Great Eastern Energy (GEEC) turned earnings-positive at the full-year stage after a step-up in production. Moreover, prospects for the Indian coal bed methane (CBM) producer have markedly improved after a 25 per cent farm-in deal was signed last month with state-controlled Oil and Natural Gas Corporation for the Raniganj (North) block, located in West Bengal, with an estimated 1.5 trillion cubic feet of gas.
Group president Prashant Modi says the existing supply shortfall in India's gas markets meant that the 94 per cent increase in production from the Raniganj (South) block since May 2012 "flowed directly through to revenue". Raniganj (South) production increased to 17.3 million cubic feet of gas per day (mmscfd), while the volume of gas supply contracts rose 8 per cent 40.4 mmscfd. On a constant currency basis, revenue actually rose 40 per cent year-on-year, with cash profits up 48 per cent to Rs1.02bn (£11.3m).
In March, an independent assessment increased the proven and probable (2P) reserves at Raniganj (South) by 12 per cent to 139bn cubic feet. Great Eastern is also committed to drilling 30 pilot wells at the Mannargudi block, at least another 150 at Raniganj (South), and is moving ahead with a proposed listing on the Indian stock exchange.
Reflecting a falling rupee, Arden Partners has cut its adjusted earnings estimate for 2014 from 16.9¢ to 14.4¢ (2013: 8.4¢) per Global Depositary Receipt (GDR) - with 0.5 GDRs for each share.
| GREAT EASTERN ENERGY CORPORATION (GEEC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 271p | MARKET VALUE: | £323m | |
| TOUCH: | 262-280p | 12-MONTH HIGH: | 310p | LOW: 255p |
| DIVIDEND YIELD: | nil | PE RATIO: | 35 | |
| NET ASSET VALUE: | 65¢ | NET DEBT: | 131%* | |
| Year to 31 March | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 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 | -5.00 | nil |
| 2013 | 29.2 | 7.46 | 12.0 | nil |
| % change | +23 | - | - | - |
£1=$1.55 *Includes restricted deposits of $3.4m | ||||
