Great Eastern Energy Corporation Ltd.: Interim Results Six Months Ended 30th September 2007



    LONDON, Nov. 20 /CNW/ - Great Eastern Energy Corporation Ltd. (Great
Eastern), a Company involved in the exploration, development and production of
coal bed methane (CBM) natural gas in India, is pleased to announce its
results for the six months ended 30th September 2007.
    Great Eastern is pleased to report it has completed its debt programme,
putting in place the key component needed to progress the next phase of
drilling and achieve the production target outlined at the time of the IPO.
Other key elements needed to achieve this production target are also
progressing ahead or in line with expectations.

    
    Highlights:

    -   Gas Production increased to 2.4 MMSCFD:
      -    367% increase on June update
      -    60% increase on August trading update

    -   Finance:
      -    Completion of debt programme - secured US$ 88 million
      -    Cash position as at Nov 16, 2007 - US$ 5 million

    -   Sales progressing well:
      -    First commercial sales of CBM gas commence
      -    One CNG outlet established at well 10
      -    Two additional CNG outlets being commissioned
      -    Franchise agreement signed with Indian Oil Company (IOC) - 5
           additional CNG stations at IOC outlets. More will be established
           in due course

    -   Infrastructure:
      -    Gas Gathering Station on target to be completed Jan '08
      -    Rig on site and being commissioned
    

    Commenting, YK Modi, Chairman and CEO of Great Eastern, said:

    "We have made solid progress in the last six months. Production has
increased significantly and we have achieved our first commercial sales of 
CBM natural gas. The debt facility is now in place which will enable us to 
commence the next phase of our drilling programme and acts as a further 
validation of the commercial potential of CBM production in India."

    Chairman's statement

    I am pleased to report Great Eastern has made solid progress in the six 
months to 30th September, 2007. The Company now has proven Gas production and
the finances in place to achieve its stated medium term objective of 
35MMSCFD.
    The rate of current production is 2.4 MMSCFD, an increase of over 60% 
since the last update in August. Average production per well is substantially
ahead of independent forecasts and we are confident this rate will continue to
further increase significantly as the rate of dewatering increases and we frac
additional seams.
    Great Eastern is able to supply gas across the full spectrum of markets
within its immediate locality. These markets include compressed natural gas
('CNG') for vehicles as well as small and large industrial units.
    As previously stated, the Company has commenced initial industrial sales
of CBM as well as sales of CNG for vehicles in and around Asansol, West 
Bengal, India. The delivered price obtained is currently between $13 to 
$15/mcf. We have established a CNG outlet at well 10 and have commissioned two
further CNG outlets at wells 16 and 20.
    In October we entered into a franchise agreement with the Indian Oil
Corporation ("IOC"), a Fortune 500 company and India's largest downstream 
operation, to establish CNG dispensing stations at IOC retail outlets in the
cities located in and around the licence area. We expect the first of these to
be fully operational in December 2007, with four further outlets due for
completion in the coming months. We expect these five stations to dispense
approx. 1.5 mmscf of CNG per day at an average delivered price of over 
$15/mcf. IOC has a substantial number of retail outlets and as such there is
scope for the number of stations supplied with CNG to increase in line with
production. The supply of CBM natural gas direct as CNG is a world first.
    With the Indian economy continuing to see strong growth, the
corresponding market for natural gas has also remained buoyant. The market for
CNG is also being driven by a combination of cost and environmental  concerns,
encouraging vehicle owners to switch from traditional diesel to  gas.
    As at 16th November, the Company had cash on its balance sheet of US$ 5
million. I am pleased to report that further to the announcement in August we
have now secured US$88 million of debt facilities. This completes our debt
programme, putting in place the key outstanding element needed to progress the
next phase of drilling and associated infrastructure and in turn achieve the
productions targets outlined at the time of the IPO.
    The debt facility is provided by a consortium of 8 banks, led by the
State Bank of India. Prior to providing this facility, each bank conducted its
own independent due diligence on the project, which further validates the
potential of the Company's asset. The facility has been offered over an eight
year tenure and represents the first project financing of its kind in India.
    The rig was delivered to the site at the beginning of November and is
currently in the process of being commissioned. It will be ready for use by
January at which point the next phase of drilling will commence. The rig will
bring added flexibility to this campaign and also result in a reduction in
drilling costs. The Gas Gathering Station is also on target for completion in
January and the pipeline construction is progressing well.

