The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR') which has been incorporated into UK law by the European Union (Withdrawal) Act 2018.  Upon the publication of this announcement via Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.

14 July 2021

Great Eastern Energy Corporation Limited

("Great Eastern" or "the Company")

 Full Year Results Year ended 31 March 2021

Great Eastern Energy Corporation Limited (LSE: GEEC), the fully integrated, leading Indian Coal Bed Methane ("CBM") company, is pleased to announce its Preliminary Results for the 12 months ended 31 March 2021.

Abridged Financials for FY 2021:

* MTM (Mark to Market) is on account of the restatement of the foreign currency loans; DTE (Deferred Tax Expense) is on account of difference in depreciation rates used for financial accounts and tax accounts and other expenses like exchange fluctuation / MTM

** Per GDR

*** Pricing is based in Indian rupee ("INR")

·      The full set of the audited financial statement is available at the following link: https://www.geecl.com/financials.php

·    FY 2021 was an unprecedented year with the COVID-19 pandemic impacting global supply chains, amidst the biggest global health crisis ever faced.

·    As announced on November 11, 2020, in the Half Year Results to 30 September 2020, the COVID-19 pandemic had an adverse impact on Sales that were further compounded by the subsequent national lockdown that occurred in India.  However, to mitigate this impact, the Company has taken appropriate measures to optimize costs and increase efficiencies. 

·    Although sales volumes were impacted by the economic impact of the COVID-19 pandemic, reassuringly, the average gas sales prices received held up and remained strong, and the Company remained profitable.  Encouragingly, operations continue to grow with gas production increased from a full year average of 15.20 mmscfd to an average of 15.88 mmscfd in June 2021, including choked production.

·    The Company continues to focus on optimising its debt coupon rate and has been able to reduce the same from 10.32% in FY 2021 to 9.58% in the ongoing FY 2022.  Due to this, there will an annual saving, in FY 2022, of ~ $0.50m.

·    The Company is profitable and cash generative and continues to maintain sufficient liquidity to meet all of its financial obligations on time.

·    Shale gas and CBM reserves and resources in the Raniganj (South) block (as previously announced on November 15, 2018):

o  OGIP of 6.13 TCF (best estimate) / 9.25 TCF (high estimate)

o  3P + 3C + 3U is 2,988.40 BCF (2.99 TCF)

·    Undiscounted value of $13.78 billion

·    Discounted value of $4.31 billion

·    Since the last announcement on 7 November 2019, the Company had obtained the environment clearance for starting its Shale exploration program and continues to be in the process of obtaining the balance of final approvals expected later this year.  The Company is engaging with various vendors for commencing the Shale program.  Subject to the results obtained and analysed from the core wells, the Company intends to drill an optimum number of pilot production wells.

·    GAIL (India) Limited partially commissioned the "Jagdishpur - Haldia & Bokaro - Dhamra pipeline" on February 6, 2021.  Further work on laying the pipeline section to Kolkata is underway and it is expected to be completed by August 2022 as per the media reports.  This will provide the Company with the opportunity to expand its customer base and sales significantly by accessing the huge market of Kolkata and also to the wider State of West Bengal.  The transportation tariff of this pipeline has been fixed at INR 71.08/mmbtu ($0.94/mmbtu) including 12% for Goods and Services Tax.

·    India's LNG imports for the month of May 2021 were higher than the corresponding month of the previous year and the cumulative imports for the current year till May 2021 was higher by 24.86% compared with the corresponding period of the previous year. As per the publicly available data, the current average long term delivered LNG price in India is $12.20/mmbtu.  Transporting this gas to the eastern region via the above-mentioned pipeline would entail additional transportation costs mentioned above and other costs to customers in eastern India.  Great Eastern believes the resulting gas sales price ex pipeline to customers in eastern India will be in sync with its current average selling price and, together with the pipeline, will allow Great Eastern to sell additional gas sales volumes to new customers that will be financially attractive.

