Gas sales by Orca Exploration in Tanzania fell in the first quarter as higher than normal rainfall boosted hydropower generation.
The company said revenues had fallen by 11%, to $17.7 million, while gas deliveries were down 8%, both on a year-on-year basis. However, net income increased to $12.6mn, driven by the collection of $10.1mn in long-term arrears from Tanesco.
Orca’s sales to Tanesco, Tanzania’s state power company, fell by 11%, but were somewhat offset by sales to Tanzania Petroleum Development Corp. (TPDC) via the Mtwara-Dar es Salaam gas pipeline, which runs to the north.
“Despite the pandemic, Tanzania remains heavily reliant on the stable supply of natural gas, to ensure not only its electricity generation but also its industrial output as the country seeks to minimise the economic fallout of the virus,” said Orca’s CEO Nigel Friend.
“We are committed to ensuring not only the safety of employees, but also that there is no disruption to gas production operations at this critical time for Tanzania. To date, this has been successful, and we remain extremely vigilant.”
Gas deliveries fell to 56.3 million cubic feet (1.59 million cubic metres) per day in the quarter, versus 61.3mmcf (1.74mcm) per day.
During the first quarter, Orca continued its negotiations with suppliers of compression equipment for a contract worth an estimated $38mn. The infrastructure is expected to be installed before the end of the first quarter of 2022 and will allow production to run at 135 mmcf (3.82 mcm) per day, with the option of increasing this to 172 mmcf (4.87 mcm) per day through the pipeline to Tanzania’s north.
The long-term receivable owed by Tanesco to Orca fell to $37.3mn as of the end of March, versus $47.5mn as of the start of the year. After the period ended, Orca submitted an invoice to Tanesco of $1.6mn for gas deliveries in April and received $6.2mn.
As a result of the coronavirus outbreak, and restrictions on travel, Orca said it was pushing its AGM back, saying that it intended to hold it before the end of 2020. It had been due to be held on June 4.