GEEC.L Regulatory News (GEEC)

8 November 2010

Great Eastern Energy Corporation Ltd

("Great Eastern" or "the Company")

Interim Results

For the six months ended 30 September 2010

Great Eastern Energy Corporation, a company involved in the exploration, development and production of coal bed methane (CBM) natural gas in India, is pleased to announce its Interim Results for the six months ended 30 September 2010.

Highlights:

Production:

§ Increased 22% to 4.54mmscfd (3.72mmscfd - July 2010)

o Ongoing uplift in production from existing well

o 5 additional wells in dewatering / production bringing total to 41 (36 - July 2010)

Operations:

§ 4 additional wells drilled since July 2010 bring total to 77

§ 4 further wells fractured since July 2010, bringing total to 47

o Additional fracturing underway

o New coil tubing technique commenced - increasing frac rate in second half

§ Additional work over rig commissioned - bring total to 3

o Improving efficiency and reducing well down time

Financials:

§ Gas sales revenue increased 948% to $5.52m

§ Total revenue increased 703% to $6.03m

§ EBITDA of $2.9m (loss of $1.2m H1 09/10)

Expected exit production levels:

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

"The underlying value and potential growth within the Great Eastern story remains as strong today as it has ever been. There is clear demand for gas resources and we have the infrastructure in place to transport that gas to those end users. Any increase in gas production is, as such, immediately translated into sales and the rapid increase in production in the first half of the year is reflected in these financial numbers. At the same time, it needs to be appreciated that unlike conventional gas, it is extremely difficult at an early development stage to predict certain elements of the CBM development process, making precise predictions on production growth difficult. Nonetheless, the Company expects to be positive at the PBT level for the year ending March 2011 and the fundamental recovery potential from our Raniganj block of around 60% reaffirms the inherent value."

For further information:

Great Eastern Energy

YK Modi Chairman & CEO + 44 (0) 20 7861 3232

Prashant Modi President & COO

Arden Partners

Richard Day +44 (0)20 7614 5917

Adrian Trimmings

RBC Capital Markets

Martin Eales +44 (0)20 7653 4000

Brett Jacobs

Pelham Bell Pottinger Public Relations

Philip Dennis +44 (0)20 7861 3919

Elena Dobson +44 (0) 207861 3147

Chairman's Statement

Introduction:

The Company has made further progress in the first half of the year, both in terms of operations and uplift in gas production, which is reflected in the financials reported today. Unlike conventional gas resources, the main hurdles to be overcome in the development of CBM are more to do with extracting the gas than finding it in the first place. Furthermore, in contrast to conventional gas wells, the production from CBM wells will also grow over time and then plateau. The team of Great Eastern has invested significant time and effort in getting to understand the very particular nature of the Company's main Raniganj block and is now at a point where it is able to commercially extract gas. We can reasonably expect to see production accelerate in the months and years ahead.

Production growth and ultimate recovery of value is a given but, as is typical with CBM development, there remain a number of unpredictable factors, such as dewatering the coals and the variance in well performance, which makes building a precise aggregate production profile extremely difficult in the early stages. We are on track to realise the full commercial potential of our block and have no doubt that production will come within a latitude of months, not years.

The most important factor in a CBM field is the Estimated Ultimate Recovery (EUR) which, as per our current base case estimates, is around 60%.

Financials:

During the first half of the year gas sales revenue increased 948% to $5.52m over the same period last year and 183% over the second half of last year. Total revenue (including other income) increased 703% to $603m in the first half over the first half last year and 118% over the six months to March 2010.

 EBITDA increased to $2.9m compared to a loss of $(1.2m) for the first half last year and a loss of $(1.9m) for the full year to end March 2010. At the PBT level (before exceptional items) the losses reduced significantly, by 87%, to $(0.5m) as compared to a loss of $(3.8m) for the same period last year and $(8.5m) for the full year ended March 2010.

