3 Feb 2010 07:00
February 3, 2010
Great Eastern Energy Corporation Limited
Investor Presentation and Operations Update
Great Eastern Energy Corporation Limited ("Great Eastern" or "the Company"), a company involved in the exploration, development and production of coal bed methane gas in India, is pleased to provide the following update on the Company's operations in advance of a presentation to be given at the forthcoming Investor Conference by Arden, in London on February 10, 2010.
The Company continues to make good progress in all areas of operations. The total quantity of gas now under sales agreement is 24.20 MMscfd, representing a 155% increase over the quantity of gas under contract or MOU at the time of the Company's interim results in November 2009. As previously announced, major agreements put in place since the interim results include SAIL ISP, part of the Steel Authority of India Limited, for a total quantity of 12.85 MMscfd and three further commercial agreements totalling 1.84 MMscfd.
Demand for the Company's gas in its regional target market remains strong and gas prices being realised under commercial arrangements continues to be in line with previous expectations. Great Eastern gains across the entire value chain, including upstream, midstream and downstream and, as such, since the completion of its 77.62 km distribution pipeline in October 2009, management's focus has increasingly been on developing commercial gas sales.
Drilling and fraccing operations are progressing as expected. The number of wells drilled, since November 2009, increased by 3 to 61 and, under the current fraccing programme with Halliburton, the total number of wells fracced has increased by 4 to 30. This fraccing programme involved all 10 coal seams found within the block. In total, the Company plans to drill and frac 300 wells on the block by 2016 in order to fully exploit its potential. The last Competent Persons Report (CPR) undertaken by Netherland, Sewell & Associates, Inc. in June 2007, attributed original gas-in-place of 1.92 TCF. An updated CPR is expected to be announced in this quarter.
The total number of wells dewatering and producing gas has recently increased by 2 to 28 since the Interims. Production of gas during that period, however, remained broadly flat, increasing marginally to 4.2 MMscfd. Production is expected to ramp-up once the new wells being fracced are put into production. Currently, 25 wells are connected to the Company's distribution infrastructure.
Great Eastern remains underpinned by a strong cash position of US$ 27.10 million as on 31st Jan 2010, after the £28.8m placing and fund raising in November. The Company has repaid its debt to one of the lenders thus saving US$ 1.7 million per annum as finance charges.
Commenting, Prashant Modi, President & COO of Great Eastern, said:
"Since increasing our focus on sales and marketing we have seen a very significant increase in the quantity of gas under commercial sales agreements. Demand for gas in India remains strong, with demand expected to continue to outstrip supply by some considerable margin. This is evident in our local target market, where there is considerable commercial need."
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For Further Information:
Great Eastern Energy
YK Modi Chairman & CEO +44 (0)20 7337 1516
Prashant Modi President & COO
Arden Partners
Richard Day +44 (0)20 7614 5932
Adrian Trimmings
RBC Capital Markets
Martin Eales +44 (0)20 7653 4000
Brett Jacobs
Pelham Bell Pottinger
Philip Dennis +44 (0)20 7337 1516
Elena Dobson +44 (0)20 7337 1517