    Outlook

    We are confident that with the Gas Gathering Station and pipeline
completed we can achieve further meaningful sales of gas in the next six
months. Furthermore, we look forward to starting the next phase of our
drilling programme on time in January 2008.
    With all the key elements now in place, combined with continuing strong 
gas demand fundamentals, we remain confident of the Company's prospects for
the for the coming six months and beyond.

    
    Interim Condensed Balance Sheet as at 30 September 2007

                   (In US Dollars unless otherwise stated)

                                                         As at         As at
                                                  30 September      31 March
                                   Notes                  2007          2007
    Assets
    Non-current assets
    Property, plant and equipment      8             3,804,803     1,181,024
    Capital work-in-progress          10            38,285,971    31,913,627
    Intangible assets                  9               385,328       368,571
    Prepayments                        5               132,674        66,122
    Other financial assets                              99,965        57,689
                                                    42,708,741    33,587,033

    Current assets
    Prepayments                        5             3,241,562       459,929
    Advance income tax                                 759,698       629,129
    Other financial assets                           1,148,273       968,431
    Cash and cash equivalents          3             1,910,468    11,032,180
    Restricted deposit with bank       4               647,531             -
                                                     7,707,532    13,089,669

    Total Assets                                    50,416,273    46,676,702
    Equity and liabilities
    Issued capital                                  12,246,781    12,246,781
    Share premium                                   33,301,944    33,301,944
    Retained earnings                               (2,939,555)   (2,305,483)
    Translation reserves                             5,208,839       945,822
    Total equity                                    47,818,009    44,189,064

    Non current liabilities
    Provisions                                          50,327        45,882
    Employee benefit liability                          42,362        40,122
    Deferred income tax liability      6                     -             -
                                                        92,689        86,004

    Current liabilities
    Trade and other payables                         2,492,993     2,387,869
    Provisions                                          12,582        13,765
                                                     2,505,575     2,401,634

    Total liabilities                                2,598,264     2,487,638
    Total equity and liabilities                    50,416,273    46,676,702



    Interim condensed income statement for six months ended 30 September
    2007

    (In US Dollars unless otherwise stated)

                                                       For six months period
                                                          ended 30 September
                                     Notes                    2007      2006

    Revenue                                               7272             -
    Other income                                          2460             -
    Personnel expenses                                (232,511)     (213,262)
    Depreciation and amortization      8&9             (52,534)      (20,254)
    Other operating expenses                          (670,031)     (735,709)
    Foreign exchange gain/(loss)                          3145         (1402)
    Operating profit/(loss)                           (942,199)     (970,627)
    Finance income                                     323,210       780,011
    Finance expense                                    (15,083)       (6,672)
    Finance income/(expense), net                      308,127       773,339
    Profit/(loss) before income tax                   (634,072)     (197,288)
    Income tax expense                                       -             -
    Profit/(loss) for the period                      (634,072)     (197,288)

    Loss per share
    - basic and dilutive (in cents)                    (0.1164)      (0.0362)



    Consolidated statement of changes in equity for the six months
    ended 30 September 2007

    (In US Dollars unless otherwise stated)

                     Issued        Share    Retained   Translation     Total
                    capital      premium    earnings       reserve    equity

    At April 1,
     2007        12,246,781   33,301,944  (2,305,483)    945,822   4,189,064
    Currency
     transaction
     differences          -            -           -   4,263,017   4,263,017
    Loss for the
     period               -            -    (634,072)          -    (634,072)
    At September
     30, 2007    12,246,781   33,301,944  (2,939,555)  5,208,839  47,818,009



    Consolidated statement of changes in equity for the six months
    ended 30 September 2006

    (In US Dollars unless otherwise stated)

                     Issued       Share     Retained   Translation     Total
                    capital     premium     earnings       reserve    equity

    At April
     1, 2006     12,246,781   33,301,944  (1,980,192)   (103,291) 43,465,242
    Loss for
     the period           -            -    (197,288)          -    (197,288)
    Input credit
     for VAT and
     service tax
     recognized           -            -      16,437           -      16,437
    Currency
     transaction
     differences          -            -           -  (1,248,519) (1,248,519)
    At September
     30, 2006    12,246,781   33,301,944  (2,161,043) (1,351,810) 42,035,872



