28 Jul 2014 07:00
28 July 2014
Great Eastern Energy Corporation Limited
("Great Eastern" or "the Company")
Full Year Results Year ended 31 March 2014
Great Eastern Energy Corporation Limited (LSE: GEEC), the fully integrated, leading Indian Coal Bed Methane (CBM) Company, is pleased to announce its Preliminary Results for the 12 months ended 31 March 2014.
Highlights
Financials:
· Total revenue increased by 18% to US$ 34.44m (2013: US$ 29.18m)
· On a constant currency basis total revenue increased by 31% to Rs. 2,084m (2013: Rs. 1,589m)
· EBITDA increased by 28% to US$ 23.92m (2013: US$ 18.69m)
· On a constant currency basis EBITDA increased by 42% to Rs. 1,447m (2013: Rs. 1,018m)
· Cash Profit increased by 36% to US$ 17.90m (2013: US$ 13.13m)
· On a constant currency basis Cash Profit increased by 51% to Rs. 1,083m (2013: Rs. 715m)
· PAT pre MTM / DTE* increased by 45% to US$ 14.50m (2013: US$ 10.01m)
· On a constant currency basis PAT pre MTM / DTE* increased by 61% to Rs. 877m (2013: Rs. 545m )
· PAT post MTM / DTE* increased by 37% to US$ 10.20m (2013: US$ 7.42m)
· On a constant currency basis PAT post MTM / DTE* increased by 53% to Rs. 617m (2013: Rs. 404m)
· The Company has a net debt of US$ 110.89m as at 31 March 2014
*
MTM (Mark to Market) is on account of the restatement of the foreign currency loans and derivatives
DTE (Deferred Tax Expense) is on account of difference in depreciation rates used for financial accounts and tax accounts and other expenses like exchange fluctuation / MTM.
Raniganj (South) Block:
· Sales increased by 25% to 3.33 bcf this year compared with 2.68 bcf in the previous year
· Sales for the period April 2014 - July 2014 increased by 39% to 1.28 bcf (April 2013 - July 2013: 0.92 bcf)
· Average sale for July 2014 increased to 10.80 mmscfd, up 45% from July 2013
· Production capacity increased to 21.86 mmscfd, up 26% from as announced on 10 June 2013
· A total of 156 wells drilled
· As per the advice of Advanced Resources International, Inc. (ARI), the Company, will optimize the internal pipeline network and resolve the pump issues in deviated wells before drilling further
· Furthermore, for the IPO object clause, land has to identified in advance as per law and the Company cannot drill on the those lands until the completion of the IPO
Mannargudi Block:
· Approvals awaited from the State Government
· Minimum work program consists of 30 pilot production wells and 50 core holes
Raniganj (North) Block:
In May 2013, Oil and Natural Gas Corporation Ltd. ("ONGC") awarded a 25% Participating Interest in Raniganj (North) Block, which is adjacent to our Raniganj (South) Block. This is subject to execution of Farm-in related, and Joint Operatorship agreements with ONGC (along with its consortium), which are currently under negotiation, and the approval from the Government of India.
Market:
· Great Eastern continues to supply to its existing customers while adding further new industrial customers
· 42.57 mmscfd gas under contract / MOU, an increase of 5.4% over the year
Outlook
· Commence work on the Mannargudi Block once approvals received
· Finalise agreements and procure approvals for the Raniganj (North) Block
· 144 wells planned to be drilled on the Raniganj (South) Block
· Listing of equity shares of the Company on Indian Stock Exchanges, subject to regulatory approvals and market conditions
Indian Economy
§ India's macro-economic stability improving
§ GDP growth rate set to recover to 5.9% in 2014-15. New government expects growth rate to touch 7% - 8% in 2 years
§ Twin deficits - fiscal and current account - are down. Targeted at 4.1% and 2.5% of GDP respectively
§ Inflation is trending downwards
§ Budget has reassured investors: Hon'ble Finance Minister said that no retrospective tax amendments will be done to create new demand
§ Global investors are bringing in large funds into India
§ As per the Nielsen Global Survey of Consumer Confidence and Spending Intentions, consumer confidence level in India jumped by seven points during the second quarter of this year bringing India at the top position globally with the change in government at the Centre
§ As per the Federation of Indian Chamber of Commerce and Industry (FICCI) CEOs Poll, July 2014, about half of the CEOs who took part in the survey indicated that they propose to increase their investments in near future
Prashant Modi, President and COO of Great Eastern, said:
"The revenues, sales volume, and profitability continue to show good growth. We have plenty to do with our current producing acreage and we are looking forward with confidence. With finalisation of the agreements for the Raniganj (North) Block and approval awaited from the State Government for our other Mannargudi Block we look forward to commencing work on those blocks."
