10 Jan 2011 07:00
10 January 2011
Great Eastern Energy Corporation Limited
("Great Eastern" or "the Company")
Interim Management Statement
Great Eastern Energy Corporation Limited (LSE:GEEC) a company involved in the exploration, development and production of Coal Bed Methane in India, today issues its Interim Management Statement for the period from October 1, 2010 to the date of this announcement as required by the UK Listing Authority Disclosure and Transparency Rules.
Operational Highlights
o Fraccing summary:
o Total wells fracced - 50 (47 - Nov 2010)
o Fracced 2.5 wells in Dec 2010 (2 wells per month - Nov 2010, prior to that 1.36 per month)
o Expect to increase fraccing rate further
o 49 wells dewatering / producing (41 - Nov 2010)
o Production increased 10.1% to 5 mmscfd (4.54 mmscfd - Nov 2010)
o Drilled 78 wells (77 wells - Nov 2010); due to geological conditions in this particular well it took 45 days to drill the same. Great Eastern remains on track to achieve our fraccing and production targets, with a bank of drilled wells in hand yet to be fracced.
o The 2nd drilling rig is expected in March / April 2011.
Marketing Highlights
The Company has entered into a Gas Sale Agreement with a major consumer for supplying of ~ 2.10 MMSCFD of gas. Under the agreement, supply started in December 2010.
As expected one of the customers taking a lesser amount has temporarily stopped taking gas due to their facility being upgraded. The supply of gas to that customer is expected to resume from June 2011.
Sales are in line with the Company's expectations and projections. With the signing of the sales agreement outlined above, the total amount of gas currently under contract / MOU is 28.87 MMSCFD.
Discussions with other customers are continuing for further contracts and we will enter into contracts with them at the appropriate time. The Company has sufficient contracts in hand to meet its projected production targets.
CBM block - Mannargudi
As announced on 4 January 2011, the Company has signed a Memorandum of Understanding (MOU) with the Government of Tamil Nadu and received approval from them for granting the Petroleum Exploration License ("PEL") in relation to the Company's second CBM Block in Mannargudi. The grant of approval of the PEL is ahead of the Company's expectations.
Financial Highlights
The Company has signed a Facility Agreement with ICICI Bank Limited for providing an ECB facility of Euro 36.5 million (~ US$ 47.80 million) at a floating rate with spread of 390 bps above the 6 months Euribor. With this the Company has sufficient funds to meet its capital expenditure thru February 2012. Further details are set out in a separate announcement.
The financial performance of the Company is in line with its expectations and on track to meet the projections.
Commenting, Prashant Modi, President and COO of Great Eastern, said:
"Great Eastern continues to make solid progress, both in terms of operational and financial performance and remains on target to meet current expectations. We are pleased to have received the approval for the PEL for the Mannargudi block ahead of our expectations. The time it took to drill the last well was far longer then the average due to particular geological conditions but with more than sufficient drilled wells in hand the programme of fracturing and increasing production to meet demand remains well on track. We continue to see revenue increase as gas sales progress and having secured the additional debt facility the Company remains in a strong position."
For further information:
Great Eastern Energy
Yogendra Kr. Modi Chairman & CEO +44 (0)20 7337 1516
Prashant Modi President & COO
Arden Partners plc
Richard Day +44 (0)20 7614 5918
Adrian Trimmings
Pelham Bell Pottinger Public Relations
Philip Dennis +44 (0) 20 78613919
Elena Dobson + 44 (0) 2078613147