A glut of shale gas production may have driven down natural gas prices to 10-year lows in the US, but it's a different story in India's West Bengal state - allowing coal-bed-methane producer Great Eastern Energy to continue realising premium prices from its Raniganj block there.
Indeed, the group's average realised price in the period was $12.50 (£7.76) per million British thermal units (mmbtu), compared with a current US price of $2.37 per mmbtu. Accordingly, operating profits rose to $11.5m from $4.2m. Moreover, with the block close to several major industrial centres, management's plan to persuade local customers to use its gas - rather than importing liquid-based fuels, typically at between $13 and $19 per mmbtu - is gaining traction. Gas contracts for current and future delivery also grew 20 per cent in the year to 37.5m cubic feet per day (mmcf/d) and the completion of a second gas-gathering station takes processing capacity from 15mmcf/d to 32mmcf/d. True, the rupee weakened against the dollar during the year, which hit dollar reported profits, but production is growing - 40 new wells should be drilled in 2012.
Broker Arden Partners expects adjusted pre-tax profit of $10.7m for 2013, giving EPS of 7.2¢ ($5.4m and 4.6¢ for 2012).
GREAT EASTERN ENERGY CORPORATION (GEEC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 318p | MARKET VALUE: | £379m | |
| TOUCH: | 310-325p | 12-MONTH HIGH: | 428p | LOW: 280p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 62¢ | NET DEBT: | 118% | |
| Year to 31 Mar | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2008 | 0.12 | -2.51 | -0.46 | nil |
| 2009 | 0.70 | -6.54 | -1.20 | nil |
| 2010 | 2.95 | -8.47 | -15.0 | nil |
| 2011 | 13.5 | -0.26 | -0.50 | nil |
| 2012 | 23.7 | -2.75 | -4.70 | nil |
| % change | +76 | - | - | - |
| £1=$1.61 | ||||
