Orca Bows Out of Uganda Drilling Program to Focus on West Africa

Orca Exploration Group Inc. announced that following completion of the technical review of data on Uganda Exploration Area 5 ("EA5"), it has elected not to exercise the Option to earn 50% by committing to a drilling program, and therefore has no further interest in this opportunity.

The data recently acquired on EA5, including 2D seismic, was processed and interpreted. Although a number of structures were imaged, other aspects indicated that the level of risk was higher than expected and did not warrant the costs of drilling. This opportunity was always regarded by Orca as medium to high risk, and would only proceed from the seismic phase to the drilling phase if the seismic and other data acquired had the effect of reducing risk by identifying acceptable prospects.

Funds released from the Uganda program will now be more effectively used for progressing the planned drilling of Songo Songo West in 2009, which is regarded by Orca as lower risk with higher upside than Uganda EA5, and with the advantage of later full cost recovery from the Songo Songo PSC cost recovery pool, thereby reducing financial risk. Orca has progressed drilling plans, identified suitable offshore jackup rigs available in the right timeframe, and is embarking on a rig tender process for two to three wells.

A substantial portion of drilling materials for this program is already stockpiled on Songo Songo island. Discussions are also under way to secure gas markets in the near term for this potentially large resource adjacent to the Songo Songo field. Plans for development of a discovery at Songo Songo West will also be progressed. An independent resource assessment of Songo Songo West is in process, the results of which will be announced when completed.

Orca is committed to utilizing available working capital and strong cash flow to build maximum shareholder value at minimal risk in sub-Saharan Africa. To this end, Orca is also evaluating an opportunity offshore West Africa, which is currently regarded as lower risk with higher potential and earlier commercialization than EA5.