The increase in revenues and greatly reduced loss during the first half of the year was as a result of the significant uplift in gas production and corresponding sales. With existing gas sales contracts / MOU in place, any increase in production is immediately reflected in enhanced revenues. The supply commitments under these agreements are being and will be fulfilled as per the production plan.

Production:

Total production increased 22% in the first half of the year to 4.54mmscfd, from 3.72mmscfd at the time of announcing the full year results in July. This increase was primarily due to the developing production profile of the wells drilled and completed prior to the start of the first half, and 5 additional wells being brought into dewatering / production during the period, bringing the total to 41 to date.

Looking ahead, production growth will come from both the existing producing wells (as they will reach peak production in approximately 5 - 6 years), and new wells being brought on-stream.

With a total of 77 wells drilled to date and only 41 of those wells currently in dewatering / production, the Company has more than sufficient wells in hand to also see a significant further uplift in production over the next 12 months from new wells coming on-stream.

Currently 44 wells are tied into the internal distribution infrastructure, with 2 additional wells having been tied in during the first half of the year. The main focus during the last six months has been on completion of a main internal pipeline connecting the wells drilled in the south of the block to the gas gathering station located in the north. In order to avoid the flaring of gas produced, the Company's approach is to first tie the wells into the onsite distribution and gas gathering infrastructure ahead of fracturing them and putting them on dewatering / production.

Alongside an increase in the rate of well tie-ins, we are also expecting to see a further increase in the rate of fracturing, with the coil tubing fracturing unit now commissioned. Since being in place, we have already seen the fracture rate increase substantially and expect to see it increase again over the course of the current period.

Production from existing producing wells is also impacted by the need for these wells to be worked over frequently in the beginning due to formation related issues. The problem reduces as dewatering and production progresses. This issue is consistent with all CBM developments, albeit in different frequencies depending on the reservoir characteristics. As mentioned in the last results statement, the Company has, as a result, commissioned a third workover rig to reduce these down times and accordingly increase production efficiency.

Operations:

Since announcing the full year results in July, 4 additional wells have been drilled. As is expected at this time of year, the rate at which wells are drilled has been impacted by the monsoon weather. With the monsoon season now over, we can expect to see the drill rate resume to more normal levels of around 20 - 25 wells per year with the one rig.

As mentioned in the last results statement, the Company has ordered a second rig to increase the pace of drilling to around 40 wells per year. The original intention was for this rig to be onsite and commissioned in Q4 of this year but transport problems beyond the Company's control have hampered progress. The rig is now expected to arrive on site in March / April next year. With more than sufficient wells in hand to bring into production, the delay in the arrival of this rig should not have any impact on production growth.

Again, as previously mentioned, there has been an increased focus on the drilling of wells in the south of the block. A year ago, we had drilled 6 wells in the south of the block with the aim of obtaining additional data. We now have 25 wells drilled in the south. The aim of these additional wells is to bring the southern part of the Raniganj block into production. As mentioned above, these wells are being interconnected and tied into the onsite distribution and gas gathering infrastructure ahead of fracturing and putting them on dewatering / production.

The award of a second block, Mannargudi, is key to the longer term growth of the business. The block is located in Tamil Nadu in the south of India and was the only one to attract the maximum bids during the CBM IV licensing round. The block is well located for industrial markets, has existing access to a pipeline distribution infrastructure and is estimated, by the Directorate General of Hydrocarbons, to have gas in place of 0.98 TCF.

The work programme committed to on this Block is 50 core holes and 30 pilot production wells within 5 years of executing the Petroleum Exploration Licence. The licence has been applied for along with certain other required approvals. Work on the block is expected to start in Q4 2010. The cost to the Company to service this commitment over the next 5 years is estimated to be minimal, at around US$ 20 million.

Sales / Marketing and the Indian Gas Market:

Great Eastern Energy has 24.80 mmscfd of sales under existing contract or MOU. These sales contracts are with small local businesses and with significant industrial customers. The agreements in place with these customers are flexible, allowing Great Eastern to increase supply of gas as and when available. In West Bengal, the main alternative source of fuel remains other liquid fuels, which are not only more expensive but are mostly far less efficient and more polluting.

