Orca Exploration Group Inc. Announces 2019 Year End Audited Financial Results

TORTOLA, British Virgin Islands, April 28, 2020 (GLOBE NEWSWIRE) — Orca Exploration Group Inc. (“Orca” or “the Company” and includes its subsidiaries and affiliates) (TSX-V: ORC.A, ORC.B) today announces its audited financial results for the year ended December 31, 2019. All dollar amounts are in United States dollars unless otherwise stated.
Revenue for 2019 increased by 48% to $85.6 million and 72% to $23.2 million for Q4 2019 over the comparable prior year period. The increases are primarily due to increased sales to the Tanzanian Electric Supply Company Limited (“TANESCO”), sales to the Tanzanian Production Development Corporation (“TPDC”) under the new long-term gas sales agreement (“LTGSA”), a greater percentage of profit share and a positive current income tax adjustment as a consequence of higher revenues. Gas deliveries for 2019 and Q4 2019 increased 58% over the comparable prior year period. The increase in gas deliveries is primarily the result of increased nominations of gas volumes by TANESCO and TPDC through the National Natural Gas Infrastructure (“NNGI”). The increase in volumes was partially offset by a decrease in the weighted average gas price of 15% for the year and 16% for Q4 2019 compared to the same prior year period.Net income attributable to shareholders increased by 86% to $24.7 million for 2019 and by 349% to $12.3 million for Q4 2019 over the comparable prior year period. The increases are primarily due to the increase in revenue partially offset by the increase in depletion expense due to increased gas volume deliveries.Net cash flows from operating activities for 2019 increased by 21% to $34.9 million and 26% to $5.2 million for Q4 2019 over the comparable prior year period. The increases are primarily a result of the increase in net income and the positive impact on cash flow when adjusting net income by the increase in depletion being offset by the changes in non-cash working capital primarily due to the increase in prepayments and a decrease in trade and other payables when compared to the same prior year period.Adjusted funds flow from operations ⁽¹⁾ for 2019 increased by 124% to $43.2 million and by 112% to $13.6 million for Q4 2019 over the comparable prior year period. The increases are mainly due to the increase in net cash flows from operating activities adjusted for the change in non-cash working capital.The Company exited 2019 in a stable financial position with $107.0 million in working capital (December 31, 2018: $84.2 million), cash and short-term investments of $138.7 million (December 31, 2018: $131.5 million) and long-term debt of $54.1 million (December 31, 2018: $53.9 million). As at December 31, 2019 the current receivable from TANESCO was $ nil (December 31, 2018: $ nil). TANESCO’s long-term trade receivable as at December 31, 2019 was $47.5 million with a provision of $47.5 million compared to $58.5 million (provision of $58.5 million) as at December 31, 2018. Subsequent to December 31, 2019 the Company has invoiced TANESCO $4.9 million for 2020 gas deliveries and TANESCO has paid the Company $18.1 million.On February 25, 2020 the Company declared a dividend of CDN$0.06 per share on each of its Class A Common Voting Shares (“Class A Shares“) and Class B Subordinate Voting Shares (“Class B Shares“) for a total of $1.2 million to the holders of record as of March 31, 2020 to be paid on April 30, 2020.On March 12, 2020 the Company announced the completion of its substantial issuer bid where it took up and paid for 7,692,297 Class B Shares at CDN$6.50 per Class B Share. The aggregate purchase price of the Class B Shares totaled CDN$50.0 million representing 23.6% of Orca’s issued and outstanding Class B Shares and 22.4% of the total number of Orca’s issued and outstanding shares.On April 7, 2020 the Company announced that it had amended its normal course issuer bid commenced on June 14, 2019 (the “NCIB“) to allow it to purchase additional Class B Shares. Additional purchases made pursuant to the NCIB will not exceed 700,000 Class B Shares, representing not more than 5% of the issued and outstanding Class B Shares as at June 14, 2019 (33,505,915 Class B Shares) less 933,028 Class B Shares already purchased under the NCIB. The NCIB will be in effect until the earlier of the purchase of the maximum number of Class B Shares under the NCIB and June 14, 2020.
Financial and Operating Highlights for the Three Months and Year Ended December 31, 2019
Nigel Friend, Chief Executive Officer, commented:
“2019 saw Orca’s strongest financial performance since the business was founded. Orca achieved revenue growth of 48% to $85.6 million, enabling us to finish the year with $107 million in working capital.  This strong financial position allowed us to declare dividends of $6.0 million in 2019 and to conduct $42.2 million of share buybacks including the substantial issuer bid in March 2020.Given the strength of our balance sheet, solid production at Songo Songo and the fixed price we receive for our gas, insulating us from the recent price volatility, we are well placed to weather the uncertainty currently gripping the market.”The complete Audited Consolidated Financial Statements and Notes and Management’s Discussion & Analysis may be found on the Company’s website www.orcaexploration.com or on the Company’s profile on SEDAR at www.sedar.com.