14 Mar 2011 07:00
14 March 2011
Great Eastern Energy Corporation Limited
("Great Eastern" or "the Company")
Pre-close trading update
Great Eastern Energy Corporation Limited (LSE:GEEC), a company involved in the exploration, development and production of Coal Bed Methane gas in India, is pleased to provide the following trading update prior to entering its close period.
Operational Highlights
o As on end of February 2011, production increased 11.44% to 5.72 mmscfd from Jan 2011 (5 mmscfd) and 26% from Nov 2010 (4.54 mmscfd)
o 54 wells dewatering / producing gas (49 - Jan 2011)
o Fraccing summary:
o Total wells fracced increased to 55 (50 - Jan 2011)
o Rate of fracturing maintained since January at 2.5 wells per month (2 wells per month - Nov 2010, prior to that 1.36 per month)
o Fracturing rate expected to increase in H1 this year
o Total of 79 wells drilled, and a further 11 are ready for deviated drilling* (78 wells - Jan 2011). Great Eastern remains on track to achieve its fraccing and production targets, with a bank of drilled wells in hand yet to be fracced.
* Deviated drilling: Drilling multiple wells from the same location while maintaining the drainage area. This process is expected to increase time efficiency, leading to faster completions and accelerated production through minimising inter-location movements of rigs / frac fleet and other equipment.
o The 2nd drilling rig is expected in April 2011.
Marketing Highlights
Sales are in line with Company expectations and projections. With the signing of the additional major sales agreement announced in January of 2.10 MMSCFD of gas (under which we commenced supply in December 2010) and the signing of further contracts / MOU's, the total amount of gas currently under contract / MOU is 31.21 MMSCFD (28.87 MMSCFD - Jan 2011).
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 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. The PEL deed is expected to be signed within the next two months.
Commenting, Prashant Modi, President and COO of Great Eastern, said:
"Great Eastern continues to make solid progress. Production growth has been encouraging and we are in line to meet our financial and production targets. The deviated drilling process we have adopted is also expected greatly to enhance efficiency and reduce the time it takes for production to come on line."
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 5917
Adrian Trimmings
Goldman Sachs InternationalJulian Metherell +44 (0) 20 7774 1000
James Anderson
Pelham Bell Pottinger Public Relations
Philip Dennis +44 (0) 20 78613919
Elena Dobson + 44 (0) 2078613147