In addition to the sales agreements in place, Great Eastern is in advanced discussions with further potential customers for the supply of 25 mmcfd. Again, the nature of these agreements allows for flexibility in terms of supply.

As in all parts of India, the market for gas is at the local level due to limited national distribution infrastructure. Great Eastern is well placed to be the supplier of choice for gas resources in the highly industrialised area of West Bengal. Demand for gas in West Bengal already greatly exceeds Great Eastern's supply capacity at 630mmscfd and this number is estimated to grow to 1765mmscfd by 2017.

The price of gas in this region and also in the wider market remains extremely robust and is underpinned by long term LNG contracts being put in place at between approximately $11 and $15 per mcf over the next 20 years. The ongoing growth in demand for gas and price expectations is also reflected in recent announcements by major international companies to make very significant investments in LNG plants to be able to transport gas to India and other high growth Asian markets.

Outlook:

The aim for the next half of the year is to see a further increase in the rate of gas production and a corresponding increase in sales. As outlined above, in order to achieve this aim, the focus over the coming months will be to grow production from existing wells as they naturally move up the CBM production cycle and to bring additional wells on-stream by speeding up the rate at which these wells are fractured and put on dewatering / production, through deployment of the new coil tubing technique, which is already showing positive results.

When looking at a project that will yield consistent revenues spanning a twenty five year period, the overall value is not diminished by not being able to build an exact production profile in the early stages. The most important factor in a CBM field is the Estimated Ultimate Recovery (EUR) which, as per our current base case estimates, is around 60%. We have every confidence of being able to achieve our aims over the second half and look forward to the remainder of the year with confidence.

Great Eastern Energy Corporation Limited

Condensed statement of changes in equity

(All amounts in US dollars unless otherwise stated)

For the six months ended 30 September 2009

Great Eastern Energy Corporation Limited

Condensed statement of changes in equity

(All amounts in US dollars unless otherwise stated)

For the six months ended 30 September 2010

1. Corporate information

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. The financial statements of the Company for the year ended 31 March 2010 were authorized for issue in accordance with a resolution of the board of Directors on 5 July 2010. GEECL is a public limited company incorporated in India, with shares 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).

The Company has its primary listing on main market of the London Stock Exchange. The Company does not have any subsidiaries.

The financial statements of the Company as at and for the year ended 31 March 2010 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, as issued by the International Accounting Standards Board. They 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 2010. These condensed interim financial statements were approved by the Board of Directors on 3 November 2010.

3. Significant accounting policies

Except as described below, 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 2010.

Change in accounting policies

During the six-months ended 30 September 2010, the Company has adopted the amendment as per IAS 17, Leases. The amendment is effective for period beginning on or after 1 January 2010 and provides guidance regarding classification of leases of land, so as to eliminate inconsistency with the general guidance on lease classification. As a result, leases of land should be classified as either finance or operating, using the general principles of IAS 17.

As a result, the Company has changed its accounting policy with respect to those leases for land which transfer to the Company substantially all risks and rewards incidental to the ownership. Such leases have been considered as finance leases and hence reclassified from "prepayments" to "property, plant and equipment" in accordance with the above amendment. Consequently, the cumulative amortization of prepayments has also been reclassified to accumulated amortization on leasehold land with retrospective effect.

In line with the principles given in IAS 8, this change in accounting policy have been applied retrospectively and, accordingly, balances as at 31 March 2010 have also been restated.

The following table summarizes the adjustment made in respect of leasehold land which have been classified as finance leases:

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 2010.

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 2010.

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 2010, the Company has acquired assets with cost (including capitalized borrowing cost) of USD 12,935,931 (30 September 2009 : USD 6,321,642).

