Written by ι Stock Market Media Group Staff — February 14, 2014
Great East Energy, Inc. (OTCQB: GASE) saw an opportunity to build an energy footprint in Europe’s second largest country with regard to land mass, and completed a deal late in 2013 that has it controlling more than 160 square miles of producing clean energy assets in Ukraine. With it, the company immediately controlled more than just a large piece of property – Great East Energy could now generate revenue in a lucrative energy market for its investors.
With natural gas prices hovering, on average, three times higher than prices here in the U.S., the acquisition makes a lot of sense especially given two independent reports that show the company is sitting on an estimated 47 billion cubic feet of natural gas and what amounts to years and years of supply.
The company’s CEO Timur Khromaev said, “In addition, the company will also be exploring new, promising deeper geological structures which are similar to those currently in production by our neighboring operator Cub Energy.” He added, “Recent production at two fields located next to Great East Energy exceeds 30 million cubic feet of natural gas per day.”
The benefit to investors is that wells in the company’s licensed area have been producing and selling natural gas since 2003 (1 billion cubic feet of gas for customers in the area according to prior owners), and with the infrastructure already in place including, two gas processing facilities, and over 8 miles of pipeline to its customers, Great East Energy can now implement North American capital, its industry knowledge, and technology to produce even more successfully in Ukraine. Khromaev said, “The company is currently planning on drilling two new wells and a service provider will be selected for that work in the near future.”
It certainly doesn’t hurt that Great East Energy’s 162-square mile property is surrounded by Royal Dutch Shell’s almost 3,000 square mile Yuzivske gas field. This field was the featured asset in a $10 billion contract signed by Ukraine at Davos, Switzerland, last year, and the preliminary resources estimate of that gas field is up to 300 trillion cubic feet of gas.
While Shell will spend about two years and $410 million to explore the Yuzivske shale gas area and assess its reserves, Great East Energy will be hard at work in its own licensed area where there are seven major dome structures on the property. The company’s assets are set up nicely for continued production and sales with low operating costs, and that combined with high European gas prices create a very compelling economic future for the company and its investors.