CBM : Potential and Challenges Petrofed, New Delhi

08 November 2013

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Disclaimer

Great Eastern Energy Corporation Limited is proposing, subject to market

conditions and other considerations, a public issue of its equity shares and has

filed its Draft Red Herring Prospectus (“DRHP”) with the Securities & Exchange

Board of India (“SEBI”). The DRHP is available on the website of SEBI at

(www.sebi.gov.in), Stock Exchanges at (www.bseindia.com) and

(www.nseindia.com) and the Book Running Lead Manager

(www.icicisecurities.com). This presentation does not constitute or form part of any

offer or invitation to sell or issue, or any solicitation of any offer to purchase or

subscribe for, any equity shares, nor shall it or any part of it nor the fact of its

distribution form the basis of, or be relied on in connection with, any contract or

investment decision. The Equity Shares of the Company have not been and will not

be registered under the U.S. Securities Act 1933, as amended or any state securities

laws in the United States. This presentation may not be released in the United

States. This presentation does not constitute an offer of securities for sale in any

jurisdiction, including the United States, and any securities described in this

presentation may not be offered or sold in the United States, except pursuant to an

exemption from, or in a transaction not subject to, the registration requirements of

the U.S. Securities Act.

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Our Coal Bed Methane (CBM) Blocks

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Downstream

Midstream

Tamil Nadu

Raniganj (South)

Mannargudi

• License area 210 Sq KM

• Estimated Gas in Place 2.40

TCF

• Situated in West Bengal’s

industrial belt

• Area is a hub of various SME’s

Raniganj (South) block

Mannargudi block

• License area 667 Sq KM

• 0.98 TCF Gas in Place as per

DGH

• Existing Pipeline Infrastructure

• Final approval expected from

the State Government

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DOWNSTREAM

MIDSTREAM

Raniganj (South) Block, West Bengal

— 2.40 TCF of OGIP

— 153 wells drilled

— 147 wells to be drilled; Total 300 wells

— Production achieved 20.40 mmscfd

— Increase of 7% in 3P reserves from May 2012, and 47% from Sep 2011

Mannargudi Block, Tamil Nadu

— 0.98 TCF of OGIP

— Commence work once expected approvals received

Raniganj (North) Block, West Bengal

— Awarded 25% Participating Interest by ONGC, subject to Joint Operatorship

Agreement (JOA) and Government approvals

Gas Gathering capacity increased from 15 mmscfd to 31.95 mmscfd, a 113%

increase

CNG supply agreement with Indian Oil and Bharat Petroleum

FIRST COMPANY IN INDIA TO START COMMERICAL PRODUCTION OF CBM IN 2007

UPSTREAM

OVERVIEW

Two CBM Blocks in India; One at Raniganj (South) in West Bengal and other at

Mannargudi in Tamil Nadu

Listed on the Main board of the London Stock Exchange (LSE)

Great Eastern Energy Corporation Ltd.

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Developing Customer Relationships

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CONTINUING TO LEVERAGE OUR INFRASTRUCTURE ADVANTAGE

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Deviated Drilling

Multiple wells from the same

geographic location

Inter-location movement is not

needed between wells

— Equipment rig up / down in a few

hours, not a few days

— Results in faster completion and

saving in costs

Reduces internal pipeline

infrastructure connecting the

wells to the Gas Gathering

Station

Reduces on-site infrastructure

facilities otherwise required for

each well separately

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Accelerated Production At Lower Cost

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Coil Tube Fracturing

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Coil-tubing hydra-jetting

perforation gives larger dia

holes with better penetration

Single run can complete

multi-stage completion

Easy sand cleaning by

reverse circulation

No Explosives needed

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Environmental Stewardship Strategy In Development Of CBM

First CBM company in India to be accredited with ISO:9001, OHSAS:18001, and

ISO:14001

Use of newer exploration and evaluation techniques for quantification of CBM

Reservoir

Deviated drilling to maximize productivity and drainage capability while at the same

time reducing the footprint

Use of self contained, extremely mobile rig to have a compact pad site with less

environmental disturbance

Use of advance techniques in Well Bore integrity

Strategic planning for pipeline connections to reduce gas flaring

MAINTAINING INTERNATIONAL QUALITY, HEALTH, SAFETY & ENVIRONMENT STANDARDS

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A Responsible Partner To Our Local Communities

