GEEC.L Regulatory News (GEEC)

29 October 2012

Great Eastern Energy Corporation Limited

("Great Eastern" or "the Company")

Interim Results

For the six months ended 30 September 2012

Great Eastern Energy Corporation Limited (LSE: GEEC), the fully integrated, leading Indian Coal Bed Methane (CBM) company, is pleased to announce its Interim Results for the six months ended 30 September 2012.

Highlights

Financials:

·; Total revenue increased by 29% to US$ 14.71m (Six month period year ended 30 September 2011: US$ 11.42m)

·; EBITDA increased by 48% to US$ 9.99m (Six month period ended 30 September 2011: US$ 6.77m)

·; PAT [pre MTM*] increased by 165% to US$ 5.73m (Six month period ended 30 September 2011: [pre MTM*] of US$ 2.16m)

·; PAT [after MTM*] US$ 4.03m (Six month period ended 30 September 2011: loss [after MTM*] of US$ 4.92m)

·; On a constant currency basis total revenue has increased 56% to Rs. 805m (Six month period ended 30 September 2011: Rs. 517m)

·; The Company has a long term debt of US$ 94.94m as at 30 September 2012

* MTM (Mark to Market) is on account of the restatement of the foreign currency loans and derivatives

Upstream:

Raniganj (South) Block:

·; Production increased to 12.5 mmscfd, up 40% from May 2012 and 50% from November 2011

·; A total of 132 wells drilled; including 33 deviated wells successfully drilled

·; Since November 2011 fracced 41 new wells and 8 existing wells (where previously less seams were fracced)

·; Total of 108 wells dewatering / producing gas, a 59% increase over the previous year

·; 11 deviated wells producing gas

Mannargudi Block:

·; Environmental clearance received from Ministry of Environment and Forest

·; Final approvals expected within this calendar year from the State Government

Downstream:

·; Great Eastern continues to supply to its existing customer base while adding further new industrial customers

·; 38.1mmscfd gas under contract / MOU, up 11% from November 2011

·; The Company has sufficient contracts in hand to meet its projected production targets

·; Further discussions underway with major new industrial customers

Outlook

·; Further production increase expected at Raniganj (South) Block

·; Work to commence on Mannargudi Block once expected approvals received

·; Work consists of 30 pilot production wells and 50 core holes

·; 168 wells planned to be drilled over the next five years in the Raniganj (South) Block

·; Pricing environment remains stable

Prashant Modi, President and COO of Great Eastern, said:

"We have continued to make excellent progress in the period, delivering significant growth in production, revenue and profits, and have every confidence in meeting market expectations for the full year.

We will continue to drive our production ramp-up in 2012, with a second rig deployed at Raniganj (South) block and best in class technology being used to execute fracturing on schedule. The substantial reserves upgrade we made in June 2012 reaffirms once again the recoverability of gas from the Raniganj (South) Block.

We have now received Environmental Clearance for the Mannargudi Block from the Ministry of Environment and Forest, and we are in advanced discussions with the Tamil Nadu Government to receive the required approval for the Consent to Establish. We expect to commence work before the end of the year.

The supply/demand balance for gas in India continues to provide a very attractive opportunity, which is set to continue for many years to come. Based as we are in the heart of West Bengal's large and growing industrial centre, with an outstanding resource base and the infrastructure fully in place to allow us to translate production growth directly into sales, we are ideally positioned to take advantage of this demand and deliver on our significant growth potential."

A presentation for analysts will be held at 9 am on 29 October 2012 at the London Stock Exchange, 10 Paternoster Square, London, EC4M 7LS.

For further information please contact:

Chairman's Statement

Financials

In the first six months of FY 2012-13 Great Eastern made material progress across the business, delivering significant growth in production, revenue, and profit.

The increase in revenue and profit was as a result of the significant uplift in gas production and corresponding sales. With existing gas sales contracts and MOUs in place, any increase in production is immediately reflected in enhanced revenue, which in turn falls through to growth in cash flow.

Total revenue increased by 29%, compared to the corresponding period last year, to US$ 14.71m, while EBITDA increased by 48% to US$ 9.99m. On a constant currency basis total revenue has increased 56% to Rs 805m.