Report on Payments to Government

As required to be disclosed under the Disclosure and Transparency Rules of the UK Financial Conduct Authority, the Company has made the following payments to the Government of India and the West Bengal State Government for the financial year ended March 31, 2021:

1.   Income Tax - $186,362

2.   Royalty - $1,589,146

3.   Production Level Payment - $397,287

The payments were made in INR and converted into $ based on the average exchange rate for the said year.

Prashant Modi, Managing Director & CEO of Great Eastern, said:

"Despite the impact of a slowing World economy during the reporting period, the Global COVID-19 pandemic, and a slowdown in the growth rate of the Indian economy, gas sales prices, revenue and sales volume have largely remained resilient.  The Board would like to highlight that the Company's business and balance sheet has been able to comfortably withstand the severe impact of these unpreceded events. 

"In response to the pandemic, we have implemented a focused plan of optimising production, cutting costs, increasing efficiencies, and additional improvements continue to be systematically pursued. 

"Encouragingly, post balance sheet year end, World growth rates are rebounding and energy prices, that fell dramatically in March 2020, have returned to pre-pandemic levels with international oil prices currently above $70 per barrel.

"We are at an important point in the growth of our core business as a result of the opportunities offered by the GAIL pipeline that will allow us to expand our customer base and sales volumes and take advantage of our significant proven but as yet uncommitted gas reserves.  On completion, the GAIL pipeline will allow us to pursue further material organic growth into the large and untapped industrial market of Kolkata and into the wider State of West Bengal and we look forward to reporting on our new gas marketing initiatives as they unfold.  We also look forward to progressing our Shale exploration and appraisal project that represents another excellent organic growth opportunity for Great Eastern once all approvals are in place.

"With the steps being taken by the government to accelerate the growth of the Indian economy, demand for hydrocarbons in India will continue to grow, as is evident from rising LNG imports and where development of indigenous gas reserves like those held by Great Eastern can make a meaningful contribution.  Given climate change concerns and the need to control emissions, Great Eastern is encouraged that its business focus on gas, increasingly seen as an energy transition fuel, can assist in the global trend towards low carbon/carbon neutral energy supplies."

About the Company

A fully integrated gas production, development and exploration Company in India. Gas is being produced from the Raniganj (South) block in West Bengal, which covers 210 sq. km with 9.25 TCF of Original Gas-in-Place.  The Company's second license is the Mannargudi block in Tamil Nadu, which covers 667 sq. km with 0.98 TCF of Original Gas-in-Place.

Chairman's Statement

While the Indian economy faces a difficult situation in the wake of COVID-19 pandemic, the country has certain fundamental resilience which would help it tide over the crisis.

In the midst of the otherwise gloomy situation, the government has made an attempt to convert the crisis into an opportunity to push new and bold reforms which should yield positive results.

The Board is confident that the overall state of the economy will recover soon and continue to remain robust. Encouragingly, post balance sheet year end, World growth rates are rebounding and energy prices, that fell dramatically in March 2020, have returned to pre-pandemic levels with international oil prices currently above $70 per barrel.

The Company has achieved a strong financial performance and continues to drive future growth through increasing the production at the Raniganj (South) Block.

Great Eastern has contributed towards the national effort of reducing pollution through use of clean fuel.  By using gas in its own operations and by supplying gas to its customers, Great Eastern has helped improve the air quality and environmental footprint in the Company's operational area.  Given climate change concerns and the need to control emissions, Great Eastern is encouraged that its business focus on gas, increasingly seen as an energy transition fuel, can assist in the global trend towards low carbon/carbon neutral energy supplies.

The Company has continuously engaged with the local community and raised their quality of life by distributing food, organising medical camps, health initiatives, and sports activities, which have been widely appreciated.  The Company is also engaging with the local administration and community to help during these trying times of COVID-19.

The Company's second asset, Mannargudi block, is situated in the state of Tamil Nadu, and covers an area of 667 sq. km with 0.98 TCF Original Gas-in-Place. The block is currently under arbitration with the Government.