Orca Energy Group Inc. Announces 2024 Year End Audited Financial Results

Core Insights - Orca Energy Group Inc. reported a 51% increase in revenue for Q4 2024, but only a 1% increase for the full year compared to the previous year [1][4] - The company faced significant challenges due to the shutdown of the Songas Power Plant and the expiration of the Interim Power Purchase Agreement, which has adversely affected gas demand [1][8] - A high degree of uncertainty exists regarding the extension of the Songo Songo Development License, which is set to expire in October 2026 [1][10] Financial Performance - Revenue for Q4 2024 was $36.9 million, up from $24.4 million in Q4 2023, while total revenue for the year was $111.6 million, a slight increase from $110.2 million in 2023 [4][6] - The net loss attributable to shareholders for the year ended December 31, 2024, was $21.6 million, compared to a net income of $7.0 million in the prior year [4][7] - Net cash flows from operating activities decreased by 37% in Q4 2024 and by 44% for the year compared to the same periods in the previous year [4][7] Operational Highlights - Gas delivered and sold decreased by 3% in Q4 2024 and by 15% for the full year compared to the previous year [1][4] - The company recorded an asset impairment expense of $25.9 million related to the SS-7 well workover program [2][4] - Capital expenditures increased significantly, by 635% in Q4 2024 and by 244% for the year, primarily due to the well workover program [4][7] Reserves and Future Outlook - Proved conventional natural gas reserves decreased by 53% to 40 Bcf, while proved plus probable reserves decreased by 56% to 41 Bcf as of December 31, 2024 [6][7] - The net present value of the reserves at a 10% discount rate decreased by 45% compared to the previous year [6][7] - The company forecasts average Additional Gas sales for 2025 to be in the range of 70-72 MMcfd, estimated to be 4% lower than in 2024 [6][7] Regulatory and Legal Matters - The company is engaged in ongoing disputes with the Government of Tanzania and TPDC regarding the extension of the Songo Songo Development License and other contractual agreements [2][8] - A Tanzanian High Court judgment ordered the company to pay $23.1 million to a contractor, which the company is appealing [2][4] - The company has initiated discussions with the Ministry of Energy regarding the issues raised in the license extension application [2][10]