In respect of funds borrowed and used for qualifying assets, the Company has capitalized borrowing cost amounting to USD 73,930 for the six-month period ended 30 September 2010 ( 30 September 2009 : USD 706,207).

The capitalization rate used to determine the borrowing cost eligible for capitalization is 10.45% p.a for the six-month period ended 30 September 2010 (30 September 2009 : 12.67% )

Movements in property, plant and equipment are as follows:

Well capitalisation

During the six-month period ended 30 September 2010, the Company has capitalized 8 wells (30 September 2009: Nil wells). All exploration cost 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

8. Capital work in progress

During the six-month period ended 30 September 2010, the Company has made additions to Capital work in progress, including borrowing cost, of USD 6,956,054 (30 September 2009 : USD 14,073,038).

In respect of funds borrowed and used for qualifying assets, the Company has transferred borrowing cost amounting to USD 582,478 for the six-month period ended 30 September 2010 ( 30 September 2009 : USD 1,146,265).

The capitalization rate used to determine the borrowing cost eligible for capitalization is 10.45% p.a for the six-month period ended 30 September 2010 (30 September 2009 : 12.67%)

Movement in Capital work in progress is as follows-

During the previous years, the Company had incurred upfront transaction costs on arranging borrowings from a consortium of banks. The entire transaction cost was considered as borrowing cost of the year of incurrence and accounted for accordingly instead of amortising it over the period of the loan.

During the current year, the Company has rectified the treatment and restated the opening balance of 'capital work in progress' and 'prepayments' by USD 374,967 as at 31 March 2010 and USD 332,208 as at 31 March 2009.

9. Intangible assets

During the six-month period ended 30 September 2010, the Company has acquired intangible assets of USD Nil (30 September 2009: USD 19,283)

10. Income tax

There is no current tax liability in view of losses for the period. The Company has not carried forward the losses incurred till 31 March 2005. However from the year ended 31 March 2006, the Company has carried forward losses for set-off against future taxable profits. 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.

11. Loans and borrowings

The fair value of borrowings equals their carrying amount, as the debts are at floating market rates of interest.

Borrowings from banks/finance company have been taken from consortium of banks/financial institution and are secured by:

a) First mortgage and charge over all the immovable properties and assets of the project, both present and future.

b) 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 project, both present and future.

c) First charge/assignment and/or creation of security interest on (i) 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; (ii) all the rights, title, interest, benefits, claims and demands whatsoever of the Company in or under the authorization.

d) First charge on all the bank accounts of the Company in relation to the project including, without limitation, the project capex account and each of the other accounts required to be created by the Company under any project document or contract.

e) First charge and/or creation of security interest on the trust and retention account (TRA) established by the Company for the revenue generated from the project

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

Borrowings from others are secured by way of hypothecation of vehicle.

Borrowings from banks and financial institute mature until 2015.

During the six-month period ended 30 September 2010, the Company has converted Indian currency loan amounting to USD 12,780,000 (30 September 2009 : Nil) taken from banks to foreign currency non-resident borrowings. The loans would again be 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 repayment terms for the foreign currency loan remain the same as secured rupee loan.

The Company has also taken forward contract covers in respect of certain foreign currency loans.

12. Share based payment

Share options are granted to non-executive directors and eligible employees under the stock option plan established and operated by the Company. The plan is an equity settled plan. The Plan was established by the Company on 27 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).

These 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 below, provided that the holders of the options continue to be an employee on the vesting date. The options must be exercised before the expiry of 9 years from the date of first vesting. 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 equity settled share based payments and the movement in share based compensation reserve is as given below.

B. Details of options granted:

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.

The total charge for the six-month period ended 30 September 2010 relating to employee share-based payment plans was USD 90,694 (six-month period ended 30 September 2009: USD 35,935).

The fair value of each option award is estimated on the date of grant using the Black- Scholes Option Pricing model.

C. Movement in the share options outstanding:

The remaining weighted average contractual life of options outstanding as at 30 September 2010 is 8.67 years (31 March 2010: 9.03 years).

