Swala confirms investment discussions with Orca Exploration Group Inc.

Swala Oil and Gas (Tanzania) Plc (“Swala” or “the Company”) notes market speculation and confirms it is in discussions with Orca Exploration Group Inc. (TSX:ORC.B) (“Orca”) regarding an investment of up to US$130 million in PanAfrican Energy (“PAE”), a Mauritius-registered company that is a wholly-owned subsidiary of Orca.

The investment is envisaged as being structured in several tranches and the Company's ability to complete such an investment will depend on securing the necessary finance in each tranche. Tranche 1 has committed funding from internationally recognized global institutional investors subject to the completion of legal due diligence that is currently ongoing. The second tranche has been designed to encourage the participation of Tanzanian corporate bond investors in a manner that aims to maximize their participation alongside that of sophisticated international institutions, in line with the Company's demonstrated commitment to local involvement in the natural resources sector. The commencement of the roadshow associated with this second tranche was advised to the market on the 10th August 2017.

Dr. David Mestres Ridge, Swala CEO, said: “Orca and Swala have been discussing an investment by Swala for some time, and both were determined to structure the investment to encourage the participation of Tanzanian bond investors who are normally not able to participate in these transactions. Our intention is to construct an approach that could lead to a significant interest in the investment being indirectly held by Tanzanian investors through their ownership in Swala, an efficient alternative to stock exchange listings that we believe creates a win-win situation for the Government of Tanzania and local and foreign investors alike.”