Mr. Jay Lyons reports

ORCA ENERGY GROUP INC. ANNOUNCES INDEPENDENT RESERVES EVALUATION FOR YEAR END 2023

Orca Energy Group Inc. has received approval for its independent reserves evaluation as at Dec. 31, 2023. All currency amounts in this news release are in U.S. dollars unless otherwise stated.

INDEPENDENT RESERVES EVALUATION

The Company's conventional natural gas reserves as at December 31, 2023 for the period to the end of the primary 25-year term of the production sharing agreement (the "Songo Songo PSA") with the Tanzanian Petroleum Development Corporation (the "TPDC") have been evaluated by independent petroleum engineering consultants McDaniel & Associates Consultants Ltd. ("McDaniel") in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook") and National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). The Songo Songo PSA expires upon the expiry of TPDC's Songo Songo licence in respect of the Songo Songo gas field (the "Songo Songo Licence") in October 2026. The preparation date of the independent reserves evaluation prepared by McDaniel is February 1, 2024 and the effective date of the evaluation is December 31, 2023 (the "McDaniel Report").

All of the Company's reserves are located in Tanzania. Reserves included herein are stated on a Company gross reserves basis unless noted otherwise. Company gross reserves are the total of the Company's working interest share in reserves before deduction of royalties owned by others and without including any royalty interests of the Company, and are based on the Company's 100 percent ownership interest in the reserves following the 2023 transaction with Swala Oil & Gas (Tanzania) plc ("Swala") described in Note 3 to the tables below.

The Company's Board of Directors has reviewed and approved the McDaniel Report. Additional reserves information required under NI 51-101 is included in Orca's reports relating to reserves data and other oil and gas information under NI 51-101, which will be filed on its profile on SEDAR+ at www.sedarplus.ca. The following discussion is subject to a number of cautionary statements, assumptions, contingencies and risks as set forth in this news release.

HIGHLIGHTS

• Total Proved ("1P") Gross Company conventional natural gas reserves at year ended December 31, 2023, were 85 billion standard cubic feet ("Bcf") compared to 141 Bcf at year end 2022, representing a 40% decrease.
• Total Proved plus Probable ("2P") Gross Company conventional natural gas reserves at year ended December 31, 2023, were 94 Bcf compared to 167 Bcf at year end 2022, representing a 44% decrease.
• The reduction in Gross Company 1P reserves from year end 2022 to year end 2023 was primarily attributed to 2023 production, declining reservoir pressures, removal of development capital and the number of years remaining on the current term of the Songo Songo Licence.
• The reduction in Gross Company 1P reserves was partially offset by the 2023 acquisition of a 7.933% interest from Swala which increased the Company's working interest share to 100% in the Songo Songo reserves.
• The Company estimated gas sales of 31 Bcf in 2023, representing an increase of approximately 7% compared to year end 2022. This level of sales has resulted in accelerated natural pressure declines in the core compartments of the Songo Songo gas field over what was forecasted at the beginning of 2023.
• In April 2023 PAET requested TPDC to apply for an extension to the Songo Songo Licence, as they are obliged to do under the terms of the Songo Songo PSA. Grant of an extension will enable ongoing investment to continue which will sustain production from existing compartments and bring additional pools in the field into production. Unfortunately, it appears as though TPDC has not made the application as at the date of the press release. Given the uncertainty associated with the extension of the Songo Songo Licence, it has been necessary to remove approximately US$55million of future development capital from the 2023 year end 1P reserve evaluation, as the associated projects are no longer economic in time remaining on the development licence (2.8 years from year end 2023). On this basis, the respective reserves associated with the removal of development capital have been reclassified as contingent resources pending receipt of a licence extension beyond October 2026 as provided for in The Petroleum Act, 2015 (the "Act").
• Net present value of 1P future net revenue discounted at 10% was $108.4 million at year end 2023, compared to $147.2 million at year end 2022, representing a 26% decrease.
• Net present value of 2P future net revenue discounted at 10% was $118.7 million at year end 2023, compared to $170.7 million at year end 2022, representing a 30% decrease.
• The 26% reduction in net present value of 1P future net revenues from year end 2022 to year end 2023 was primarily attributed to lower reserves at year end 2023 and the associated 26% reduction in the number of years outstanding on the current Songo Songo Licence. The net present value impact of reserves reclassified to contingent resources was minimal due to the reduction in associated future development capital.