13. Retirement benefits

The Company has two post employment unfunded benefit plans, namely gratuity and superannuation. The Company also has a funded defined contribution plan in the form of a State administered provident fund. Gratuity and superannuation are defined benefit schemes. The Company has made provision for gratuity and superannuation benefits on the basis of actuarial valuation.

14. Provisions

Movement in provision for site restoration

Movement in provision for equipment demobilisation

* The provisions created during the six months ended 30 September 2010 and 2009 have been capitalized and no amount has been charged to the statement of comprehensive income.

Provision for equipment demobilization

A provision is recognized in the accounts for demobilization of equipment, payable to service provider, as and when the equipment reaches the site. Obligations expected to be settled within the next 12 months as of the balance sheet date are treated as current liability. Provisions under this head are discounted only if the impact of the discounting is significant.

Provision for 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.

15. Contingencies

Claims made against the Companies, not acknowledged as debts:

There are no new contingencies other than those disclosed in the financial statements as at and for the year ended 31 March 2010 except for certain show cause notices received from the Excise Department regarding levy of excise duty on sale of natural gas amounting to USD 98,914. In respect of these show cause notices, the Company has submitted its replies.

16. Related party disclosure

The Company is controlled by Mr. Yogendra Kr. Modi, who is also the Company's ultimate controlling party.

a) Related parties and nature of relationship where transactions have taken place.

b) Related party transactions

The following tables provide the transactions which have been entered into with related parties during the six months ended 30 September 2010 and 2009.

c) Balances outstanding

* Amounts recoverable from YKM Holdings Private Limited consist of USD 32,358 (31 March 2010: USD 32,200) on account of security deposits paid for property taken on lease, recoverable on expiry of lease agreement and USD 32,358 (31 March 2010: USD 32,200) on account of advance rent paid, adjustable against future occupation of property taken on lease.

d) Compensation paid to key management personnel

In addition to above payments, the Company has during the six-month period ended 30 September 2010 paid USD 5,207 (30 September 2009: USD 3,708) as sitting fees to the independent directors for attending various meetings and the same are included in 'other operative expenses' in the income statement. These independent directors have also been issued stock options by the Company under the stock options plan (refer note 12) and the expenses for the same, recognized in the income statement during the six-month period ended 30 September 2010 amount to USD 12,132 (30 September 2009 : USD 8,927).

During the six months ended 30 September 2010, the Company has paid USD 38,583 to Mr. Prashant Modi, being the key managerial personnel, as remuneration for the months of August 2010 and September 2010 which is subject to the Central Government approval. In this regard, the Company has applied for fresh approval from the Central Government vide letter dated 27 September 2010, for a further period of 5 years w.e.f 1 August 2010. In case the Central Government does not approve the remuneration, Mr. Prashant Modi will refund the amount paid.

e) Terms and conditions of transactions with related parties

The transactions with the related parties are made at normal market prices. Outstanding balances at the year-end are unsecured, interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables.

17. Leases and arrangements containing lease

The Company has entered into equipment lease and other arrangements with various contractors for development of its wells, whereby the specific assets leased by the contractors are used only at the Company's well development site and such arrangements convey the right to use the assets. Some of these arrangements contain lease as per IFRIC 4. The significant terms and arrangements are described below.

a. The Company has entered into arrangements with Mitchell Drilling International PTY Limited for logging and wiring of production wells and core holes respectively. The terms of contract include comprehensive payment rates to include both lease and non - lease elements which are not separable. The arrangement is cancellable at the option of either party to the contract.

b. The Company has entered into an arrangement with Halliburton Offshore Services Inc. on 20 August 2009 for fracturing services of production wells and core holes. The terms of the agreement include provision of equipment and personnel for 150 fracturing jobs or till completion of 15 months. Further on 15 June 2010, the Company signed one addendum with Halliburton Offshore Services Inc. valid for a period of three years from the date of signing or until completion of 3000 fracturing jobs by deploying coil tubing technology. The Company has also entered into agreement with Halliburton Offshore Services Inc. on 29 May 2010 for the provision of cementing services. The terms of agreement includes provision of equipment and personnel for a period of two years from the commencement date i.e. 18 July 2010.