    Interim Condensed Statement of Cash Flows for the six months
    ended 30 September 2007

    (In US Dollars unless otherwise stated)

                                               Six months ended September 30,
                                                        2007            2006
    A. Cash flows from operating activities
    Profit/(loss) after tax                         (634,072)       (197,288)
    Adjustments for:
    Interest expense                                  15,083               -
    Interest income                                 (323,210)       (780,011)
    Depreciation and amortization                     52,534          40,210
    Foreign exchange loss/(gain)                      (5,716)          1,402
    Provisions                                        (4,181)          8,650
    Operating profit /(loss)
      before working capital changes                (899,562)       (927,037)
      (Increase)/decrease in debtors                  (1,023)              -
      (Increase)/decrease in
      other receivables/prepayments               (2,848,082)     (1,038,017)
    Increase / (decrease)
     in payables and accruals                       (117,037)      3,095,366
    Net cash flows
     from operating activities                    (3,865,704)      1,130,312

    B. Cash flows from investing activities
    Cash paid for purchase of
    property, plant and equipment                   (486,918)        (56,120)
    Cash paid for capital work in progress
     (including well development cost)            (5,175,092)    (11,943,408)
    Cash paid for purchase
     of intangible asset                              (3,010)       (131,308)
    Cash paid for
     purchase of leasehold land                      (58,799)        (30,258)
    Proceeds/(payment) on
     encashment/(acquisitions)
     of short term bank deposits (Net)              (629,782)     15,186,840
    Interest received from investments               323,210         702,142
    Net cash flows
     from investing activities                    (6,030,391)      3,727,888

    C. Cash flows from financing activities
    Interest expense                                 (15,083)              -

    Net Cash flows from
     financing activities                            (15,083)              -

    Net changes in cash
     and cash equivalents (A+B+C)                 (9,911,178)      4,858,200

    Cash and Cash
      equivalents as on 1 April                   11,032,180       4,271,906
    Foreign currency translation
     difference on cash balances                     789,466        (126,537)
    Cash and Cash
     equivalents as on 30 September                1,910,468       9,003,569

    a) Cash and cash equivalents are same as that disclosed under note 3.

    b) Closing cash and cash equivalents include restricted deposits
       amounting to $1,019,762 (30 September 2006: 663,620).
    


    Notes to Interim Condensed Financial Information

    1. CORPORATE INFORMATION

    Great Eastern Energy Corporation Limited ('GEECL' or 'the Company') is a
    public limited company incorporated in India with its registered office
    at  1D, 'Bally High', 1 Ballygunge Park Road, Kolkata, India.

    The Company was incorporated in 1992 to explore, develop, distribute and
    market Coal Bed Methane or CBM in India. GEECL originally entered into a
    license agreement in December 1993 with Coal India Limited ('CIL') for
    exploration and development of CBM over an area of approximately
    210 Sq. km  (approximately 52,000 acres) in the Raniganj coalfields of
    West Bengal (the  Block). Following the transfer of CBM administration in
    India from the  Ministry of Coal to the Ministry of Petroleum and Natural
    Gas ('MoPNG'), the Company entered into the existing CBM production
    sharing contract ('PSC') on 31 May 2001 for the Block.

    The PSC is effective from 9 November 2001 as a result of the granting by
    Government of West Bengal of the Petroleum Exploration License on the
    same date and provides for a five year initial assessment and market
    development phase, followed by a five year development phase and then a
    twenty-five year production phase, extendable with the approval of the
    Government of India (GOI). The PSC also provides that the Company can
    produce gas during any phase with the prior approval of the GOI. Out of
    23 wells, 2 wells have started producing gas, since 14 July 2007 and
    28 August 2007 respectively. The Company has started selling such gas
    produced to small industries in  nearby areas. Other 21 wells are still
    in the exploratory and market development phase with dewatering and
    production testing underway.

    The Company has its primary listing on Alternative Investment Market.

    This condensed consolidated interim financial information was approved
    for issue on 16 November 2007.

    2. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES

    Basis of preparation

    The interim condensed financial information for the six months period
    ended 30 September 2007 have been prepared in accordance with IAS-34
    Interim Financial Reporting.

