Start of Trading on AIM
Published: 13/12/2005, 08:00
Great Eastern Energy Corp PLC 13 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 Bed Methane ("CBM") in India, announces the commencement of dealings today of its Global Depositary Receipts ("GDRs") on AIM, a market of the London Stock Exchange. This follows a successful fund-raising by the company of £12.1m and a placing of a further £6.9m of GDRs by existing shareholders, both at a price of 101 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 will trade 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 institutional investors during our IPO and are delighted to be joining AIM. The successful offer of our GDR's will provide Great Eastern Energy with the funds necessary to begin developing the first 20 wells in the company's plan to become a supplier of 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 involved with CBM. Mr Yogendra Kr Modi is Executive Chairman and Managing Director and Mr 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 involves drilling shallow wells into the coal seam, perforating and then fracturing the coal seams to increase porosity. Water is then pumped out of the coal seam to a sufficiently 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 modern techniques can identify coal beds and the gases that lie within. However, the complexities of fracturing coal seams and completion of the wells requires considerable 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 Raniganj coalfields of the Damodar Valley in West Bengal for the exploration and production of CBM under a production sharing agreement with the Indian Ministry of Petroleum and Natural Gas. The block is located approximately 200 km north-west of Kolkata and is located in an industrialised region of Damodar Valley in West Bengal. The region is served by a national highway and mainline railways. The Raniganj coalfield is the largest high grade coalfield in a fault system known as Gondwana Basin. Individual coal seams from this coalfield range in thickness from less than 1 metre to more than 5 meters and reach a cumulative thickness of more than 50 meters. Market The Indian economy's demand for energy resources is high. Less than 30% of crude oil demand is satisfied by domestic production and the country's first ever imports of liquified natural gas commenced in February 2004. Reserves Great Eastern Energy has drilled three pilot production wells in the Surajnagar area, southwest of Asansol. The three wells were completed successfully, with all wells drilled, cased, cemented, logged, perforated and fractured. From the core well samples Schlumberger has estimated that the total gas-in-place in Great Eastern Energy's licence area is approximately 1.386 tcf. The desorption tests carried out on the pilot wells showed a CBM content range of up to 426 standard cubic feet ("scf") per tonne of coal (with an average around 250 scf per tonne). Strategy To date, 3 pilot wells have been drilled and the company expects the drilling of a further 20 wells to commence during the first quarter of 2006. The development plan for the project involves drilling 100 wells over an estimated four year period. Sales from the original 3 pilot wells is expected to start during the first quarter of 2006. Use of Proceeds of the Placing The net proceeds of the Placing will be used to fund infrastructure projects and to develop the first 20 wells of the company's development plan. The directors of Great Eastern Energy also believe that listing on AIM will raise the Company's profile, allow access to capital markets and diversify its investor base. This information is provided by RNS The company news service from the London Stock Exchange