Orca Exploration announces update on the drilling of Elsa 2 in Italy

TSX-V: ORC.A, ORC.B

TORTOLA, British Virgin Islands, July 5 /CNW/ - During May 2010, Orca Exploration Group Inc ("Orca" or the "Company") signed an agreement with Petroceltic International plc ("Petroceltic") to farm in for 15% of Petroceltic's Central Adriatic B.R268.RG Permit offshore Italy.

On June 30, 2010, the Italian Minister of Environment, Stafania Prestigiacomo, announced at a conference in Rome that an outline proposed decree to amend the Italian Environmental Code had been adopted by the Council of Ministers that will inter alia prohibit drilling in the Italian seas within 5 miles of the coastline and within 12 miles around the perimeter of protected Marine Parks.

Orca understands that should this restriction be passed into law it will apply to applications for permits currently pending and is likely to include the current location for Elsa 2.

The Elsa structure straddles the proposed 5 mile restriction and therefore the operator is considering alternative well locations on the structure outside of the proposed 5 mile boundary that will enable it to access the same or similar downhole locations. The well was due to be drilled in Q4 2010, but drilling will now be delayed while the technical and legislative issues are resolved. Orca is not liable for any costs associated with the drilling of Elsa 2 until a rig contract is signed.

The Elsa field was discovered in 1992 by AGIP with the drilling of the Elsa 1 well which encountered an oil column of 65 meters in the Lower Cretaceous Maiolica Formation at a depth of approximately 4,500 meters. The low risk Elsa 2 appraisal well has the primary objective of confirming the commercial production potential of the reservoir when flow tested. Positive results from Elsa 2 will be followed by a 3D seismic survey over the field.

Orca is an international public company engaged in hydrocarbon exploration, development and supply of natural gas in Tanzania and the development of high potential oil exploration and production opportunities in Europe, the Middle East and Africa. Orca Exploration trades on the TSX Venture Exchange under the trading symbols ORC.B and ORC.A.

Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward Looking Statements

This disclosure contains certain forward-looking estimates that involve substantial known and unknown risks and uncertainties, certain of which are beyond Orca Exploration's control, including the impact of general economic conditions in the areas in which Orca Exploration operates, civil unrest, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. In addition there are risks and uncertainties associated with oil and gas operations, therefore Orca Exploration's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking estimates and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking estimates will transpire or occur, or if any of them do so, what benefits, including the amounts of proceeds, that Orca Exploration will derive therefrom.

For further information: W. David Lyons, Chairman and CEO, [phone], [email protected]; Nigel A. Friend, CFO, [phone], [email protected]