    The interim condensed financial information do not include all the
    information and disclosures required in the annual financial information,
    and should be read in conjunction with the Company's annual audited
    financial information as at 31 March, 2007.

    The financial information are presented in US Dollar ('$') and all values
    are rounded to the nearest US dollar except when otherwise indicated.

    Significant Accounting Policies and estimates

    The accounting polices adopted in preparation of the interim condensed
    financial information are consistent with those followed in the
    preparation of the Company's annual audited financial information for the
    year ended 31 March 2007.

    The following new standards, amendments to standards and interpretations
    are mandatory for financial year beginning 1 April 2007.

    
    -   IFRS 7, 'Financial instruments: Disclosures', and the complementary
        amendment to to IAS 1, 'Presentation of financial information-
        Capital disclosures' effective for annual periods beginning on or
        after 1 January, 2007, introduces new disclosures relating to
        financial instruments. The Company is in the process of assessing the
        impact of IFRS 7 and the amendment to IAS 1. These disclosures are
        not required for the interim reporting period.

    -   IFRIC 8, 'Scope of IFRS 2', effective for annual periods beginning on
        or after 1 May 2006. This Interpretation applies to transactions in
        which an entity or an entity's shareholders have granted equity
        instruments or incurred a liability to transfer cash or other assets
        for amounts that are based on the price (or value) of the entity's
        shares or other equity instruments of the entity when the
        identifiable consideration received (or to be received) by the
        entity, including cash and the fair value of identifiable non-cash
        consideration (if any), appears to be less than the fair value of the
        equity instruments granted or liability incurred. This standard does
        not have any impact on the Company's financial information.

    -   IFRIC 9, 'Reassessment of Embedded Derivatives', effective for annual
        periods beginning on or after 1 June 2006. An interpretation requires
        an entity shall assess whether an embedded derivative is required to
        be separated from the host contract and accounted for as a derivative
        when the entity first becomes a party to the contract. This standard
        does not have any impact on the Company's financial information.

    -   IFRIC 10, 'Interim financial reporting and impairment', prohibits the
        impairment losses recognized in an interim period on goodwill and
        investments in equity instruments and in financial assets carried at
        cost to be reversed at a subsequent balance sheet date.
        Interpretation is effective for annual periods beginning on or after
        1 November 2006. This standard does not have any impact on the
        Company's financial information.

    -   IFRIC 11, 'IFRS 2 - Group and treasury share transactions' effective
        for annual period beginning on or after 1 March 2007, IFRIC 11
        provides guidance on whether share-based transactions involving
        treasury shares or involving group entities (for example, options
        over a parent's shares) should be accounted for as equity-settled or
        cash-settled share-based payment transactions in the stand-alone
        accounts of the parent and group companies. The interpretation is not
        relevant to the Company's operation as the Company do not share-based
        payments transactions.

    The following new standards, amendments to standards and interpretations
    have been issued but are not effective for financial year beginning
    1 April 2007 and have not been early adopted:

    -   IFRS 8, 'Operating segments' (effective from 1 January 2009). IFRS 8
        replaces IAS 14 and aligns segment reporting with the requirements of
        the US standard SFAS 131, 'Disclosures about segments of an
        enterprise and related information'. The new standard requires a
        'management approach', under which segment information is presented
        on the same basis as that used for internal reporting purposes. This
        standard does not have any impact on the Company's financial
        information.

    -   IFRIC 14, 'IAS 19 - The limit on a defined benefit asset, minimum
        funding requirements and their interaction' (effective from 1 January
        2008). IFRIC 14 provides guidance on assessing the limit in IAS 19 on
        the amount of the surplus that can be recognised as an asset. It also
        explains how the pension asset or liability may be affected by a
        statutory or contractual minimum funding requirement. The Company
        will apply IFRIC 14 from 1 April 2008, but it is not expected to have
        any impact on the Company's accounts.

    Interpretations to existing standards that are not yet effective and not
    relevant for the Company's operations.

