Mr. Jay Lyons reports

ORCA ENERGY GROUP PROVIDES UPDATE ON SONGO SONGO LICENCE, OPERATIONS, AND THE PROPOSED TRANSACTION

Orca Energy Group Inc. has provided an update regarding a proposed extension of the Songo Songo development licence, related operational matters concerning PanAfrican Energy Tanzania Ltd., and the company's previously announced proposed transaction involving Taifa Gas Tanzania Ltd. and Amber Energy Investment LLC-FZ (the purchasers). The company also notes that, on Oct. 5, 2026, the Fair Competition Commission of Tanzania issued a notice prohibiting the merger application relating to the proposed transaction.

Proposed licence extension

On Oct. 1, 2026, the Minister of Energy of Tanzania issued a notice of intention to grant an extension of the licence to the Tanzania Petroleum Development Corp. and PAET, which provided proposed terms and conditions for such an extension. The MoE's notice contemplates a statutory process under which a response is required within 60 days and states that rights and obligations under the existing licence and the production-sharing agreement continue during that process.

On Oct. 9, 2026, PAET responded to TPDC and advised that it rejects the proposed extension terms, on the basis that the proposed commercial and fiscal terms are uneconomic and unacceptable. PAET also advised that its response does not constitute acceptance of the proposed extension terms and that it reserves its rights and remedies under applicable agreements, law and continuing arbitration proceedings.

Songo Songo operations

PAET has advised TPDC and the MoE, notwithstanding its rejection of the proposed licence extension terms, that it is willing to continue operating the Songo Songo facilities under the existing licence and PSA framework to ensure that gas continues to flow to customers for the duration of the applicable 60-day statutory period to support an orderly transition of operations to TPDC and Songas Ltd. PAET has proposed the establishment of a transition working group involving PAET, TPDC and Songas to co-ordinate transition planning and operational readiness activities. PAET has also advised that it intends to cease operating the Songo Songo facilities by Nov. 29, 2026, or earlier if TPDC and Songas confirm operational readiness.

Proposed transaction

As previously disclosed, Orca entered into a sale and purchase agreement with the purchasers on April 10, 2026, pursuant to which Orca agreed to sell all of the outstanding shares of PAE PanAfrican Energy Corp., Orca's Mauritian holding subsidiary through which Orca indirectly owns PAET. On Oct. 5, 2026, the FCC issued a notice prohibiting the merger application relating to the proposed transaction. The FCC's notice provided no additional information regarding how or why the FCC took the decision to prohibit the merger application. The proposed transaction has not been terminated. Orca is seeking additional information and analyzing the implications of the FCC decision while assessing its options with respect to the proposed transaction and will provide further updates as appropriate.

About Orca Energy Group Inc.

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

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