Cash flow issues hit Orca plan

By Iain Esau London

 07 June 2012 22:59 GMT

CANADA-based Orca Exploration has deferred drilling a further development well at its Songo Songo gas field in Tanzania because its local partner is behind in its payments, writes Iain Esau.

Orca has just completed the SS-11 development well, but SS-12 has been put on hold because there is “still considerable uncertainty” over the timing of receipts from state-owned utility Tanesco, said chief executive David Lyons.

The Toronto-listed player is owed US$22.9 million by Tanesco, a situation which is causing Orca “significant cash flow challenges”.

To help alleviate this funding gap, the operator is finalising a short-term $10 million bank facility in Tanzania, but further funding will be required if Tanesco continues to be significantly in arrears.

The SS-11 well found 352 metres of total…

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