Orca, through its subsidiary PAET, is currently engaged in natural gas exploration, development, and supply in Tanzania
Image: An offshore oil and gas rig. Photo: courtesy of QR9iudjz0/Freeimages.com.
Orca Exploration Group Inc. (TSXV: ORC.A, ORC.B) (“Orca” or the “Company”) announced that its board of directors is continuing to focus on maximizing the value of the Company’s Tanzanian business, including by (i) pursuing discussions with the Tanzanian authorities to extend the term of the Songo Songo Production Sharing Agreement, Gas Sales Agreement and Development Licence, (ii) considering modifications to the Company’s current business plan for its Tanzanian business, and (iii) executing the Company’s current business plan.
However, given the associated uncertainties, the board of directors has determined that it is in the best interests of the Company and its shareholders that a special committee of independent directors be constituted to review strategic alternatives that might be available to the Company to maximize shareholder value. Transactions under consideration by the special committee are expected to include, without limitation, a substantial issuer bid, a secondary listing of the Company’s shares on another exchange, a reorganization of the Company’s share capital, a secondary offering of the Company’s outstanding shares, and the acquisition of the Company or other arrangement, merger transaction or business combination with another company resulting in asset and/or jurisdiction diversification and a larger, more liquid market, for the equity of the combined company.
The board of directors notes that any proposal to acquire the Company or otherwise complete a business combination transaction must, to receive the support of the board, provide Orca with financing and closing certainty, address the tax and regulatory requirements of Tanzanian authorities and comply with the terms and conditions of Orca’s financing arrangements with the International Finance Corporation and the exercise of its rights under such arrangements.
As a part of this process, it is expected that the special committee will engage with Swala Oil & Gas (Tanzania) plc (“Swala”) related to its ongoing interest in acquiring the Company. However, the board of directors continues to believe that Swala’s proposal is unlikely to result in a transaction that is either financeable or otherwise capable of completion given the regulatory and third party approval requirements and significantly undervalues Orca.
Linda Beal and Jay Lyons have been appointed to the special committee. The special committee is interviewing financial advisors in connection with the review of strategic alternatives and expects to promptly retain a financial advisor.
Orca continues to execute on its business plan and is in a strong financial position. Orca cautions that there can be no assurance that any transaction will be approved or consummated. Orca does not intend to disclose developments with respect to the strategic review processes unless the board has approved a specific transaction, or otherwise determines that disclosure is necessary or appropriate.
Source: Company Press Release