At the PAT level, pre MTM (Mark to Market) the company has made a significant profit of US$ 5.73m as compared to pre MTM profit of US$ 2.16m in the corresponding period last year, an increase of 165%. MTM is on account of the restatement of the foreign currency loans and derivatives.

The Company has a long term debt of US$ 94.94m as at 30 September 2012, with various leading banks. With increasing cash flows being generated, the company has negotiated to arrange further debt facilities of Rs. 2.45 billion (approximately US$ 46m) which has been tied-up and the consortium documentation is in process. The company has already drawn US$ 7m after entering into interim documentation with two banks.

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.

Having seen the benefit of considerable investment in asset and infrastructure development over the years, Great Eastern is now a significantly de-risked and profitable business. These results confirm that we are at the start of a sustained period of visible and profitable growth as we ramp up production to its full potential, as well as developing additional resources.

Reserves, Drilling & Production

In June we announced a significant increase in our reserve numbers, as provided by independent reserve engineers Advance Resources International (ARI). There has been an increase of 18% in Original-Gas-In-Place (OGIP) to 2.35 TCF from 2 TCF and an increase of 38% in gross Proven, Probable and Possible reserves (3P) from September 2011, and 466% from November 2009 at Raniganj (South) Block.

We continue to make progress in production ramp-up. A total of 132 wells have now been drilled at our world-class Raniganj (South) Block, with a total of 108 wells dewatering and producing gas, a 59% increase over the corresponding period of the last year.

Since November 2011 we have fracced a further 41 wells and 8 existing wells (where previously less seams were fracced) which puts us on track to achieve our ongoing target of fraccing 40 wells per year.

The commencement of drilling deviated wells from a single well site and the drilling of multiple wells from the same location will also accelerate production, with increased time efficiency and faster completions. To date 33 deviated wells have been drilled.

Sales, Marketing, & Distribution

The Company has 38.1 mmscfd gas under contract / MOU, up 11% from November 2011. The pricing environment remains stable.

Great Eastern is well placed to be the supplier of choice for gas resources in the highly industrialised area of West Bengal, where demand is both substantial and growing. Our position as supplier of choice to our local customers is underpinned by our fully-functioning infrastructure, including our pipeline which runs through the key industrial areas.

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 signed a CBM contract for the Mannargudi block with the Government of India on 29 July 2010, and has signed the Petroleum Exploration License with the Government of Tamil Nadu. The Company has received Environment Clearance and expects to receive the Consent to Establish from the Government of Tamil Nadu before the end of 2012. Work will start soon thereafter which will consist of 30 pilot production wells and 50 core holes.

CSR

The Company has added value not only in economic terms, but also through improving the quality of life for people in the community from its operational area and surroundings.

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 ongoing contribution to our continuing success.

Outlook

We are well placed to build on the success of the first six months of FY 2012-13. We will continue to drive production growth in the Raniganj (South) Block, and project execution will be facilitated by the second rig and best-of-breed fracturing technology.

We have the infrastructure in place to meet the needs of the multiple large industrial customers in the region, and consequently each increase in production feeds directly through to revenue.

We look forward to commencing work at the Mannargudi Block on the basis of receiving the expected approvals.

Looking further ahead we have an exciting drilling schedule with some 168 wells planned to be drilled over the next five years on the Raniganj (South) block alone. We are confident that our consistent execution in growing our production will continue to deliver value to our shareholders.

Independent Auditors' Report on review of condensed interim financial information

To the Board of Directors of

Great Eastern Energy Corporation limited

Introduction

We have reviewed the accompanying condensed statement of financial position of Great Eastern Energy Corporation Limited as at 30 September 2012, the condensed income statement, the condensed statement of comprehensive income, changes in equity and cash flows for the six months period then ended, and notes to the interim financial information ("the condensed interim financial information"). Management is responsible for the preparation and presentation of these condensed interim financial information in accordance with IAS 34 Interim Financial Reporting. Our responsibility is to express a conclusion on this condensed interim financial information based on our review.

