TANESCO now pays PanAfrica in advance

By DAILY NEWS Reporter

TANESCO has turned the tables over its debt paying to natural gas supply from Orca Exploration by paying more than invoiced in this year. The advance payment makes the state power supply utility to have a surplus balance with Orca, the parent company of PanAfrican Energy Tanzania.

Orca said in financial results that they have invoiced TANESCO 6.2 million US dollars for 2018 gas deliveries and were paid 10 million US dollars. At the end of last year, “the current receivable from TANESCO was US$ nil” compared to 5.7 million US dollars of same period 2016.
During the year, the amounts received from TANESCO, according to Orca, were in excess of the revenue recognized for gas sales to TANESCO resulting in a deferred revenue balance of 8.4 million US dollars compared to nil amount in 2016.
This nil amount registered last year was after the reallocation of 3.8 million US dollars to net field revenue during quarter four 2017. The financial results of last year, also showed that Orca net cash flows from operating activities for the year increased by 141 per cent to 48.2 million US dollars from 20 million US dollars in the prior year, thanks to TANESCO payment.
“The increase is primarily a consequence of the continued improved collections from TANESCO since the third quarter of 2016, which is evidenced by the 8.4 million deferred revenue recorded on the statement of financial position,” the statement showed. Meanwhile, Orca’s revenue for last year has decreased by 21 per cent to 51.9 million US dollars from 65.9 million US dollars in the prior year.
The firm said the decrease was the result of recording revenue from TANESCO using the estimated collectability approach and lower sales volumes. Also Orca attributed the decrease results to lower cost gas allocations which resulted in an increase in profit gas attributable to the Tanzanian Petroleum Development Corporation (TPDC). “This was a consequence of the decline in the cost pool with the company having now recovered the cost of the 2015-2016 capital program,” Orca statement said.
Orca said the Additional Gas deliveries and sales for the year averaged 41.6 million standard cubic feet per day (MMcfd) a decrease of 7.0 per cent over 44.5 MMcfd in the prior year. The decrease in Additional Gas volumes for the year was primarily the result of reduced nominations of natural gas volumes by TANESCO.
As the results, Orca recorded a net loss of 2.5 million US dollars for the year compared to a net income of 2.2 million US dollars in the prior year. Orca, through PAET, is supplying gas to TANESCO for power production