    The following interpretations to existing standards have been published
    and are mandatory for the Company's accounting periods beginning on or
    after 1 April 2008 or later periods but are not relevant for the
    Company's operations:

    -   IFRIC 12, 'Service concession arrangements' (effective from 1 January
        2008). IFRIC 12 applies to contractual arrangements whereby a private
        sector operator participates in the development, financing, operation
        and maintenance of infrastructure for public sector services. IFRIC
        12 is not relevant to the Company's operations because the Company do
        provide for public sector services.

    -   IFRIC 13, 'Customer loyalty programmes' (effective from 1 July 2008).
        IFRIC 13 clarifies that where goods or services are sold together
        with a customer loyalty incentive (for example, loyalty points or
        free products), the arrangement is a multiple-element arrangement and
        the consideration receivable from the customer is allocated between
        the components of the arrangement in using fair values. IFRIC 13 is
        not relevant to the Company's operations because the Company do not
        operate any loyalty programmes.

    3. Cash and Cash equivalents

                                                         As at
                                      30 September 2007        31 March 2007

    Cash in hand                                    988                  348
    Cash at banks
      - on current account                      273,848              105,400
      - on fixed deposit                      1,635,632           10,926,432

                                              1,910,468           11,032,180
    

    Fixed deposits with banks include $1,019,762 (31 March 2007: $29,239)
    kept as margin money deposits against letter of credit issued by banks on
    behalf of the Company.

    4. Restricted deposits with bank

    Restricted deposits with bank represent margin money deposits against
    letters of credit issued by banks on behalf of the Company. Restrictions
    on such deposits including those considered as part of Cash and Cash
    equivalents (refer note 3 above) are released on the expiry of the terms
    of the respective arrangements.

    5. Prepayments

    Prepayments includes advances of $3,206,908(31 March 2007: $405,662) made
    to various vendors for purchase of equipment and construction of Gas
    Gathering Station('GGS').

    6. Income tax

    There is no current tax liability in view of losses for the period. The
    Company has not carried forward the losses incurred till 31 March 2005,
    however from the year ended 31 March 2006 the Company has carried forward
    losses for set-off against future taxable profits. Further as the Company
    will be enjoying a tax holiday period in accordance with the Income Tax
    Act in India, no deferred tax assets has been recognized during this
    period.

    7. Segment reporting

    The Company operates in a single geographical segment, being India, and
    in a single business segment, being the production and sale of gas.
    Hence, no separate segment information has been furnished herewith.

    8. Property, plant and equipment

    During the six months ended 30 September 2007, the Company has
    capitalised 2 wells and acquired cascades, generator sets and other
    machinery. There were no disposals during the period.

    
                                                        As at September 30,

                                                   2007                 2006
    Opening net book balance as on 1 April    1,181,024            1,039,640
    Additions (including capitalisation
     of 2 wells (refer note 11))              2,508,499               65,729
    Depreciation                                (67,921)             (40,136)
    Foreign exchange
     fluctuation on translation                 183,201               (1,828)
    Closing net book
     balance as on 30 September               3,804,803            1,063,405
    

    9. Intangible assets

    Intangible assets comprises of cost of SAP implementation and cost of
    acquisition of rights for gas exploration. The amortization during six
    months ended 30 September 2007 charged to statement of income amounts to
    $21,440 (30 September 2006: $14,668). The Company has acquired computer
    software during six months ended 30 September 2007 capitalized as
    intangible of $3,010 (31 March 2007: $128,681)

    Cost of SAP implementation is being amortised over a period of 5 years
    which is the useful life of such software as assessed by the management.
    Gas Exploration rights are being amortised over a period of 25 years
    commencing from the current year when commercial production has started.

    10. Capital work-in-progress

    During the six months period ended 30 September 2007, the Company has not
    drilled any new wells. However, the cost of workover expenses like sand
    cleaning, remedial cementing, pump setting and related services, which
    have been outsourced, has been taken to capital work-in-progress for
    existing 23 wells including 2 producing wells till commencement of
    commercial production. All other expenses incurred with respect to
    developing and maintaining wells, till they become producing properties
    are capitalised and included under capital work-in-progress. During the
    period, the Company has incurred $8,390,295 (30 September 2006:
    $11,013,021 ) as additions to capital work-in-progress.