IPO Disclaimer: http://www.geecl.com/disclaimerClause.html
For further information please contact:
Great Eastern Energy
Yogendra Kr. Modi Chairman & CEO +44 (0)20 7614 5917
Prashant Modi President & COO
Goldman Sachs International
Alastair Maxwell +44 (0)20 7774 1000
Duncan Stewart
Arden Partners
Christopher Hardie +44 (0)20 7614 5900
Katelin Kennish
Macquarie Capital (Europe) Limited
Steve Baldwin +44 (0)20 3037 2362
Chairman's Statement
Financials
In the 12 months to 31 March 2014 Great Eastern made material progress across the business, delivering significant growth in production, revenue, and profit.
Total revenue increased by 18% to US$ 34.44m as compared to the corresponding previous financial year, while EBITDA increased by 28% to US$ 23.92m. On a constant currency basis, total revenue has increased by 31% to Rs. 2,084m and EBITDA increased by 42% to Rs.1,447m. The Company has a net debt of US$ 110.89m as at 31 March 2014 with a Debt:Equity ratio of 1.39 against 1.42 as at 31 March 2013.
Sales increased by 25% to 3.33 bcf this year compared with 2.68 bcf in the previous year, and sales for the period April 2014 - July 2014 increased by 39% to 1.28 bcf (April 2013 - July 2013: 0.92 bcf)
The supply and demand dynamic for Indian gas, and the pricing environment, remains extremely attractive and is likely to remain so for some years to come.
Reserves, Drilling & Production
In March 2014 we announced an increase in our reserve numbers, as provided by independent reserve engineers Advance Resources International, Inc. (ARI). There has been an increase of 1.70% in Original-Gas-In-Place (OGIP) to 2.44 TCF from 2.40 TCF, an increase of 4.60% in gross Proven, Probable and Possible reserves (3P) and an increase of 34% in 2P reserves from February 2013.
We continue to make progress in production and sales ramp-up. A total of 156 wells have now been drilled at our Raniganj (South) block, with a total of 149 wells dewatering / producing gas, a 17% increase over the corresponding period in the last year.
The Company has been awarded a 25% Participating Interest in Raniganj (North) Block which was offered by ONGC through a competitive bidding process initiated in January, 2013. The current operator of this block is ONGC. The Gas-in-Place in the entire Raniganj (North) Block as per the Directorate General of Hydrocarbons (DGH) is 1.5 TCF as of 6 February 2003. The Farm-in related Joint Operatorship agreements are under negotiation and thereafter it is subject to the approval from the Government of India.
Sales, Marketing, & Distribution
Since May 2013 additional contracts were signed for 2.20 mmscfd. In total, the Company has 42.57 mmscfd of gas under contract / MOU. This represents an increase of 5.4% over the year.
Great Eastern is well placed to supply gas in and around highly industrialised region of Asansol-Raniganj-Durgapur through our own dedicated pipeline network.
Mannargudi CBM Block
The Mannargudi Block covers an effective area of 667 sq. km. and is located in the southern part of the country.
The Company has received the Environment Clearance and approval is awaited from the State Government of Tamil Nadu. Work will start after the receipt of the requisite approvals.
Indian IPO
Subject to receipt of requisite approvals, market conditions and other considerations, the Indian IPO is being conducted in order to raise further funds for the Company, for drilling and completion of CBM wells in the Raniganj (South) Block.
The Company has received final observations on the DRHP from SEBI and the roadshows are underway.
CSR
Great Eastern has contributed towards improving the environment in this area through substitution of polluting fuels with the use of clean energy. We also sponsor a number of medical camps, blood donation camps, sporting activities, and community health initiatives in the region.
Great Eastern views itself as an integral part of the community in which it works, with the business designed to not only create value for the company but also to make a positive contribution to the sustainable development of the local area.
I would like to thank our management team and all personnel for their on-going contribution to our continuing success.
Outlook
We are well placed to build on the success of the 12 months to 31 March 2014. We will endeavour to drive production / sales growth in the Raniganj (South) Block through the optimisation process undertaken by the Company and further drilling.
We look forward to commencing work at the Mannargudi Block post the receipt of approvals, and being selected as the preferred bidder by ONGC on the Raniganj (North) block brings in another encouraging area of development into our operations.
With the new Government in place, we are confident that the general economic conditions will improve thereby giving a new impetus to growth.
To view the tables please use the following link:
http://www.rns-pdf.londonstockexchange.com/rns/4443N_-2014-7-27.pdf