Chairman's Statement

Chairman's Statement


In FY 2017, we continued to make strong progress delivering our optimisation strategy.

Production achieved was 20.10 mmscfd.

Rate of production growth:

Period November 2015 to July 2016 July 2016 to November 2016 November 2016 to July 2017
Rate of increase of average production per month (mmscfd) 0.16 0.29 0.30
Growth Rate (%) over the previous period 85 % 4.60 %

The average sales price was as follows:

FY 2017 FY 2016
Average Price (Rs./scm) 21.45 21.32
Average Price($/mmbtu)* 10.07 10.26

* Pricing is based in Rs.

The Indian rupee depreciated by 2.5% over the year (Rs. 65.46 / $ to Rs. 67.09 / $)

A total of 156 wells (150 wells producing / dewatering) have been drilled at our Raniganj (South) block, which with planned dewatering and optimisation measures provides a substantial base for production growth.

Reserves


As announced in December 2016, the independent reserve engineers, Advance Resources International, Inc., increased in estimate of 1C, 2C, and 3C Reserves. Original-Gas-In-Place (OGIP) reconfirmed as 2.62 TCF.

Sales, Marketing, & Distribution


The Company has 51.38 mmscfd of gas under contract / MOU.

Great Eastern is well placed to supply gas in and around the highly industrialised region of Asansol-Raniganj-Durgapur through its own dedicated pipeline network.

Mannargudi CBM Block


The Company's second asset Mannargudi license is situated in the state of Tamil Nadu, southern India and covers an area of 667 sq. km with 0.98 TCF Gas-in-Place.

The block is currently under Arbitration with the Government.

Financials


Total revenue stood at US$ 28.82m in FY 2017, while EBITDA was US$ 13.29m for the year. The Company has a net debt of US$ 93.53m as at 31 March 2017 with a debt:equity ratio of 1.13.

The demand and supply dynamic for Indian gas, and the pricing environment, remains attractive and the Board is confident that it is likely to remain so for the foreseeable future.

CSR


Great Eastern has contributed towards improving the environment in this area with the use of clean energy. We continue conducting medical camps, blood donation camps, and community health initiatives, which is being widely appreciated. We have built roads from villages making commuting faster and easier for the community.

Indian Economy


The prospects of the Indian economy are currently marked by positive developments on several fronts.

  • Eventual roll out of some of the most ambitious structural reforms measures are expected to give major boost to the performance of the entire economy. These include:

    a) Implementation of the Goods and Services Tax (GST) framework

    b) Implementation of the Bankruptcy Code

    c) Further liberalisation of the FDI regime

  • Headline inflation is projected in the range of 2.0%-3.5% in the first half of the year and 3.5%-4.5% in the second half.

  • Overall current account deficit (CAD) narrowed to US$ 3.5 billion in Jan-Mar 2017 (0.6% of GDP), compared to US$ 8 billion in the previous quarter.

  • For the year as a whole, CAD stood at US$ 15 billion (0.7% of GDP) against US$ 22 billion in 2016 (1.1% of GDP).

  • FDI inflows stood at US$ 60.2 billion in 2016-17.

  • These should provide cushion against possible global turmoil and help maintain the currency exchange rate.

  • The growth rate is pegged in the 7.5% level for the current year.

Outlook


The Company continues to deliver on its optimisation programme and drive future growth through increasing the production at the Raniganj (South) Block. India is embarking on a high trajectory growth with investor friendly policies in place, thereby providing us with one of the most promising markets.

Yours truly,
Yogendra Kr. Modi

Executive Chairman