Great Eastern Energy plans IPO Launch this fiscal Year

Great Eastern Energy Corporation Ltd plans to raise around Rs 400 crore through an initial public offering this fiscal to part-fund drilling of nearly 300 wells and distribution of gas for industrial purposes in West Bengal.

The Gurgaon-based company also plans to invest nearly Rs 2,825 crore in two phases in West Bengal to develop the hydrocarbon production.

The company is the country?s first private sector company engaged in exploration, development, production, distribution and sale of natural gas from coal-seams, commonly called coal-bed methane.

The Director-General of Hydrocarbons had given approval for drilling of 100 wells. The company proposes to drill another 200 before 2016.

With the IPO, Great Eastern would be diluting 10 per cent of equity to use the proceeds to fund drilling of wells in the CBM block it received through nomination in May 2001 for 35 years. Financial institutions own 35 per cent of the company, which has an equity base of Rs 203 crore.

Last year, SBI had sanctioned a loan of Rs 350 crore to Great Eastern. Great Eastern energy might bid for more CBM blocks, depending on evaluation and feasibility, in the fourth round of bidding. The company is focused on West Bengal?s coal-bearing areas where methane gas escapes into the atmosphere and damages the ozone.

It is expected to result in the demethanation of coal-beds and avoidance of emissions into the atmosphere. Great Eastern is exploring and developing production wells for CBM in Damodar Valley (Raniganj coal-field), near Asansol city in West Bengal. At present, 31 of its wells produce CBM from its Raniganj block spanning 210 sq.km where the gas-in-place is estimated to be 1.92 trillion cubic feet.

Great Eastern has completed 31 wells, while 22 are in various stages of completion. It has commissioned one gas-gathering station and nearly 110-km-long pipeline network is at various stages of development, reports The Hindu Business Line.