    
                                                       As at 30 September,
                                                   2007                2006

    Opening net book balance as on 1 April   31,913,627          15,418,158
    Additions                                 8,392,602          11,013,021
    Capitalisation                           (2,020,258)                  -
    Closing net book balance as on
     30 September                            38,285,971          26,431,179

    During the six months ended 30 September 2007, the Company has written
    down damaged and unusable materials amounting to $nil (30 September 2006:
    $6,672).

    11. Well capitalisation

    a) During the period the Company has capitalized two wells amounting to
       $20,20,258 (March 2007: $nil). All exploration cost involved in
       drilling, cementing, fracturing and drilling of exploratory core holes
       are initially capitalized as Capital work-in-progress till the time
       these are ready for commercial use. Cost of exploratory wells
       including apportionment of pre operative expenses and allocated
       depreciation of support equipment.

    b) Depletion: Commercially producing wells are depleted using unit of
       production method based on related proved reserves. Proved reserves of
       gas per well are technically re-assessed in house every year at the
       end of period/year based on technical data available.
    

    12. Retirement benefits

    The Company has two post employment unfunded benefit plans, namely
    gratuity and superannuation and one state administered provident fund,
    which is a funded defined contribution plan. Gratuity and superannuation
    are defined benefit schemes. The Company has made provision for gratuity
    and superannuation benefits on the basis of actuarial valuation.

    13. Leases and arrangements containing lease

    The Company has entered into Equipment lease and other arrangements with
    various contractors for development of its wells, whereby the specific
    assets leased by the contractors are used only at the Company's well
    development site and such arrangements convey the right to use the
    assets. Some of these arrangements contain lease as per IFRIC 4. The
    significant terms and arrangements are described below.

    
    a) Drilling rig has been taken on Lease from John Energy Limited, till
       31 December 2007. The arrangements have terms describing the operating
       rate per hour, the standby rate per hour and the repair rate per hour.
       The Lease arrangement is not cancelable and terminates only on
       happening of a 'force majeure' event. The total lease payments made
       under this contract during the period are $284,361 (30 September 2006:
       $115,981)

    The future minimum rentals payable under such type of lease are:

                                                            30 September
                                                       2007             2006
    Within one year                                 111,122           39,164
    After one year but
     not more than five years                           Nil              Nil

    b) For cementing services during workover operation, equipment and
       personnel from Schlumberger Asia Services Limited have been hired. The
       arrangement is cancelable at the option of either party to the
       contract.

    c) Wire-line logging of core holes has been contracted to Scintrex
       Geophyscial Services (India) Private Limited, which includes hiring of
       drilling equipments along with the services of its crew. The lease
       terms include rate of equipments hiring along with the payments
       towards non-lease elements. The lease arrangement is not cancelable
       and terminates only on  happening of a 'force majeure' event. The work
       was completed as on 30 September 2006 under this arrangement. The
       Company has not entered into a new arrangement with the contractor
       during the current period under review.

    d) The Wire-line logging and perforation services for production wells
       have been contracted to HLS Asia Limited. The terms of contract
       include separate payment arrangements towards lease and non-lease
       payments. The lease arrangement is cancelable at the option of either
       party to the contract. The work was completed as on 20 December 2006
       under this arrangement. The Company has not entered into a new
       arrangement with the contractor during the current period under
       review.

    e) The Company has entered into two different arrangements with Mitchell
       Drilling Operations PTY Limited and Mitchell Drilling International
       PTY Limited for drilling of production wells and core holes
       respectively. The terms of contract include comprehensive payment
       rates to include both lease and non-lease elements which are not
       separable. The arrangement is cancelable at the option of either party
       to the contract. The work was completed on 6 October 2006 under these
       arrangements. The Company has not entered into a new arrangement with
       the contractor during the current period under review.

    f) For cementing and fracturing of wells, equipment and personnel from BJ
       Services Company Middle East Limited have been hired. The arrangement
       is cancelable at the option of either party to the contract. The terms
       of contract include separate payment arrangements towards lease and
       non-lease elements. The work was completed as on 21 December 2006
       under this arrangement. The Company has not entered into a new
       arrangement with the contractor during the current period under
       review.

    The arrangements mentioned in (b) to (f) include non-lease elements also
    and are being treated as capital work-in-progress along with other costs.
    The segregation of lease and non-lease elements under some of these
    arrangements is not possible. The details of total expenses during the
    six months period ended 30 September 2007 are as follows.

