05:00 PM EDT, 11/01/2024 (MT Newswires) -- Orca Energy Group (ORC.A, ORC.B) after trade Friday said its PanAfrican Energy Tanzania unit on Wednesday learned from Songas Limited that an interim power purchase agreement was to expire on Thursday.

At that time, Songas was to shut down the Songas power plant, and Orca said "it is unclear how long this shutdown will last". If a new agreement is not reached, the plant may shut down indefinitely, affecting gas demand from the Songo Songo gas field, the company added.

Production guidance for the annual average additional gas sales is now estimated at 65-68 million cubic feet per day, excluding volumes previously expected to be supplied to Songas and excluding certain other volumes. The Songo Songo gas field continues to operate normally, the company noted.

The company also said that during the third quarter, it completed a production and logging program in three wells, and a workover program on well SS-7 is underway, aiming to restart production by November. The total cost of this project has risen to $22 million from $16.6 million due to logistical and weather delays.

The company added that it will have meetings in November or December to discuss issues including an investment treaty claim against the Government of Tanzania and a contractual dispute with Tanzania Petroleum Development Corporation.