Scope of review

We conducted our review in accordance with the International Standard on Review Engagement 2410 Review of Interim Financial Information performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed interim financial information as at and for the period ended 30 September 2012 are not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting.

KPMG

Date: 27 October 2012

Place: Gurgaon

Great Eastern Energy Corporation Limited

Condensed interim financial statements

For the six months ended 30 September 2012

*Share premium represents the premium paid by the shareholders on issue of shares and is net off equity transaction costs. Under the Indian Companies Act 1956, such a reserve has a restricted usage.

Great Eastern Energy Corporation Limited

(All amounts in US dollars unless otherwise stated)

1. Organisation and nature of operations

Great Eastern Energy Corporation Limited ('GEECL' or 'the Company') is a public limited company incorporated in India with its registered office at M-10, ADDA Industrial Area, Asansol-713305, West Bengal, India. GEECL's shares were listed as Global Depository Receipts in the Alternate Investment Market, London, upto 27 May 2010. The Company made a publication of its prospectus in relation to the introduction of its Global Depositary Receipts ('GDRs') to the standard list on the official list of the UK Listing Authority (the 'Official List') and admission to trading on the London Stock Exchange Plc's Main Market for listed securities (the 'Main Market'). Pursuant to the admission of its GDRs to the standard list on the official list and commencement of trading in the GDRs on the main market on 28 May 2010, trading of the Company's GDRs on AIM has been cancelled.

The Company was incorporated in 1992 to explore, develop, distribute and market Coal Bed Methane gas or CBM gas in India. GEECL originally entered into a license agreement in December 1993 with Coal India Limited (CIL) for exploration and development of CBM over an area of approximately 210 Sq. km (approximately 52,000 acres) in the Raniganj coalfields of West Bengal (the block). Following the transfer of CBM administration in India from the Ministry of Coal to the Ministry of Petroleum and Natural Gas (MoPNG), the Company entered into Production Sharing Contract (PSC) for CBM gas on 31 May 2001 with the Government of India for the block.

The PSC has been effective from 9 November 2001 as a result of the granting by Government of West Bengal of the Petroleum Exploration License on the same date and provides for a five year initial assessment and market development phase, followed by a five year development phase and then a twenty-five year production phase, extendable with the approval of the Government of India (GOI). Besides this, during the previous year, the Company was awarded with Mannargudi block located in Tamil Nadu under CBM IV round for which the Production Sharing Contract was signed with the Government of India on 29 July 2010. In this regard, the Company has applied for issuing two Petroleum Exploration License (PEL) on September 16, 2010 to the Hon'ble Chief Secretary, Government of Tamil Nadu. One of the PEL has been granted on 13 September 2011. Currently, the Company is carrying out exploration activities in this block.

The Company does not have any subsidiary and accordingly, does not require any consolidated financial statements. Since the Company does not have any investments in associates and joint ventures also, hence these financial statements are individual financial statements.

The financial statements of the Company as at and for the year ended 31 March 2012 are available upon request from the Company's registered office at M-10, ADDA Industrial Area, Asansol-713305, West Bengal, India, or at www.geecl.com.

2. Statement of compliance

These condensed interim financial statements have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting. These condensed interim financial statements do not include all the information required for full annual financial statements and should be read in conjunction with the financial statements of the Company as at and for the year ended 31 March 2012. These condensed interim financial statements have been authorised for issue by the Board of Directors in its meeting held on 27 October 2012.

3. Significant accounting policies

The accounting policies applied by the Company in these condensed interim financial statements are the same as those applied by the Company in its financial statements as at and for the year ended 31 March 2012.

4. Estimates

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these condensed interim financial statements, the significant judgements made by the management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those applied to the financial statements as at and for the year ended 31 March 2012

5. Financial risk management

The Company's financial risk management objectives and policies are consistent with those disclosed in the financial statements as at and for the year ended 31 March 2012.

6. Segment reporting

Chief Operating Decision Maker (CODM) reviews the business as one operating segment, being the extraction and sale of CBM gas. Hence, no separate segment information has been furnished herewith.

