The ongoing ramp-up in production at the Raniganj (South) block made up for a 1.7 per cent drop in gas prices for Great Eastern Energy (GEEC). The India-focused coal bed methane (CBM) producer booked a 13 per cent increase in interim operating profits to $11.1m (£7.1m), while the volume of gas under contract has risen by 4.7 per cent since November 2013.
Pipeline upgrades and new pumping infrastructure helped bump up average daily production capacity by 16 per cent to 22.8m standard cubic feet of gas a day (scfd). At the same time, daily gas sales rose 28 per cent to 10.4m scfd. A total of 156 wells have now been drilled at the Raniganj (South) block, which should underpin further growth as they are gradually brought into full production. There was also progress on the reserves front. In March, an independent assessment boosted Great Eastern's proven and probable (2P) measure by over a third to 187bn cubic feet.
Like other Indian energy providers, Great Eastern should benefit from the economic reforms being initiated by a new business-friendly administration in Delhi. The country also struggles with persistent energy deficits, underpinning the company's basic business case.
Arden Partners predicts adjusted pre-tax profits and EPS of $16m and 9¢ for the full year, rising to $19.2m and 10.9¢ in 2015-16.
| GREAT EASTERN ENERGY CORP (GEEC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 110p | MARKET VALUE: | £131m | |
| TOUCH: | 105-115p | 12-MONTH HIGH: | 158p | LOW: 110p |
| DIVIDEND YIELD: | nil | PE RATIO: | 7 | |
| NET ASSET VALUE: | 70¢ | NET DEBT: | 121% * | |
| Half-year to 30 Sep | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2013 | 15.4 | 0.3 | 0.4 | nil |
| 2014 | 19.3 | 7.8 | 9.7 | nil |
| % change | +26 | - | - | - |
£1 = $1.56 *Includes restricted deposits of $0.90m | ||||
