Revenue decreased by $21.0 million (57%) for Q4 2025 and by $24.4 million (22%) for the year ended December 31, 2025, compared to the same prior year periods. The decreases are primarily a result of the increase in the Tanzanian Petroleum Development Corporation's ("TPDC") share of revenue due to decreased capital expenditures and lower Cost Gas revenue recoveries by the Company as well as a lower current income tax adjustment, particularly in Q4 2025.
Gas deliveries increased by 4.0 MMcfd (6%) for Q4 2025 and by 3.0 MMcfd (4%) for the year ended December 31, 2025, compared to the same prior year periods. The increases were mainly a result of increased consumption by industrial customers due to a higher demand for services and products. Additionally, the end of the Protected Gas regime in Q3 2024 resulted in higher deliveries of Additional Gas to Tanzania Portland Cement PLC ("TPCPLC") from August 2024 onward. This was partially offset by the completion of the Julius Nyere Hydropower Project (the "JNHPP") in 2024 leading to increased availability of hydro power and causing lower lifting from power customers.
On August 7, 2024, PanAfrican Energy Tanzania Limited ("PAET") and Pan African Energy Corporation (Mauritius) ("PAEM") issued a notice of dispute (the "Notice of Dispute") in respect of an investment treaty claim against the GoT for breach of the Agreement on Promotion and Reciprocal Protection of Investment between the Government of the Republic of Mauritius and the GoT (the "BIT"), and a contractual dispute against the Government of Tanzania (the "GoT") and TPDC, for breaches of the: (i) the Production Sharing Agreement among PAET, TPDC and the GoT (the "PSA"), and (ii) the Gas Agreement among the GoT, TPDC, Songas Limited ("Songas"), and PAET (the "Gas Agreement"), for damages estimated in excess of $1.2 billion. Initial meetings with both the Advisory and Coordinating Committees were held during the week of October 14, 2024, without any resolution on the key issues in dispute. Following a period of negotiations with the GoT, on August 1, 2025, PAET issued two sets of arbitration proceedings against the GoT and TPDC registered with the International Centre for Settlement of Investment Disputes ("ICSID") for breach of the PSA and Gas Agreement respectively and PAEM issued arbitration proceedings against the GoT for breach of the BIT (the "RFAs"). The claims under the RFAs arise out of a series of actions and omissions by Tanzania and TPDC that threaten the viability of the Company's Tanzanian operations and breach multiple obligations under the BIT, PSA and the Gas Agreement. On August 28, 2025, ICSID registered all three RFAs. The proceedings under the Gas Agreement and PSA were consolidated by agreement of the parties on December 17, 2025. On February 11, 2026, the arbitral tribunal in the Gas Agreement and the PSA arbitration was constituted, and on February 13, 2026, the arbitral tribunal in the BIT arbitration was constituted. The tribunals held the first procedural hearings in the proceedings under the BIT on April 27, 2026, and in the consolidated proceedings under the Gas Agreement and the PSA on May 7, 2026.
Net income attributable to shareholders amounted to $8.8 million for the year ended December 31, 2025, compared to net loss attributable to shareholders of $21.6 million for the same prior year period. The increase is primarily a result of the reversal of loss allowance and recognition of interest income in 2025 as a result of the Tanzanian Electric Supply Company Limited ("TANESCO") paying the full amount agreed under the Settlement Agreement.
Net cash flows from operating activities increased by $57.5 million (212%) for the year ended December 31, 2025, compared to the same prior year period, mainly as a result of higher payments from TANESCO in 2025 pursuant to the Settlement Agreement.
Capital expenditure decreased by $14.0 million (94%) for Q4 2025 and by $25.9 million (94%) for the year ended December 31, 2025, compared to the same prior year periods. The capital expenditures in 2025 primarily related to the costs of flowlines replacements on the SS-5 and SS-9 wells, deferred from 2024 at the request of the GoT. The capital expenditures in 2024 primarily related to the costs of the SS-7 well workover program.
The Company exited the period with $27.4 million in working capital (December 31, 2024: $21.9 million) and cash and cash equivalents, excluding restricted cash, of $87.0 million (December 31, 2024: $90.1 million). Cash held in hard currencies (USD, Euro, GBP, CDN) was $82.8 million, as at December 31, 2025 (December 31, 2024: $87.1 million). In addition to total cash balance of $87.0 million, $24.7 million was posted as security in respect to an appeal initiated by the Company relating to a judgment received from the Tanzania High Court (Commercial Division) for a claim brought by a contractor against PAET relating to alleged losses arising from PAET's termination of a contract relating to the Company's 3D seismic acquisition program. On May 11, 2026, $19.3 million was paid in full and final settlement and the restrictions lifted on the remaining security balance of $5.4 million.