                                                       For six months period
                                                          ended 30 September

                                                       2007             2006
    Towards Minimum Lease payments:-
    Cementing and fracturing charges                229,100          834,937
    Logging and wire-line charges                       NIL          502,400

    Towards Lease payments under arrangements
      where lease and non-lease payments are
      combined Drilling Charges
      (including core hole drilling)                 20,093        2,881,239

    g) The Company has taken a building on finance lease, the net carrying
       amount of which is $293,894 (30 September 2006: $273,524). The entire
       consideration has been paid during the year 2005-06(and there are no
       future lease rentals payable.

    h) The Company has acquired a property under an operating lease for an
       initial period of three years renewable by mutual consent on mutually
       agreeable terms. The lease is also cancelable at the option of either
       party by serving of appropriate notice. The lease rental of $ 50,511
       (30 September 2006: $42,768) incurred has been charged to the profit
       and loss account.

    i) The Company has entered into a contract with Indian Compressor Limited
       for hiring of compressors on operating lease basis, which is
       cancellable subject to certain conditions. The lease period is for two
       years and further renewable for same period of time. The lease rentals
       of $12,790 (30 September 2006: Nil) has been paid during the year.

    j) The Company has taken land on lease on which wells are being
       developed. The lease period ranges from 30-99 years. The entire amount
       of consideration in the form of lease premium has been paid upon
       acquisition. The premium paid for the period amounts to $58,799
       (30 September 2006:$20,593), which has been disclosed separately under
       the head current and non- current assets.

    14. Commitments and Contingencies

    a) The claim from Directorate General of Hydrocarbons (DGH), Government
       of India, towards additional fee of $ 103,171 (31 March,2007 -$
       94,058) for Gas Exploration Licence, continues to be under arbitration
       with both the parties to the dispute filing their additional comments
       on the matter with the Arbitrator. During the period, DGH has also
       raised claim towards interest on the amount of shortfall, since the
       date of the contract. Such additional amount of interest amounts to $
       137,518 (31 March 2007: $209,271) which along with the original claim
       has been treated by the Company as a Contingent Liability. There has
       been no other change to the Contingencies as were existing as at 31
       March 2007.

    b) Prepayments (Current) include $54,439 (31 March 2007: $49,630)
       recoverable M/s Adkins Services Inc., (Adkins), a drilling contractor
       which has been fully impaired. The contract with Adkins was terminated
       by the Company on the ground of non-performance and continued breach
       of contract. The Company in addition to the above amount has made a
       claim of $4.98million (31 March 2007 : $4.54 million) for damages on
       account of delay in providing the services by the said contractor. The
       Contractor has also filed a counter claim of $7.00 million (31 March
       2007: $6.38 million) against the Company for loss of profit, damages
       etc which the Company disputes. The contractor has also claimed,
       interest at the rate of 15% per annum from August 2004 till the date
       of realization, interim award and costs incurred on litigation. The
       Company had filed an application before Hon'ble High Court at Calcutta
       for the appointment of Presiding Arbitrator for the arbitral
       proceedings to be started. The Hon'ble High Court at Calcutta vide its
       order dated 18 March 2004 has appointed the Presiding Arbitrator.
       Necessary adjustments, if any, will be made in the financial
       information once the arbitration proceedings are complete.

    There are no new contingencies existing for the Company, other than those
    mentioned above arising out of activities and operations during the six
    months period ended 30 September 2007.

    15. Capital Commitments

    At 30 September 2007, the Company has following Capital Commitments.

                                                         As at September 30,
                                                       2007             2006

    Capital Assets                                8,750,868        1,932,215

    16. Key business developments

    a) During the period the Company has awarded the contract for lying of
       MDPE pipe line, to Universal Energies Ltd . Laying of MDPE pipeline
       pursuant to the contract has commenced during the period. This
       pipeline would facilitate interconnection of wells to GGS. Pipeline
       laying activities are expected to be completed by December 2007.

    b) The Company has also awarded contract to Sopan O & M (P) Ltd for
       supply and commissioning of GGS packages. It is expected that
       installation of process equipment will be completed by December'07
       end. After completion of process equipment installation, GGS will be
       able to compress CBM into CNG as well as be able to deliver the gas
       through pipeline.

