GEEC.L Regulatory News (GEEC)

25 Jan 2006 07:00

Great Eastern Energy Corp PLC25 January 2006 PRESS RELEASE 25 January 2006 GREAT EASTERN ENERGY CORPORATION LTD COMMENCES COMMERCIAL DRILLING IN WEST BENGAL Great Eastern Energy Corporation Ltd ("Great Eastern Energy" or the "Company"),an AIM-listed company (GEEC:LN) incorporated to explore, develop, distribute andmarket Coal Bed Methane ("CBM") in India, today announced that it commencedcommercial drilling of CBM wells in West Bengal on 14th January 2006. The first well has reached a depth of 203.75 metres and the surface casing tothat depth has been set. The anticipated Target Depth of this well is around1200 metres. Great Eastern Energy has become the first company in India to commencecommercial drilling of CBM wells in India. The estimated investment outlay forthe first 100 wells is 5.75 billion Indian rupees (£73 million) Mr. Prashant Modi, Joint Managing Director of Great Eastern Energy said: "We are delighted to have begun commercial drilling of the first CBM wells in aninitial 100 well programme over a four-year period. We expect first gas salesfrom these wells to commence in Q1 2007" For further information, contact: Great Eastern Energy Company Ltd (00 91 124 258 0465)Yogendra Modi - Executive Chairman and Joint Managing DirectorPrashant Modi - Executive Joint Managing Director Arden Partners Limited (020 7398 1632)Richard Day Citigate Dewe Rogerson (020 7638 9571)Media: Martin Jackson/George CazenoveAnalysts: Nina Soon Great Eastern Energy placed 18.8m Global Depository Receipts ("GDRs") withinstitutional investors and listed on AIM in December, 2006. The notional marketcapitalisation of Great Eastern, as of January 24, 2006 is £134 million Notes to Editors Great Eastern Energy Corporation Ltd ("Great Eastern") is a public limitedcompany incorporated in India in 1992 to explore, develop, distribute and marketCoal Bed Methane (CBM) in India. The organization, headed by Mr. Y.K. Modi, isexploring & developing production wells for Coal Bed Methane in the Raniganjcoalfields, West Bengal. A pioneering initiative and a first-of-its-kind inIndia, the process would lead to demethanation of coal beds and the avoidance ofharmful methane emissions into the atmosphere - thus turning an otherwiseenvironmental hazard into a high-potential energy resource. The Company has alicence to explore for Coal Bed Methane in the 210 sq km block (approximately52,000 acres) in the Raniganj Coalfields of the Damodar Valley, near Asansol,West Bengal. It is located approximately 200 km north-west of Kolkata and isconnected by a national highway & mainline railways. The estimated gas in place in the block, as per Schlumberger's 2005 report, is1.386 TCF and the total of proved, probable and possible reserve is 817 BCF.Three pilot wells have been drilled, cased, cemented, perforated and fracturedand currently dewatering is under progress. Test sale of CBM from these threepilot wells is expected to commence shortly. The Company commenced commercialdrilling of CBM wells on 14th January 2006 and has outsourced the entireactivity of commercial drilling, wire line logging & perforation services,cementing & fracturing operations of its commercial CBM wells to three leadingcompanies namely Mitchell Drilling International Pty Ltd. (Australia), HLS AsiaLimited (a collaboration company of Halliburton Energy Services Inc., USA), andBJ Services Company Middle East Limited (a subsidiary of BJ Services Company,USA), who have vast experience in CBM projects and technology. With this, GreatEastern becomes the first Indian company to commence commercial drilling of CBMwells in India. The project plan involves drilling of 100 wells over anestimated four year period in the first phase at an estimated capital outlay of$125 million. The Company may drill more wells (possibly another 200) in thenext phases to extract further CBM reserves in the block as estimated bySchlumberger. In December 2005, the Company placed 18,803,504 Global Depositary Receipts ("GDRs") with institutional investors and joined the Alternative InvestmentMarket (AIM) of London Stock Exchange, becoming the first Indian Company to haveits primary listing on AIM. Each GDR represents 5 ordinary shares of INR 1 eachat a placing price of 101 pence (Rs. 79) per GDR. The entire paid up capital ofthe Company comprises of 544,619,499 shares, which equates to 108,923,899 GDRs.Therefore, the company's notional market capitalisation on 24 January 2006 is£134 million. This information is provided by RNS The company news service from the London Stock Exchange