In February 2025, the Company fully prepaid the $60 million investment (the "Loan") made by International Finance Corporation ("IFC") in PAET, pursuant to a loan agreement dated October 29, 2015 between the IFC, PAET and the Company (the "Loan Agreement"). To effect the foregoing prepayment, the Company paid IFC $30.6 million, representing the aggregate outstanding principal of the Loan together with all accrued interest thereon and all other amounts owing in connection with the Loan as of February 21, 2025. As of the date hereof, the annual variable participating interest granted by PAET to the IFC under the terms of the Loan Agreement remains outstanding. Such participation interest will continue to accrue until October 15, 2026.
On April 15, 2025, PAET and TPDC signed a settlement agreement with TANESCO (the "Settlement Agreement"), for TANESCO to pay PAET $52.0 million for unpaid amounts owing by TANESCO for deliveries of natural gas from the Songo Songo gas field and late payment interest, which unpaid amounts totalled $104,164,507.41 as of January 9, 2025, comprising of $33.7 million of principal amount owing and approximately $70.5 million of default interest. The Settlement Agreement required TANESCO to pay the Tanzanian Shilling equivalent of $52.0 million, comprised of the $33.7 million principal amount and $18.3 million representing a portion of the default interest owed by TANESCO. It was agreed that the remaining balance of the default interest owing by TANESCO would be waived if TANESCO paid the settlement amount when required and in full while remaining current on amounts owed. As at December 31, 2025, TANESCO has paid the full $52.0 million due under the Settlement Agreement, and the Company has duly waived the remaining balance of the default interest owing by TANESCO. Payments on account of the settlement amount have been allocated between PAET and TPDC in accordance with the PSA. Pursuant to the PSA, the Company has retained approximately $35.4 million of the settlement amount with TPDC receiving the balance.
The TANESCO long-term receivable as at December 31, 2024 was $22.0 million and had been fully provided for. As at December 31, 2025, the Company has received all amounts due under the Settlement Agreement. Accordingly, the provision has been reversed in full and the long-term receivable balance as at December 31, 2025 is $ nil. Subsequent to December 31, 2025, the Company has invoiced TANESCO $21.6 million for Q1 2026 gas deliveries and TANESCO has paid the Company $23.8 million.
Total working interest proved conventional natural gas reserves ("1P") and total proved plus probable conventional natural gas reserves ("2P") decreased by 58% and 54%, respectively, as at December 31, 2025 compared to the prior year. The decrease was primarily attributed to 26.2 Bcf of production in 2025. The net present value of lower reserves and estimated future cash flows from 2P reserves at a 10% discount rate decreased by 51% compared to the previous year mainly as a result of lower reserves at year end 2025 and the associated reduction in the number of years outstanding on the current Songo Songo development licence.
On February 27, 2026, the Company entered into an agreement with Swala Oil and Gas (Tanzania) plc (in liquidation) ("Swala") for the withdrawal without leave to refile of Swala's proceedings against Orca, PAEM, and PAET (collectively, the "Orca Group") before the High Court of Tanzania in Case No. 11561 of 2025 (the "Tanzanian Proceedings"), and the withdrawal of the anti-suit injunction filed by the Orca Group against Swala in the High Court of England and Wales Commercial Court. The Orca Group and Swala agreed to refer any such dispute to a confidential arbitration conducted under the Arbitration Rules of the London Court of International Arbitration, with London as the place and seat of such arbitration. No provision has been recognized with respect to this matter.
On April 10, 2026 the Orca Group filed a Request for Arbitration under the LCIA Arbitration Rules (2020) pursuant to Clause 2.6 of the Settlement Deed executed on February 26, 2026 by the Orca Group and Swala, seeking declaratory and monetary reliefs against Swala and a new entity to which Swala assigned its claims. Specifically, the claimants seek declarations that the claims advanced by Swala in the Tanzanian Proceedings and assigned to the new Swala entity have no legal or factual basis and must fail. Instead, those claims are wholly speculative and vexatious and have been manufactured in an attempt to circumvent the comprehensive release contained in the related share sale agreement.