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WE REMAIN COMMITTED TO CORPORATE SOCIAL RESPONSIBILITY

Medical camps

Blood donation camps

Health awareness program

Blanket distribution to the underprivileged

Health

Education & Employment

Recreation

Energy Access to sustainable sources of clean, reliable

and affordable energy

Mitigation of climate changes

Built study centre & distribution of books

Arrange evening classes for senior citizens in remote areas

Training / skills development for local community

Provide sponsorship to students

Sponsorship of state level swimming competition,

football, cricket, kabbadi tournaments

Organized and sponsored Rock climbing training

course & a marathon race “Asansol Marathon-

2012”

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A Responsible Partner To Our Local Communities

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ECONOMIC TIMES AWARD FOR CORPORATE SOCIAL RESPONSIBILITY

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A Responsible Partner To Our Local Communities

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IMPROVING WELL-BEING WHERE WE OPERATE

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Overview of CBM Process

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CBM Well vs Conventional Gas Well

Gas Water

Time

Conventional Gas

Da

ily P

rod

uc

tio

n

CBM Production

Da

ily P

rod

uc

tio

n

Gas

Water

Time

Dewatering Stable production Decline

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Unconventional Potential Gas in India: CBM

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Source: DGH

CBM resources about 92 TCF

22 CBM blocks have so far been

awarded (11 blocks being relinquished)

GEECL, first company to start

commercial production

Contract Terms

No Cost Recovery

Royalty and Production level

Payment (PLP) contract

No upfront payment

No signature bonus

Exemption from payment of

customs duty on imports

Freedom to sell gas in the

domestic market

CBM Blocks

First Commercially

producing CBM Block

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Advantages of CBM

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Methane Avoidance:

Recovery of CBM makes future mining safer

Avoidance of Methane emissions during future mining

Fuel Switching

Used in various industries who are consuming polluting fuels

Cleanest burning Fuel

Used for Compressed Natural Gas (CNG) for Vehicles

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CBM Development

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Scale of Reserves

Reserves should be significantly large to be economically viable

Geography

Reservoir requires appropriate distribution of well density for better field

development and ease of land access

Drilling

Use of appropriate drilling techniques to maximize yield from a single location

Fracturing

Use of appropriate frac techniques if required

Infrastructure

Pipeline access

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Regulatory Issues

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CBM Contracts are NOT based on Cost Recovery Model, but the contracts have

clauses as a “hang over” from Cost Recovery contracts. Some are as follows:

Relinquishment clause should be removed. Since there is no cost recovery in the CBM

Contract, therefore, it is in the best interest of the Contractor to use the entire block for

monetising the CBM resource. If the area has no gas potential, then it will be in the

interest of the Contractor not to drill and to give it back to the Government

No approval should be required for Budgets, Annual accounts, Appointing auditors,

Creating mortgage for loans, and Development plan

Development plan can be submitted to the Government for information to ensure that

no operator is sitting idle on the block

PEL should be signed at the time of signing the contract. Mining Lease should be

deemed approved as long as contractor has completed its Minimum Work Program

There is a general clause that Government will provide security for operations but this is

practically not implemented. A specific clause should be there so that CISF is provided

to the main establishments of CBM operator

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Regulatory Issues

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Environment Clearance should be in place at the time of signing the contract. EIA studies

can be conducted by the Government before that and expense for the study can be paid by

the winner. Standard conditions should be made by MOEF in consultation with the Industry

and should form part of the CBM Contract

Government should have no right for vesting of assets, data, etc. acquired or owned by the

Contractor, since there is no cost recovery

Instead of getting approval for each Essentiality Certificate (EC) for imports, it should be

done on self certification and monthly report of the same can be filed with the Government

Excise duty should be clearly exempt on local purchases as it is a deemed export

Overlapping issues in any block should be clearly written in the bidding document itself to

help bidders to decide whether to bid for a particular block or not. These should not come as

a surprise after the blocks are awarded

In many blocks contractors have not received full rights and unrestricted access to their

entire CBM Block (overlapping issues), however, DGH is demanding submission of Bank

Guarantee from the Company. How can the contractor submit a guarantee when it is not

allowed to work?

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Challenges in CBM

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Land Acquisition

Land is a sensitive subject all over the world for the Government

Best course is for private sector to directly negotiate with land owners

Technology

Scarcity of service providers in Asia

Infrastructure

Pipeline network should be in place before gas production starts

Limited City Gas Distribution network

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Way Ahead for CBM Industry

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Investor friendly regulatory environment

“Arms Length Free Market Pricing” as announced at time of bidding should

be strictly maintained

No reservation / allocation to any sectors / consumers as that is against the

basic principle of Free market

All clearances should be in place at the time of signing of the PSC / Contracts

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www.geecl.com