GEEC.L Regulatory News (GEEC)

13 Dec 2005 08:00

Great Eastern Energy Corp PLC13 December 2005 Not for release, publication or distribution, directly or indirectly, in or into the United States of America PRESS RELEASE 13th December 2005 GREAT EASTERN ENERGY CORPORATION COMMENCEMENT OF DEALINGS IN THE COMPANY'S GDRs ON AIM, A MARKET OF THE LONDON STOCK EXCHANGE Great Eastern Energy Corporation Ltd ("Great Eastern Energy" or "the company"),a company incorporated to explore, develop, distribute and market Coal BedMethane ("CBM") in India, announces the commencement of dealings today of itsGlobal Depositary Receipts ("GDRs") on AIM, a market of the London StockExchange. This follows a successful fund-raising by the company of £12.1m and aplacing of a further £6.9m of GDRs by existing shareholders, both at a price of101 pence per GDR. Great Eastern Energy is the first Indian company to issue its securities on AIM.Each GDR represents 5 ordinary shares in the Company. Great Eastern Energy willtrade under the symbol "GEEC". Arden Partners is acting as the company's Nominated Adviser and Broker. Mr Y.K. Modi, Chairman and Managing Director of Great Eastern Energy, said: "We appreciate the strong support that we have received from institutionalinvestors during our IPO and are delighted to be joining AIM. The successfuloffer of our GDR's will provide Great Eastern Energy with the funds necessary tobegin developing the first 20 wells in the company's plan to become a supplierof Coal Bed Methane in West Bengal, India." For further information, contact: Great Eastern Energy Company Ltd (00 91 124 258 0465) Yogendra Modi - Executive Chairman and Managing Director Prashant Modi - Executive Joint Managing Director Arden Partners (020 7398 1632) NOMAD and Broker Richard Day/Steve Pearce Simmons & Company International Limited (01224 202 300) Co Distributor Neil Hartley/Anoop Poddar Citigate Dewe Rogerson (020 7638 9571) Media: Martin Jackson/George Cazenove Analysts: Nina Soon GREAT EASTERN ENERGY CORPORATION Notes to editors Introduction Great Eastern Energy is amongst the first of its kind in India to be involvedwith CBM. Mr Yogendra Kr Modi is Executive Chairman and Managing Director andMr Prashant Modi is Executive Joint Managing Director of Great Eastern Energy. Coal Bed Methane CBM in the most part is held in place by water pressure. Extracting it involvesdrilling shallow wells into the coal seam, perforating and then fracturing thecoal seams to increase porosity. Water is then pumped out of the coal seam to asufficiently low pressure to allow the gas to desorb and flow into the wells. A key advantage of CBM is that there is little or no exploration risk as moderntechniques can identify coal beds and the gases that lie within. However, thecomplexities of fracturing coal seams and completion of the wells requiresconsiderable expertise in order to achieve and maintain acceptable flow rates.This expertise is available from various oil and gas service companies. Assets The company has been granted a block of approximately 210 km2 in the Raniganjcoalfields of the Damodar Valley in West Bengal for the exploration andproduction of CBM under a production sharing agreement with the Indian Ministryof Petroleum and Natural Gas. The block is located approximately 200 km north-west of Kolkata and is locatedin an industrialised region of Damodar Valley in West Bengal. The region isserved by a national highway and mainline railways. The Raniganj coalfield is the largest high grade coalfield in a fault systemknown as Gondwana Basin. Individual coal seams from this coalfield range inthickness from less than 1 metre to more than 5 meters and reach a cumulativethickness of more than 50 meters. Market The Indian economy's demand for energy resources is high. Less than 30% ofcrude oil demand is satisfied by domestic production and the country's firstever imports of liquified natural gas commenced in February 2004. Reserves Great Eastern Energy has drilled three pilot production wells in the Surajnagararea, southwest of Asansol. The three wells were completed successfully, withall wells drilled, cased, cemented, logged, perforated and fractured. From thecore well samples Schlumberger has estimated that the total gas-in-place inGreat Eastern Energy's licence area is approximately 1.386 tcf. The desorption tests carried out on the pilot wells showed a CBM content rangeof up to 426 standard cubic feet ("scf") per tonne of coal (with an averagearound 250 scf per tonne). Strategy To date, 3 pilot wells have been drilled and the company expects the drilling ofa further 20 wells to commence during the first quarter of 2006. Thedevelopment plan for the project involves drilling 100 wells over an estimatedfour year period. Sales from the original 3 pilot wells is expected to start during the firstquarter of 2006. Use of Proceeds of the Placing The net proceeds of the Placing will be used to fund infrastructure projects andto develop the first 20 wells of the company's development plan. The directorsof Great Eastern Energy also believe that listing on AIM will raise theCompany's profile, allow access to capital markets and diversify its investorbase. This information is provided by RNS The company news service from the London Stock Exchange