7. a) Property, plant and equipment

During the six-month period ended 30 September 2012, the Company has acquired assets with cost (including capitalized borrowing cost) of USD 12,619,227 (30 September 2011 : USD 14,392,426)

Movements in property, plant and equipment are as follows:

Well capitalisation

During the six months period ended 30 September 2012, the Company has capitalized 12 wells (30 September 2011:7 wells). All costs involved in drilling, cementing, fracturing and drilling of exploratory core holes are initially considered as Capital work-in-progress till the time these are ready for commercial use when they are transferred to producing properties.

Depletion: Commercially producing wells are depleted using unit of production method, based on related proved developed reserves. Proved developed reserves of gas per well are technically re-assessed, 'in house', normally at the end of each reporting period, based on technical data available.

b) Capital commitments

Further, the Company has continuing commitments towards minimum work programme in terms of production sharing contract for Mannargudi block. Such commitments aggregate USD 20,610,834 as at 30 September 2012(31 March 2012: USD 20,742,274).

8. Capital work in progress

During the six-month period ended 30 September 2012, the Company has made additions to Capital work in progress, (including borrowing cost) of USD 15,433,201 (30 September 2011: USD 11,550,063)

9. Intangible assets

Intangible assets represent gas exploration right, computer software and other intangibles. During the six months period ended 30 September 2012, the Company has acquired intangible assets of USD Nil (30 September 2011: USD 17,676)

10. Intangible under development

During the six months period ended 30 September 2012, the Company has made additions to intangible under development of USD 92,691 (30 September 2011: USD 64,473).

11. Borrowing cost

The capitalization rate used to determine the borrowing cost eligible for capitalization in respect of general purpose borrowings is 13.67% p.a for the six months period ended 30 September 2012 ( 30 September 2011: 13.21% p.a) and 6.82% (30 September 2011: 8.43%) in respect of specific purpose borrowings.

During the six months period ended 30 September 2012, the Company has allocated borrowing cost of USD 2,103,101(30 September 2011: USD 2,323,006) to fixed assets/capital work in progress, being directly attributable to the acquisition or construction of qualifying assets. The balance borrowing cost amounting to USD 2,781,475 (30 September 2011: USD 3,091,346) has been charged to income statement. Borrowing cost is reduced by USD 41,987 (30 September 2011: USD 788,326) in respect of income on temporary deployment of borrowings by the Company.

12. Income tax

There is no current tax liability in view of losses for the previous periods. Deferred tax asset has not been recognized in respect of carried forward tax losses and unabsorbed depreciation because sufficient taxable temporary differences are not available and the probable taxable profits may not be available against which the benefits can be utilised.

13. Loans and borrowings

The fair value of borrowings equals their carrying amount, as the debts are at floating rates of interest with non-related parties.

Secured term loans

a) During the previous year, the Company had been sanctioned Rupee Term Loan Facility of INR 2,450 million (equivalent to USD 44.76 million) out of which ICICI Bank's share would be Rupee Term Loan upto INR 500 million (equivalent to USD 9.13 million) under the facility for expansion project. During the six-month period ended 30 September 2012, the Company has drawn INR 225 million (equivalent to USD 4.11 million). As per the credit arrangement letter, the facility shall be secured by first ranking charge/ hypothecation/ mortgage/ assignment/ pledge/ security/ interest on the following, related to the project:

i) All the immovable properties and assets of the Company in relation to the project and immovable properties situated at Mouza Ishwarpura, Talukda Kadi, Distt Mehsana, Gujarat, belonging to the Company, both present and future.

ii) All the movable properties and assets (including intangible assets) of the project, both present and future

iii) All revenues/cash flow/receivables/bank accounts (including trust and retention account) of the Company from the project.

iv) All rights, title, interest, benefits, claims and demands whatsoever of the Company in the project document (including but not limited to the Production Sharing Contract (PSC) or any authorization), any letter of credit, gurantee or performance bond that may be provided by any party to any project document in favour of the Company.

