Orca Energy Shares Plunge as Subsidiary Rejects Tanzania Gas License Extension and Merger is Blocked

Orca Energy Group Inc. (TSXV:ORC.A) experienced a severe decline in its share price after a series of negative regulatory and operational updates in Tanzania. The company's Class A shares plunged 67.21% to close at 20 CAD on Friday. The sell-off followed announcements that a proposed corporate merger has been blocked by Tanzanian regulators and that its local operating subsidiary has rejected the government's terms for extending its key natural gas license.

The Tanzanian Fair Competition Commission issued a notice prohibiting the merger application for Orca's proposed sale of its holding subsidiary, PAE PanAfrican Energy Corporation, to Taifa Gas Tanzania Limited and Amber Energy Investment L.L.C-FZ. While Orca stated that the transaction has not been terminated and it is assessing its options, the regulator provided no explanation for its decision to block the deal.

Simultaneously, Orca's operating subsidiary, PanAfrican Energy Tanzania Limited, rejected the Tanzanian government's proposed terms for extending the Songo Songo Development Licence. The subsidiary deemed the offered commercial and fiscal terms uneconomic and unacceptable. Consequently, the operator announced plans to cease operations at the Songo Songo gas facilities by November 29, 2026.

To prevent immediate disruption to gas consumers, the subsidiary has offered to continue running the Songo Songo facilities under the existing framework for a 60-day statutory transition period. It has proposed establishing a transition working group with local state entities to coordinate the transfer of operations. Investors will be watching for further updates on whether Orca can renegotiate the license terms, appeal the merger block, or successfully transition its Tanzanian assets.