    c) The Company has awarded contract to M/s. Universal Energy Ltd for
       lying LPE coated steel pipe line. This pipe line will be used for the
       transportation of CNG from Gas Gathering Station ('GGS') to nearby
       City Gas Station (CGS) and different small outlets from where gases
       will be distributed to the different customers.

    d) Pursuant to the Company's plan to drill addition wells in the next
       phase and to meet the capital requirement thereof, the Company has
       appointed SBI Capital Markets Limited ('SBI Cap'), a consultant to
       facilitate raising of funds. The Company intends to borrow
       $ 88.07 million from a consortium of banks and financial institutions
       to fund the future project expenses. The Company has obtained sanction
       letters for an amount of $74.23 million as at 12 November 2007.
       Disbursement of entire loan amount would be dependent upon obtaining
       the sanctions for remaining balance of $ 13.84 million.

    17. Events occurring after balance sheet date

    The Company has entered into an agreement with Indian Oil Corporation
    Limited (IOC) on 30 October 2007, for sale of Coal Bed Methane Gas and
    developing City Gas Distribution network including CNG retailing in the
    state of West Bengal in India.

    18. Foreign Currency Translation

    The Company has converted Indian Rupees ('INR') balances to $ equivalent
    balances on the following basis:

    -   For conversion of all assets and liabilities, other than equity, as
        at the reporting dates, the exchange rates prevailing as at the
        reporting date have been used, which are as follows:

    -   as at 30 September 2007: $1 = INR 39.74

    -   as at 30 September 2006: $1 = INR 45.96

    -   For conversion of all expenses and income on income statement and the
        cash flow statement, for the respective periods, periodic average
        exchange rates have been used, which are as follows:

    -   For the six months period ended 30 September 2007:
        $1 = INR 40.86

    -   For the six months period ended 30 September 2006:
        $1 = INR 45.95

    -   For conversion of issued Share Capital and Share Premium, historical
        exchange rates prevailing on the respective dates of issue of shares
        have been taken into consideration.

    -   For conversion of authorized share capital, historical exchange rates
        prevailing on the respective dates of authorization of such share
        capital have been taken into consideration.

    19. Related Party Disclosures

    The Company has transactions with following related parties during the
    periods ended 30 September 2007 and 2006.

                                                 As at                 As at
                                           30 September         30 September
                                                   2007                 2006

    a) Shareholders having          - YKM Holdings Pvt.   - YKM Holdings Pvt.
        Significant influence         Ltd.                  Ltd.

    b) Key Management               - Mr. Y K Modi        - Mr. Y K Modi
        Personnel
                                    - Mr. P Murari        - Mr. P Modi (upto
                                                               31July,2006)
                                    - Mr. Kashi Nath      - P K Roy (upto 17
                                      Memani                August 2006)

                                    - Mr Haigreve Khaitan
                                                          - Mr. P Murari
                                    - Mr. Serajul Haq
                                         Khan             - Mr. Kashi Nath
                                                            Memani
                                    - Mr Paul Sebastian
                                      Zuckerman           - Mr Haigreve
                                                            Khaitan

                                                          - Mr. Serajul Haq
                                                            Khan

                                                          - Mr Paul Sebastian
                                                            Zuckerman
    c) Relative of key management
        personnel                  - Mr Prashant Modi

    d) Entities that are           - Indian Purchase.com  - Indian
        controlled, jointly          Infoware Limited       Purchase.com
        controlled or                                       Infoware Limited
        significantly
        influenced by, or for
        which significant voting   - Khaitan & Co.         - Khaitan & Co.
        power in such entity
        resides with,directly or   - Centurian Bank of
        indirectly, any individual   Punjab Limited
        or close family member of
        such individual
        Referred to in (b) above   - KNM Advisory
                                     Private Ltd
    





For further information:

For further information: Great Eastern Energy, YK Modi, Chairman & CEO,
+44(0)20-7743-6663; Prashant Modi, President & COO, +44(0)20-7743-6663; Pelham
Public Relations, Philip Dennis, +44(0)20-7743-6663; Hugh Barker,
+44(0)20-3008-5009; Arden Partners, Richard Day, +44(0)20-7398-1632; Tom
Fyson

Organization Profile

GREAT EASTERN ENERGY CORPORATION LTD.

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