The aforesaid security will rank pari passu with the security interest to be created in favour of participating lenders.

b) Secured term loans (Indian rupee loan and foreign currency loan) are secured by:

i) First mortgage and charge over all the immovable properties and assets of the Company and property situated at MouzaIshwarpura, TalukaKadi, District Mehsana, in the state of Gujarat, both present and future.

ii) First charge by way of hypothecation on all the movables (including movable plant and machinery, machineries spares, tools and accessories and other current assets) of the Company, both present and future.

iii) First ranking charge on the Participating Interest of the Company under Raniganj Coalfields Production Sharing Contract (PSC).

iv) Assignment of (a) all the project documents in relation to the contract area; (b) all the rights, title, interest, benefits, claims and demands, whatsoever, of the Company in the project documents, any letter of credit, guarantee or performance bond that may be provided by any party to any project document in favour of the Company, all as amended, varied or supplemented from time to time; and (c) all the rights, title, interest, benefits, claims and demands, whatsoever, of the Company in or under the authorization.

v) First charge on all receivables and the bank accounts including, without limitation, the Project Capex Account, Trust and Retention Account and each of the other accounts required to be created by the Company in accordance with the Financing Documents.

vi) First charge on the intangible (including but not limited to any know how rights, patents and goodwill) and rights thereto of the Company, both present and future.

The aforesaid mortgage and charge shall rank pari-passu with mortgages and charges created/to be created in favour of the participating institutions/ banks to the project.

During the six months period ended 30 September 2012, the Company has converted Indian currency loan amounting to USD 14,891,685 (30 September 2011: USD 3,295,441) taken from banks to foreign currency non-resident borrowing. The loans would be again convertible to rupee loan at the end of contracted period if the loan agreement is not renewed. The other terms and conditions of the loan including security and repayments terms for the foreign currency loan remain the same as secured rupee loan.

c) During the earlier year, the Company had been sanctioned External Commercial Borrowings ('ECB') facility of EUR 36.50 million from ICICI Bank Ltd., Bahrain. Out of the sanctioned facility, the Company has drawn EUR 22.10 million on 29 December 2010, EUR 10 million on 7 July 2011 and EUR 4.40 million on 19 April 2012. During the year ended31 March 2012, the Company and the lender had agreed to make certain changes in the terms and conditions of the original deed of hypothecation. As per the amended and restated deed of hypothecation, the Company has primarily hypothecated the following assets as security, as and by way of first charge in favour of the lender:

i) All rights, titles, interests. benefits, claims, and demands, whatsoever of the Company, into, under and/or in respect of the Project Documents and the Clearances (both of the above hereinafter referred to as the "Contracts"), (collectively, the "First Hypothecated Properties")

ii) All and singular the moveable properties, accounts, plant and machinery, all other tangible moveable assets (both present and future) together with all benefits, rights and incidentals attached thereto which are now or shall at anytime hereafter be owned by the Company and the uncalled capital, intellectual property/ intellectual property rights, goodwill. Permitted Investments and all the other investments, rights, title and interest in the undertakings of the Company and all rights, titles, interest, property, claims and demands, whatsoever of the Company, unto and upon the same, whether presently in existence, constructed or acquired hereafter (collectively, the "Second Hypothecated Properties")

iii) All amounts, revenues, receipts and other receivables owing to, and received by, the Company from whosoever person, all rights, titles, interest, benefits, claims and demands whatsoever of the Company in, to or in respect of all amounts owing to and received by, the Company from whomsoever person, including any amounts received by the Company under contract guarantees, performance bonds, letter of credit or receivables from the shareholders of the Company or otherwise, which description shall include all properties of the above description, including the accounts in which such amounts are held (including the Project Accounts), whether presently in existence or acquired hereafter. but excluding the Distribution Account (collectively the "Third Hypothecated Properties")

iv) All amounts, revenues, receipts owing to/receivable and/or received by, the Company in relation to the Project or otherwise and all rights. titles, interest, benefits, claims and demands whatsoever of the Company in to or in respect of all amounts owing to/receivable and/or received by, the Company, both present and future, which description shall include all properties of the above description whether presently in existence or acquired hereafter (collectively, the "Fourth Hypothecated Properties") and

v) By way of a first charge, all the other moveable assets of the Company both present and future including the Distribution Account [other than the property effectively charged pursuant to the provisions of Sub-clause (i) through (iv)], (collectively. the "General Assets") provided that the charge created over the General Assets shall rank as a floating charge and shall not hinder the Company from dealing with the same or any part thereof in the ordinary course of its business in accordance with the terms of the Financing Documents and free of liens in each case unless the dealings have been restricted in accordance with the terms or its Deed or otherwise or the charge gets converted into a fixed charge and subject to and only as expressly permitted by the Financing Documents. The Company shall not, without the prior written consent of the lender, create or attempt to create any mortgage, charge, lien, pledge or hypothecation upon the General Assets.

