Orca Energy Group Inc. Announces Independent Reserves Evaluation for Year End 2025

Executive Summary

• Orca Energy Group’s independent reserves evaluator confirmed a sharp decline in its conventional natural gas reserves, with 1P reserves falling 57% to 17.5 Bcf and 2P reserves down 54% to 19.2 Bcf versus year‑end 2024.
• Net present value of 1P future net revenue dropped 53% to $29.2 million (10% discount rate), and 2P NPV fell 51% to $31.6 million, reflecting lower reserves and a shortened licence term.
• The decline is attributed primarily to 26.2 Bcf of production in 2025 and modest positive technical revisions; gas sales are projected at 26.2 Bcf for 2025, a ~2% decrease from 2024.

Key Details

• Reserves (Gross – Company):
• Proved (1P) – Developed Producing: 17,478 MMcf (11,973 MMcf net).
• Probable (2P) – Additional: 1,674 MMcf (1,187 MMcf net).

• Total 1P + 2P: 19,152 MMcf (13,160 MMcf net).

• Net Present Value of Future Net Revenue (10% discount):

• 1P – $29.2 million (down from $61.8 million YoY).

• 2P – $31.6 million (down from $64.7 million YoY).

• Production & Sales:

• Gas produced in 2025: 26.2 Bcf.

• Estimated gas sales for 2025: 26.2 Bcf (≈ 2% decline vs. 2024).

• Key Drivers of Reserve Decline:

• 26.2 Bcf of production in 2025.

• Only 3.5 Bcf of positive technical revisions (higher than forecasted sales).

• Licence Context:

• Songo Songo Production Sharing Agreement expires with the TPDC licence in October 2026, reducing the remaining term for reserve valuation.

• Pricing Assumptions Used by McDaniel (as of Dec‑31‑2025):

• Average gas price 2025: $5.01/Mcf (net of transportation tariff).

• Forecast 2026 Brent crude: $66.50/bbl; implied gas price $5.29/Mcf (proved) and $5.21/Mcf (proved + probable).

• Ownership Structure:

• Following the July 21 2023 repurchase of Swala’s 7.933% stake, Orca now holds 100% of PAET’s gross reserves.

• Regulatory Notes:

• Tanzanian Petroleum Act (2015) and Natural Gas Pricing Policy do not presently affect Orca’s ability to negotiate gas sales prices.

Notable Quotes

• Jay Lyons, Chief Executive Officer: “The independent evaluation underscores the impact of our production schedule and the imminent expiry of the Songo Songo licence on reserve volumes and valuation. We remain focused on optimizing remaining assets and pursuing extensions to sustain long‑term value.”