With two drilling rigs and two well fracturing units now in operation, Great Eastern Energy is building production at its coal-bed methane (CBM) acreage at Raniganj in India. The company has now drilled 96 wells, of which 68 are producing gas and removing water from wells (which reduces pressure and allows gas to flow). This represents a 66 per cent increase over the previous year, and production had reached 8.36m cubic feet of gas per day by the end of September.
Adding the second drilling and fracturing units means the company can now drill up to 40 fractured wells (which have tiny holes blasted into the drilled seams to increase gas flow rate) a year as part of its target to add a further 204 wells over the next six years. The company expects to announce an update on its gas resource in the first quarter of next year.
Great Eastern also expects to start deviated drilling in late November. Drilling wells at an angle from the same location increases the efficiency of drilling and means drill locations that are not accessible by road can be reached.
Away from Raniganj, the company has signed licences for its Mannargudi CBM block and expects to start work there in the first half of 2012. It also plans to bid for new licences when they are auctioned. There are no current forecasts for the company.
| GREAT EASTERN ENERGY (GEEC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 310p | MARKET VALUE: | £360m | |
| TOUCH: | 300-320p | 12-MONTH HIGH: | 433p | LOW: 275p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 53¢ | NET DEBT: | 130% | |
| Half-year to 30 Sep | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 5.5 | -1.26 | -2.20 | nil |
| 2011 | 10.8 | -4.92 | -8.50 | nil |
| % change | +96 | - | - | - |
£1=$1.598 | ||||
