Orca Energy Group Reports Q2 2024 Financial Performance
Orca Energy Group Inc. Announces Completion of Q2 2024 Interim Filings
TORTOLA, British Virgin Islands — Orca Energy Group Inc. (“Orca” or the “Company”) (TSX-V: ORC.A, ORC.B) today announces that it has filed its condensed consolidated interim financial statements and management's discussion and analysis for the three and six month periods ended June 30, 2024.
Financial Highlights for Q2 2024
In Q2 2024, Orca Energy Group witnessed a revenue decline of 11% compared to the previous year, attributing this to reduced sales in the power sector and changes in income tax adjustments. Notably, the forecast for Additional Gas sales in 2024 is estimated to be between 70-80 MMcfd, influenced by currently contracted volumes.
Production and Market Update
The total gross conventional natural gas production averaged 94.4 MMcfd in Q2 2024. However, gas deliveries saw a decrease of 25% compared to the same period last year. Factors contributing to this include the commercial launch of Tanzania's Julius Nyere Hydropower Project (JNHPP), which significantly influenced gas lifting activities in the early part of 2024 due to favorable rainfall conditions and enhanced hydropower generation.
Challenges and Strategic Developments
Orca faces challenges regarding its Production Sharing Agreement (PSA) with TPDC, with an uncertain outlook on license extension requests. The Company and PanAfrican Energy Tanzania Limited (PAET) seek to negotiate amendments to supply agreements with TANESCO, working closely to establish a second amendment to their gas supply agreement which now extends until October 2026.
Operational Insights
As part of its operational strategy, the Company has begun mobilization of assets for the SS-7 offshore well workover, aiming to restore production levels previously hampered by water inflow issues. Successful intervention is expected to enhance field deliverability, projecting a potential increase of 20-25 MMcfd once operations begin later this year.
Financial Performance Metrics
Net income attributable to shareholders showed a significant decrease of 56% for Q2 2024, reflecting the adverse impacts of reduced revenue and a higher net foreign exchange loss stemming from currency devaluation. Meanwhile, capital expenditures increased by 36% for this quarter as investments were focused on well workovers and further geological assessments.
Company Outlook and Future Prospects
The Company concludes the quarter with healthy working capital of $68.6 million and cash assets totaling $97.2 million. This liquidity positions Orca to navigate current market challenges while pursuing growth opportunities in natural gas production.
Market Position and Operational Efficiency
Orca Energy Group remains committed to optimizing its operations for effective resource management. The Company evaluates existing flowline configurations to sustain production rates until new projects become operational. Ongoing assessments of reservoir performance continue to yield data that enhances production forecasts.
Frequently Asked Questions
What were the main financial highlights for Orca in Q2 2024?
Orca reported an 11% drop in revenue compared to the prior year, with a notable decrease in net income attributed to reduced gas sales and higher foreign exchange losses.
What factors contributed to reduced gas deliveries?
A significant decrease of 25% in gas deliveries was observed, largely influenced by the increased capacity from the hydropower sector and lower demand due to operational adjustments in the gas market.
What is the forecast for Additional Gas sales in 2024?
The forecast for Additional Gas sales in 2024 is estimated to range between 70-80 MMcfd, based on existing contracted volumes and adjustments following the end of the Protected Gas regime.
How is the Company addressing its operating challenges?
Orca is actively working on negotiating further amendments to its supply agreements and is engaged in operational strategies to enhance production, particularly through interventions in key wells.
What is Orca's current financial position?
As of June 30, 2024, Orca reported working capital of $68.6 million and cash reserves of $97.2 million, positioning itself well to cope with market dynamics and ongoing operational commitments.
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