Orca Energy Secures Settlement with TANESCO on Arrears Payments
Settlement Agreement Announced Between Orca and TANESCO
Orca Energy Group Inc. (TSX-V: ORC.B, TSX-V: ORC.A) is excited to announce a pivotal development in its operations. The company has finalized a Settlement Agreement with TANESCO, the Tanzania Electric Supply Company Limited, in conjunction with the Tanzania Petroleum Development Corporation (TPDC). This agreement revolves around the payment of outstanding debts, specifically a total of US$52.0 million, owed for natural gas previously supplied by PanAfrican Energy Tanzania Limited (PAET).
As outlined through a series of negotiations, TANESCO acknowledged its dues amounting to US$104,164,507.41, which results from unpaid amounts for natural gas supplied from the Songo Songo gas field. This financial obligation includes principal debts along with accrued default interest. The Settlement Agreement delineates a structured payment plan that allows TANESCO to address these arrears comprehensively.
Details of the Settlement
The agreement stipulates that TANESCO will pay the equivalent of US$52.0 million, broken down into manageable weekly installments beginning in April and concluding in October. This arrangement gives TANESCO a pathway to routine repayments while relieving it of an excessive debt burden. In return for adhering to these payment terms, the Seller has agreed to waive a substantial portion of the additional interest, creating a mutually beneficial scenario.
Upon fulfilling these payment commitments, Orca expects to retain approximately US$29.4 million, reflecting its critical role in this transaction. The strategic partnership forged through the PGSA aims to enhance long-term stability in gas supply, which is vital for ongoing power generation in Tanzania.
Orca’s Commitment to Tanzania
Jay Lyons, the Chief Executive Officer of Orca, proudly stated that the company remains deeply committed to supporting Tanzanian energy needs. Despite previous challenges with payment defaults, Orca consistently continued to supply essential natural gas to the grid. This decision showcases the company's dedication to ensuring economic stability in the region.
Lyons further emphasized that the resolution of this financial situation exemplifies a significant step forward for Orca and its partners. With a defined payment structure now in place, the risk of additional arrears is significantly mitigated, allowing for a healthier operational environment.
Overview of Future Expectations
Looking ahead, Orca Energy Group is optimistic about the implementation of this agreement. If TANESCO adheres to its obligations, the stability of gas supply will significantly improve. Orca aims to continue its proactive stance in the market, ensuring that it can support the Tanzanian economy effectively.
Operational Insights of Orca Energy Group
Orca Energy Group is recognized as a key player in the natural gas sector in Tanzania. The company operates through PAET, dedicating its efforts to maintain an efficient supply of natural gas and contributing to regional power generation needs. Orca's commitment is underscored by its trading on the TSX Venture Exchange under the symbols ORC.A and ORC.B.
The Vision Ahead
As Orca moves forward, proper management of its financial agreements is crucial. The company is prepared to take necessary legal actions should any payment discrepancies arise in the future, securing the interests of its investors.
Frequently Asked Questions
What is the total amount TANESCO owes to Orca?
TANESCO has a total outstanding debt of approximately US$104.1 million, which includes unpaid amounts and default interest.
How much is TANESCO required to pay under the Settlement Agreement?
Under the Settlement Agreement, TANESCO is required to pay US$52.0 million, broken down into weekly installments.
What happens if TANESCO doesn't adhere to the payment schedule?
If TANESCO breaches the payment obligations, the Settlement Agreement becomes void, allowing the Seller to enforce its rights to receive full payments.
What is Orca's role in this agreement?
Orca Energy Group plays a vital role as the gas supplier, ensuring the production and delivery of natural gas while managing the financial agreements tied to these supplies.
What is Orca Energy Group's overall commitment to Tanzania?
Orca is dedicated to supporting the economic stability and energy needs of Tanzania, reflected in its continued supply of natural gas to TANESCO despite financial challenges.
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