A Tanzanian-led consortium has agreed to acquire full control of the Songo Songo gas field after Orca Energy Group (TSXV: ORC.A, ORC.B) signed a definitive Share Purchase Agreement to divest its entire Tanzanian natural gas business for a nominal cash price of USD 10.
The agreement, announced on 13 April 2026, involves the sale of all outstanding shares in PAE PanAfrican Energy Corporation (PAEM), Orca’s wholly-owned Mauritian holding subsidiary, to Taifa Gas Tanzania Limited (49%) and Amber Energy Investment L.L.C-FZ (51%).
PAEM, through its subsidiary PanAfrican Energy Tanzania Limited (PAET), holds Orca’s entire interest in the Songo Songo gas field, including PAET’s rights and obligations under the production sharing agreement among PAET, the Tanzania Petroleum Development Corporation (TPDC), and the Government of Tanzania (GoT).
The Tanzania Assets—which include gas marketing agreements, project agreements, and related operational assets—represent 100% of Orca’s operating assets and business.
Why Orca Is Exiting Tanzania
The Board of Directors’ decision to exit follows what the company described as a lengthy and comprehensive assessment of the risks and challenges facing its Tanzanian operations.
Central to the decision is significant uncertainty surrounding the extension of the Songo Songo development license and production sharing agreement, with discussions still ongoing and no clarity on the outcome or terms of any renewal.
The Board determined that retaining the business would require Orca to maintain significant cash balances to address highly uncertain future commitments and contingent tax liabilities, including potentially material capital expenditures, development-related obligations, and the costs of arbitration and other litigation—the timing and outcome of which remain years away and uncertain.
Furthermore, the Board concluded that the Tanzania Assets have no material residual value in the near term, given four key factors: all geological data and information are the property of the GoT; all fixed assets owned by PAET in connection with its operations become the property of the TPDC upon expiry or termination of the Songo Songo license and production sharing agreement; the fair market value of PAET’s moveable assets is nominal; and PAET’s contingent tax and other Tanzanian liabilities are significant.
The Board therefore determined that preserving cash for shareholder distributions and divesting the Tanzanian business, together with its associated commitments and liabilities, is in the best interests of the company and its shareholders.
What the Deal Means Financially
The Share Purchase Agreement provides for a nominal cash price of USD 10 for the PAEM shares, reflecting the Board’s assessment that the assets carry no material residual value once liabilities are accounted for.
In addition to the nominal price, the agreement includes covenants, warranties, representations, and obligations from the Purchasers, as well as strategic and commercial benefits that accrue to Orca by exiting its Tanzanian business.
Under the agreement, Orca may cause its subsidiaries to repay any amounts owing to it prior to closing and, subject to applicable solvency requirements, to declare and pay dividends or other distributions before closing.
Orca also retains the right to receive 50% of certain extraordinary income realized between signing and closing.
Following closing, Orca will cease to own PAEM and PAET and will not retain any ongoing ownership interest in the Tanzanian business, other than the specific pre-closing economic entitlements provided for in the agreement.
Orca will therefore have no further interest or obligation in any favourable or adverse outcomes associated with the extension of the Songo Songo development license and production sharing agreement, or in arbitrations with the GoT.
Conditions and Approvals Required
Closing of the transaction is subject to several conditions, including approval or clearance from the Tanzania Fair Competition Commission and the Tanzanian Minister responsible for petroleum affairs, approval by a simple majority of votes cast by Orca shareholders at a special meeting to be called for that purpose, acceptance by the TSX Venture Exchange, and the release of Orca from remaining guarantees and related undertakings in favour of the International Finance Corporation in respect of obligations of PAEM and PAET.
Any party may terminate the Share Purchase Agreement for any reason.
Shaymar Limited, Orca’s major shareholder, has indicated to the Board that it intends to vote its shares in favour of the transaction.
The Purchasers are not related parties of the company or any of its insiders, associates, or affiliates as defined in TSX Venture Exchange policies, and the transaction is not a related party transaction within the meaning of Multilateral Instrument 61-101.
David Ross, Chairman of Orca, commented: “The Songo Songo project has been a landmark undertaking for Tanzania and Orca. Having been involved with the project through its inception, negotiation, execution, and development, I know the role it has played in opening Tanzania’s natural gas era, supporting the development of gas-fired power generation and industrial supply, and building a highly skilled Tanzanian workforce and broader domestic capability in the sector.”
Ross added: “We believe the time is now right for an orderly transition of the asset into its next phase. In Taifa and its partners, we see a buyer group with the operating presence, sector focus and long-term commitment to Tanzania that can take the project forward.”
Rostam Azizi, Chairman of the Taifa Group, said: “This deal is a pivotal moment for Tanzania. We have worked diligently over several years to make this a reality, and we are proud that Taifa will now play a significant role in shaping the future of our nation’s energy landscape.”
Azizi added: “Songo Songo creates real value for Tanzania—government revenues, domestic energy supply, employment, skills development, local procurement and long-term investment. Greater Tanzanian ownership builds on those benefits, deepens industrial capacity and keeps profit in country, creating wealth for everyone.”
He further stated: “I hope this transaction encourages broader Tanzanian participation in the extractive sector, and that development continues, by the Government of clear, practical frameworks that promote investment, support viable projects and strengthen local capacity alongside long-term investment partners.”
Tanzania’s Songo Songo Gas Field
The Songo Songo gas field is located on and offshore Songo Songo Island, approximately 15 kilometres from the Tanzanian mainland and around 200 kilometres south of Dar es Salaam.
It was Tanzania’s first natural gas development and remains one of the country’s most important energy assets, currently accounting for approximately 54% of the country’s daily gas output.
The field holds total proved and probable reserves of 293 billion cubic feet, with a productive capacity of approximately 165 million standard cubic feet per day.
The infrastructure includes a gas processing facility with a capacity of 110 million cubic feet per day, a 25-kilometre 12-inch offshore pipeline, and a 207-kilometre 16-inch onshore pipeline that transports processed gas to Dar es Salaam, where it supplies power generation plants and industrial customers.
In 2001, Tanzania granted the Songo Songo Development License to the TPDC for an initial term of 25 years, expiring in 2026. Orca Energy has operated the field through PAET since 2004.
In August 2025, Orca filed three arbitration claims with the International Centre for Settlement of Investment Disputes (ICSID) against the GoT and the TPDC over the Songo Songo Gas-to-Electricity Project, alleging breaches of the production sharing agreement, gas agreement, and the Mauritius-Tanzania Bilateral Investment Treaty, including licence delays and forced subsidised gas supply after 31 July 2024.
With the license set to expire in October 2026, no resolution on the extension terms, ongoing ICSID arbitration, and significant contingent liabilities, Orca’s Board concluded the assets had no material residual value and opted to divest.
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