The Security Interest created by the Company in favour of the lender on the hypothecated property by the deed rank Pari Passu with the Security Interest created/to be created in favour of existing lenders and Parallel lenders.

d) Vehicle loan is secured by way of hypothecation of vehicle.

14. Share based payment

Share options are granted to non-executive directors and eligible employees under the stock option plan ("Plan") established and operated by the Company. Originally the plan was an equity settled plan. The Plan was established by the Company on27 May 2008 and provides for allotment of up to 500,000 equity shares of INR 10 each (before consolidation of shares 5,000,000 equity shares of INR 1 each).

During the previous year, the Company has modified the plan whereby employees are given phantom options under which the employees have a choice to either settle the stock options through issuance of equity shares or in cash (equivalent to a percentage, as decided by the remuneration committee, of the difference between the market price of the equity shares of the Company on the date of exercise and the exercise price). This being a compound instrument, the Company measured the fair value of the liability component and equity component as at the measurement date. The value of the equity component is zero. Accordingly, the fair value of the options as at the date of modification amounting to USD 226,145 had been reclassified from equity to liability. The amount of liability recognized is less than the amount previously recognized as an increase in equity. In this regard, no gain has been recognized, since the Company is required to recognize, as a minimum, the grant date fair value of the options granted as the cost of the share-based payment. However, the subsequent remeasurement of the liability (from the date of modification till the reporting date, i.e., 30 September 2012) is recognized in the income statement.

The options are fair valued using the Black-Scholes model. The share based payment charge on these options granted are amortized over the vesting period in accordance with the vesting schedule, provided that the holders of the options continue to be an employee on the vesting date. The options are to be exercised within a maximum period of 10 years from the date of grant. All the options would vest in five equal installments on an annual basis over a five year period.

A. Charge to the condensed income statement towards share based payments and the movement in share based compensation reserve is as given below.

\* The share based payment liability is re-measured as at 30 September 2012 and the carrying amount is USD 131,048 as at

30 September 2012 (31 March 2012: USD 173,619).

Great Eastern Energy Corporation Limited

(All amounts in US dollars unless otherwise stated)

The total charge/(credit) for the six months period ended 30 September 2012 relating to employee share-based payment plans was USD (19,059) (six months period ended 30 September 2011: USD (15,526)) after considering the effect ofre-measurement of liability as at 30 September 2012.

The fair value of each option award is estimated by using the Black-Scholes Option Pricing employee share-based payment model.

B. The fair value of option as at 30 September 2012 , 30 September 2011 and the date of modification has been computed by using the following assumptions:

Expected volatility was computed on the basis of the historical daily volatility of the closing price of the equity share of the Company over the expected life of the option.

C. Movement in the share options outstanding:

The remaining weighted average contractual life of options outstanding as at 30 September 2012 is 7.50 years(31 March 2012: 7.71 years).

15. Retirement benefits

The Company has three post employments plans, namely gratuity, superannuation and State administered provident fund.The Company has made provision for gratuity and superannuation benefits on the basis of actuarial valuation.

16. Provisions

*The provisions created during the period ended 30 September 2012 and 2011 have been capitalised and no amount has been charged to the statement of income.

Site restoration costs

A provision for restoring the land back to its originality is created by way of site restoration costs, on a well by well basis. Such expenses are provided when the wells have been drilled substantially. These are expected to be incurred when the Company has commercially exploited the proved reserves of the well or when a well which has been drilled, has been declared as dead.

17. Commitments and Contingencies

Claims made against the Company not acknowledged as debts (including interest wherever applicable) are as follows:-