In February 2025, the Company received the Judgment (the "Judgment") from the Tanzanian High Court (Commercial Division) (the "Court") relating to the claim brought by a contractor against PAET. Pursuant to the Judgment, the Court ordered specific and general damages in the aggregate of $23.1 million, plus legal costs and interest at a rate of 7% per annum to be paid by PAET to the contractor. PAET initiated the appeal process. PAET was required to post security for the full amount of the judgment until the appeal is resolved. The appeal was heard in December 2025 and in its decision dated February 3, 2026 (the "Appeal Judgment"), the Court partially allowed the appeal. The Appeal Judgment awarded the contractor damages in the aggregate of $17.9 million, while dismissing several grounds for damages against PAET in the aggregate of $5.2 million. The Company has treated the Judgment as an adjusting event to the 2024 financial statements and recognized the resulting liability in 2024. On February 9, 2026, PAET filed an application for review of the Appeal Judgment and wrote to the Chief Justice of the Judiciary of Tanzania seeking their urgent intervention. The Company has also filed for a stay of execution of the Appeal Judgment. This review was heard in March 2026. On April 30, 2026, the result of the review was announced with all items dismissed and the award upheld. The Company recovered $17.9 million of the awarded damages from the TPDC profit share under the terms of the PSA in 2025.
On September 23, 2025, the Company declared a special dividend of CDN$1.00 per share on each of its Class A Shares and Class B Shares for a total of $14.4 million to holders of record as of September 29, 2025. The dividend was paid on October 6, 2025.
On February 9, 2026, the Company declared a special dividend of CDN$2.00 per share on each of its Class A Shares and Class B Shares for a total of $28.8 million to holders of record as of February 23, 2026. The dividend was paid on February 27, 2026.
On January 8, 2026, PAET notified the Tanzanian Petroleum Upstream Regulatory Authority ("PURA") and TPDC that the majority of PAET staff have joined the Tanzanian Union of Industrial Workers ("TUICO") and that a confidential Collective Bargaining Agreement (the "CBA") between PAET and TUICO has been executed on January 5, 2026. The CBA specifies staff benefits on individual or collective retrenchment. Whilst PAET has no existing plans for redundancies or retrenchment, the Company calculates the maximum prospective payment across all its local workforce based on 2026 staff salary levels to be circa $7 million.
On April 13, 2026, Orca announced that it had entered into a definitive Share Purchase Agreement (the "Share Purchase Agreement") with Taifa Gas Tanzania Limited ("Taifa") and Amber Energy Investment L.L.C-FZ ("Amber" and together with Taifa, the "Purchasers") pursuant to which Orca will sell all of the outstanding shares of PAEM (the "Transaction"). Upon closing of the Transaction, Taifa will acquire 49% of PAEM and Amber will acquire 51%. The SPA provides for a nominal cash price of US$10.00 for the PAEM shares, which is in addition to the other covenants, warranties, representations and obligations of the Purchasers under the agreement and the strategic and commercial benefits that would accrue to Orca by exiting its Tanzanian business. Closing of the Transaction is subject to customary and transaction-specific 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 the votes cast by Orca shareholders at the Company's annual general and special meeting of shareholders, acceptance by the TSX Venture Exchange (the "TSXV") of the Transaction and related matters requiring the TSXV's approval or acceptance, and the release of Orca from remaining guarantees and related undertakings in favor of the IFC in respect of obligations of PAEM and PAET. Any party may terminate the Share Purchase Agreement for any reason.
Financial and Operating Highlights for the Three Months and Year Ended December 31, 2025
Three Months ended December 31
% Change
Year ended December 31
% Change
(Expressed in $'000 unless indicated otherwise)
2025
2024
Q4/25 vs Q4/24
2025
2024
Ytd/25 vs Ytd/24
OPERATING
Daily average gas delivered and sold (MMcfd)
75.8
71.8
6
%
71.8
68.8
4
%
Industrial
20.2
19.7
3
%
19.7
16.1
22
%
Power
55.6
52.1
7
%
52.1
52.7
(1
)%
Average price ($/mcf)
Industrial
7.60
7.35
3
%
7.79
8.45
(8
)%
Power
3.95
3.90
1
%
3.96
3.88
2
%
Weighted average
4.92
4.85
1
%
5.01
4.95
1
%
Operating netback ($/mcf)
3.71
3.56
4
%
2.83