c. The Company has also entered into an arrangement with Mining Associates on 18 June 2010 for cementing and installation of casing. The terms of agreement include provision of equipment and personnel till completion of 90 days.

d. The Company had taken a drilling rig on lease form Aakash Exploration Services Pvt. Limited for an initial period of one year starting from 3 June 2008. This arrangement has terms describing the operating rate per hour, the standby rate per hour and the repair rate per hour. The total lease payments made under this contract during the six-month period ended 30 September 2010 USD Nil (30 September 2009 : USD 41,658). The lease has expired on 14th April 2009.

The above mentioned arrangements include non-lease elements also and are being treated as well development costs along with other costs. The segregation of lease and non- lease elements under some of the arrangements is not feasible. The details of total expenses are as follows:-

e. The Company has acquired a property under an operating lease for an initial period of three years, renewable by mutual consent on mutually agreeable terms. The lease is also cancellable at the option of either party by service of appropriate notice. During six-month period ended 30 September 2010, lease rentals of USD 73,047 (30 September 2009: USD 79,093) incurred have been charged to profit and loss account.

f. The Company has taken different pieces of land on lease on which the wells are being developed. The lease period for these pieces of land generally ranges from 30 to 99 years. The Company is required to pay the entire amount of consideration as lease premium upfront upon entering into agreement for acquisition of these pieces of land and no further periodic lease rentals are payable for use of these pieces of land. The leasehold land have been classified as finance or operating lease on the basis of principles given in IAS 17. Accordingly the leasehold land determined as finance lease as at 30 September 2010 amounting to USD 127,314 (31 March 2010 : USD 127,678) has been classified/reclassified to property, plant and equipment. The leasehold land determined to be operating lease as of 30 September 2010 amounting to USD 79,124 (31 March 2010: USD 80,788) continued to be recognized as prepayments and being amortized over their respective lease periods.

18. Key business developments

During the period, the Company has been awarded with Mannargudi block located in Tamil Nadu under CBM IV round for which the Production Sharing Contract signed with the Government of India on 29 July 2010. The Ministry of Petroleum and Natural Gas has written a letter on August 13, 2010 to the Government of Tamil Nadu conveying their approval for the above block in the Company's favour and for issuing the Petroleum Exploration Licence (PEL) to the Company. In this regard, the Company has applied for issuing the PEL on September 16, 2010 to the Hon'ble Chief Secretary, Government of Tamil Nadu.

19. London stock exchange (LSE) listing

During the period, the Company has migrated its GDR listing from Alternative Investment Market (AIM) to the main market of LSE. In this regard, 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 has incurred the total listing expenses during the six-month period ended 30 September 2010 of USD 710,388 (30 September 2009 : Nil), which have been expensed off during the period.

20. Foreign currency translation

The Company has converted Indian Rupees ('INR') balances to 'USD' equivalent balances on the following basis:

·; For conversion of all assets and liabilities, other than equity, as at the reporting dates, the exchange rates prevailing as at the reporting date have been used, which are as follows:

- as at 30 September 2010: USD 1 = INR 44.92

- as at 31 March 2010: USD 1 = INR 45.14

·; For conversion of all expenses and income on income statement and the cash flow statement, for the respective periods, periodic average exchange rates have been used, which are as follows:

- For the six months ended 30 September 2010: USD 1 = INR 46.09

- For the six months ended 30 September 2009: USD 1 = INR 48.54

21. Comparative figures for the six months ended 30 September 2009 are based on the management accounts and were not reviewed/audited by the auditors.

22. Figures for the previous period have been reclassified/ regrouped to make them comparable with the current period classification.