Orca Energy Group Inc. Announces Outcome of Contractor Dispute Appeal

Orca Energy Group Inc., a company engaged in natural gas development in Tanzania, has reported a significant update regarding its ongoing legal dispute with African Geophysical Services LLP (AGS). Following a judgment issued by the High Court of Tanzania in February 2025, Orca's subsidiary, PanAfrican Energy Tanzania Limited (PAET), was ordered to pay AGS a total of US$23,100,451 in damages, along with interest and legal costs. This judgment led to a financial liability that Orca recognized in its 2024 financial statements.

In response, PAET filed an appeal against the High Court's ruling, necessitating the posting of court-ordered security for costs. On February 3, 2026, the Court of Appeal of Tanzania issued a partial ruling on the appeal, significantly reducing the damages owed to AGS to US$17,912,445 by dismissing a portion of the claims totaling US$5,125,006.

Orca is currently examining the details of the Appeal Judgment to fully understand its implications both financially and legally. The company has emphasized its commitment to protecting its interests and those of its stakeholders, suggesting that further legal options may be explored. Furthermore, Orca has indicated that it will assess whether additional disclosures relating to the Appeal Judgment are appropriate, contingent on board discussions.

Trading on the TSX Venture Exchange under symbols ORC.A and ORC.B, Orca remains a prominent player in the Tanzanian natural gas sector, actively working through challenges such as this legal dispute to sustain its operational footprint. For investor inquiries, Orca’s executive team is available via contact details provided in their announcement.

Orca Energy Group Inc. (TSX-V: ORC.A, ORC.B) recently announced a significant development in its ongoing legal battle with African Geophysical Services LLP (AGS). The judgment from the Court of Appeal in Tanzania has resulted in a revised damages award of approximately US$17.9 million, a reduction from the original US$23.1 million set by the High Court. This partial victory is noteworthy, but investors should proceed with caution.

Initially, Orca had to post security costs amounting to the full judgment while appealing, which has resulted in a notable financial liability for the company. With the adjusted liability still substantial, Orca’s ability to navigate this financial obligation in the context of its overall operational strategy must be closely monitored. The ongoing legal review to assess the implications of this judgment will likely impact cash flow and investment decisions in the near term.

Despite these challenges, investors should consider Orca's long-term prospects in the Tanzanian natural gas market. The company's core operations have the potential for sustainable growth, facilitated by the increasing demand for energy resources in the region. However, the recent legal setback demonstrates that operational performance can be jeopardized by external factors, such as legal disputes.

In light of the appeal outcome and associated financial implications, a cautious approach would be recommended for prospective investors. Current shareholders might want to reassess their positions based on these developments. Investors should closely monitor Orca's legal evaluations and strategic responses, as well as broader market trends in natural gas. Given the fluctuating nature of the legal environment and operational risks, it's prudent to adopt a wait-and-see strategy until clearer insights into the company’s trajectory emerge.