The following tables outline the Company's conventional natural gas reserves as at December 31, 2023 and the net present value of future net revenue attributable to such reserves as evaluated in the McDaniel Report utilizing McDaniel's forecast price and cost assumptions to the end of the Songo Songo Licence term in October 2026.

Notes:

During the third quarter of 2015, the Act was passed into law by Presidential decree. The Act repeals earlier legislation, provides a regulatory framework over upstream, mid-stream and downstream gas activity, and as well consolidates and puts in place a single, effective and comprehensive legal framework for regulating the oil and gas industry in Tanzania. The Act also provides for the creation of an upstream regulator, the Petroleum Upstream Regulatory Authority. The mid and downstream petroleum as well as gas activities are proposed to be regulated by the current authority, the Energy and Water Utilities Regulatory Authority ("EWURA"). The Act also confers upon on the TPDC the status of the National Oil Company, mandated with the task of managing the country's commercial interest in the petroleum operations as well as mid and downstream natural gas activities. The Act vests TPDC with exclusive rights in the entire petroleum upstream value chain and the natural gas mid and downstream value chain. However, the exclusive rights of TPDC do not extend to mid and downstream petroleum supply operations. The Act does provide grandfathering provisions upholding the rights of the Company under the Songo Songo PSA as it was signed prior to the passing of the Act.

On October 7, 2016, the Government of Tanzania issued the Petroleum (Natural Gas Pricing) Regulation made under Sections 165 and 258 (1) of the Act (the "Natural Gas Pricing Policy"). Article 260(3) of the Act preserves the Company's pre-existing right with TPDC to market and sell natural gas together or independently on terms and conditions (including prices) negotiated with third party natural gas customers. To date, the Natural Gas Pricing Policy has not impacted the Company's ability to market and sell natural gas at prices freely negotiated with natural gas customers. The future impact of the Natural Gas Pricing Policy, if any, cannot be determined at this time.

On January 16, 2018, Orca sold (the "First Swala Transaction") 7.933 percent of the Class A common shares (7,933 Class A common shares) of its wholly owned subsidiary PAE PanAfrican Energy Corporation ("PAEM"), a Mauritius registered Company and sole shareholder of PAET, a Jersey registered Company, to a wholly owned subsidiary of Swala. The Songo Songo PSA is held by PAET. While Swala had no management or control of PAEM and no shareholding in, or management or control of PAET, the McDaniel Report was previously prepared based on Orca's ownership of 92.07 percent of PAET's gross reserves. On July 21, 2023, the Company repurchased (the "Second Swala Transaction") the 7.933% shares in PAEM eliminating Swala's interest in the reserves. Accordingly, the 2023 McDaniel Report is prepared based on Orca's ownership of 100% of PAET's gross reserves.

"Company Gross Reserves" are the total of the Company's working interest share in reserves before deduction of royalties owned by others and without including any royalty interests of the Company.

"Company Net Reserves" are the total of the Company's working interest share in reserves after deducting the amounts attributable to royalties and Profit Gas owned by others (as defined in the PSA), plus the Company's royalty interests in such reserves.

Company Gross and Net Reserves are based on the Company's 100 percent ownership interest in the reserves following the Second Swala Transaction.

McDaniel employed the following gas sales, pricing and inflation rate assumptions as of December 31, 2023 in estimating the Company's reserves data using forecast prices and costs. The Company received an average gas price of $4.52/Mcf in 2023 and $4.16/Mcf net of the transportation tariff imposed by Songas Limited as determined by the energy regulator, EWURA.

The price of gas for the Industrial sector is based on a formula related to discounts to heavy fuel oil prices and includes caps and floors. This has been reflected in the above pricing.

Orca Energy Group Inc.

Orca is an international public company engaged in natural gas development and supply in Tanzania through its subsidiary PAET. Orca trades on the TSX Venture Exchange under the trading symbols ORC.A and ORC.B.

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