, without any resolution on the key issues in dispute. Following a period of negotiations with the GoT, on August 1, 2025, PAET issued two sets of arbitration proceedings against the GoT and TPDC registered with the International Centre for Settlement of Investment Disputes (“ICSID”) for breach of the PSA and Gas Agreement respectively and PAEM issued arbitration proceedings against the GoT for breach of the BIT (the “RFAs”). The claims under the RFAs arise out of a series of actions and omissions by Tanzania and TPDC that threaten the viability of the Company’s Tanzanian operations and breach multiple obligations under the BIT, PSA and the Gas Agreement. On August 28, 2025, ICSID registered all three RFAs. The proceedings under the Gas Agreement and PSA were consolidated by agreement of the parties on December 17, 2025. On February 11, 2026, the arbitral tribunal in the Gas Agreement and the PSA arbitration was constituted, and on February 13, 2026, the arbitral tribunal in the BIT arbitration was constituted. The tribunals held the first procedural hearings in the proceedings under the BIT on April 27, 2026, and in the consolidated proceedings under the Gas Agreement and the PSA on May 7, 2026.
- Net income attributable to shareholders increased by $3.4 million for Q1 2026 compared to the same prior year period, primarily as a result of the increased revenue.
- Net cash flows from operating activities decreased by $21.2 million in Q1 2026 compared to the same prior year period, primarily as a result of the changes in non-cash working capital, including the higher payment of the 2025 current liability associated with Additional Profits Tax (“APT”) in Q1 2026.
- Capital expenditures decreased by $0.6 million for Q1 2026 compared to the same prior year period. The capital expenditures in Q1 2026 and Q1 2025 primarily related to the costs of flowlines replacements on SS-5 and SS-9 wells, deferred from 2024 at the request of the GoT. Capital expenditures for Q1 2026 are presented net of credits received from a supplier previously involved in the workover program.
- The Company exited Q1 2026 with $7.9 million in working capital (December 31, 2025: $27.4 million) and cash and cash equivalents (excluding restricted cash) of $55.2 million (December 31, 2025: $87.0 million). Cash held in hard currencies (USD, Euro, GBP, CDN) as at March 31, 2026 was $54.5 million (December 31, 2025: $82.8 million). In addition to the total unrestricted cash balance of $55.2 million, $24.7 million was posted as security in respect to an appeal initiated by the Company relating to a judgment received from the Tanzania High Court (Commercial Division) for a claim brought by a contractor against PAET relating to alleged losses arising from PAET’s termination of a contract relating to the Company’s 3D seismic acquisition program. On May 11, 2026, $19.3 million was paid in full and final settlement and the restrictions lifted on the remaining security balance of $5.4 million. Of the total unrestricted cash balance of $55.2 million, $38.7 million is held by OEG, $4.3 million by PAEM, and $12.2 million by PAET.
- On February 27, 2026, the Company entered into an agreement with Swala Oil and Gas (Tanzania) plc (in liquidation) (“Swala”) for the withdrawal without leave to refile of Swala’s proceedings against Orca, PAEM, and PAET (collectively, the “Orca Group”) before the High Court of Tanzania in Case No. 11561 of 2025 (the “Tanzanian Proceedings”), and the withdrawal of the anti-suit injunction filed by the Orca Group against Swala in the High Court of England and Wales Commercial Court. The Orca Group and Swala agreed to refer any such dispute to a confidential arbitration conducted under the Arbitration Rules of the London Court of International Arbitration, with London as the place and seat of such arbitration.
- On April 10, 2026 the Orca Group filed a Request for Arbitration under the LCIA Arbitration Rules (2020) pursuant to Clause 2.6 of the Settlement Deed executed on February 26, 2026 by Orca, PAEM, PAET and Swala seeking, declaratory and monetary reliefs against Swala and a new entity to which Swala assigned its claims. Specifically, the Claimants seek declarations that the claims advanced by Swala in the Tanzanian Proceedings and assigned to the new Swala entity have no legal or factual basis and must fail. Instead, those claims are wholly speculative and vexatious and have been manufactured in an attempt to circumvent the comprehensive release contained in the related share sale agreement.
- In February 2025, the Company fully prepaid the $60 million investment (the “Loan”) made by International Finance Corporation (“IFC”) in PAET, pursuant to a loan agreement dated October 29, 2015 between the IFC, PAET and the Company (the “Loan Agreement”). To effect the foregoing prepayment, the Company paid IFC $30.6 million, representing the aggregate outstanding principal of the Loan together with all accrued interest thereon and all other amounts owing in connection with the Loan as of February 21, 2025. As of the date hereof, the annual variable participating interest granted by PAET to the IFC under the terms of the Loan Agreement remains outstanding. Such participation interest will continue to accrue until October 15, 2026.
- In February 2025, the Company received the Judgment (the “Judgment”) from the Tanzanian High Court (Commercial Division) (the “Court”) relating to the claim brought by a contractor against PAET. Pursuant to the Judgment, the Court ordered specific and general damages in the aggregate of $23.1 million, plus legal costs and interest at a rate of 7% per annum to be paid by PAET to the contractor. PAET initiated the appeal process. PAET was required to post security for the full amount of the judgment until the appeal is resolved. The appeal was heard in December 2025 and in its decision dated February 3, 2026 (the “Appeal Judgment“), the Court partially allowed the appeal. The Appeal Judgment awarded the contractor damages in the aggregate of $17.9 million, while dismissing several grounds for damages against PAET in the aggregate of $5.2 million. The Company has treated the Appeal Judgment as an adjusting event to the 2025 financial statements reducing the liability recognized in 2025. On February 9, 2026, PAET filed an application for review of the Appeal Judgment and wrote to the Chief Justice of the Judiciary of Tanzania seeking their urgent intervention. The Company has also filed for a stay of execution of the Appeal Judgment. This review was heard in March 2026. On April 30, 2026, the result of the review was announced with all items dismissed and the award upheld. The Company included $17.9 million of the awarded damages from the cost pool under the terms of the PSA in 2025.
- On February 9, 2026, the Company declared a special dividend of CDN$2.00 per share on each of its Class A Shares and Class B Shares for a total of $28.8 million to holders of record as of February 23, 2026. The dividend was paid on February 27, 2026.
- On January 8, 2026, PAET notified the Tanzanian Petroleum Upstream Regulatory Authority and TPDC that the majority of PAET staff have joined the Tanzanian Union of Industrial Workers (“TUICO”) and that a confidential Collective Bargaining Agreement (the “CBA”) between PAET and TUICO has been executed on January 5, 2026. The CBA specifies staff benefits, including for individual or collective retrenchment. Whilst PAET has no existing plans for redundancies or retrenchment, the Company calculates the maximum prospective payment across all its local workforce based on 2026 staff salary levels to be circa $7 million.
- On April 13, 2026, Orca announced that it had entered into a definitive Share Purchase Agreement (the “Share Purchase Agreement”) with Taifa Gas Tanzania Limited (“Taifa”) and Amber Energy Investment L.L.C-FZ (“Amber”, and together with Taifa, the “Purchasers”) pursuant to which Orca will sell all of the outstanding shares of PAEM (the “Transaction”). Upon closing of the Proposed Transaction, Taifa will acquire 49% of PAEM and Amber will acquire 51%. The SPA provides for a nominal cash price of US$10.00 for the PAEM shares, which is in addition to the other covenants, warranties, representations and obligations of the Purchasers under the agreement and the strategic and commercial benefits that would accrue to Orca by exiting its Tanzanian business. Closing of the Transaction is subject to customary and transaction-specific conditions, including approval or clearance from the Tanzania Fair Competition Commission and the Tanzanian Minister responsible for petroleum affairs, approval by a simple majority of the votes cast by Orca shareholders at the Company’s annual general and special meeting of shareholders, acceptance by the TSX Venture Exchange (the “TSXV”) of the Proposed Transaction and related matters requiring the TSXV’s approval or acceptance, and the release of Orca from remaining guarantees and related undertakings in favor of the IFC in respect of obligations of PAEM and PAET. Any party may terminate the Share Purchase Agreement for any reason.
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Financial and Operating Highlights for the Three Months Ended March 31, 2026
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| Three Months ended March 31 | % Change | ||||
| (Expressed in $’000 unless indicated otherwise) | 2026 | 2025 | Q1/26 vs Q1/25 | ||
| OPERATING | |||||
| Daily average gas delivered and sold (MMcfd) | 79.7 | 72.0 | 11 | % | |
| Industrial | 21.1 | 19.1 | 10 | % | |
| Power | 58.6 | 52.9 | 11 | % | |
| Average price($/mcf) | |||||
| Industrial | 7.86 | 7.98 | (2 | )% | |
| Power | 4.01 | 3.92 | 2 | % | |
| Weighted average | 5.03 | 4.99 | 1 | % | |
| Operating netback($/mcf) | 2.66 | 2.87 | (7 | )% | |
| FINANCIAL | |||||
| Revenue | 28,397 | 25,391 | 12 | % | |
| Net income attributable to shareholders | 3,468 | 102 | n/m | ||
| per share – basic and diluted($) | 0.18 | 0.01 | n/m | ||
| Net cash flows (used in) / from operating activities | (906 | ) | 20,264 | n/m | |
| per share – basic and diluted($)1 | (0.05 | ) | 1.03 | n/m | |
| Capital expenditures1 | (6 | ) | 548 | n/m | |
| Weighted average Class A and Class B shares(‘000) | 19,765 | 19,766 | 0 | % | |
| March 31, | As at December 31, | ||||
| 2026 | 2025 | % Change | |||
| Working capital (including cash)1 | 7,945 | 27,411 | (71 | )% | |
| Cash and cash equivalents (excluding restricted cash) | 55,202 | 86,986 | (37 | )% | |
| Outstanding shares(‘000) | |||||
| Class A | 1,750 | 1,750 | 0 | % | |
| Class B | 18,015 | 18,015 | 0 | % | |
| Total shares outstanding | 19,765 | 19,765 | 0 | % | |
| Please refer to the Non-GAAP Financial Measures and Ratios section of the MD&A for additional information. | |||||
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