Half Yearly Report

8 December 2014

Great Eastern Energy Corporation Limited

("Great Eastern" or "the Company")

Half year results for the six months ended 30 September 2014

Great Eastern Energy Corporation Limited (LSE: GEEC), the fully integrated, leading Indian Coal Bed Methane (CBM) Company, is pleased to announce half year results for the six months ended 30 September 2014.

Financial Highlights:

· Total revenue increased by 21% to US$19.45m (as compared to the six month period ended 30 September 2013: US$16.03m)

· EBITDA increased by 14% to US$12.97m (as compared to the six month period ended 30 September 2013: US$11.39m)

· Profit after Tax pre MTM / DTE* increased by 24% to US$8.88m (as compared to the six month period ended 30 September 2013: US$7.14m)

· Cash generation increased by 23% to US$10.77m (as compared to the six month period ended 30 September 2013: US$8.77m)

· The Company has net debt of US$101.80m as at 30 September 2014. Debt:Equity ratio of 1.22 (as compared to the six month period ended 30 September 2013: 1.48)

*MTM (Mark to Market) is on account of the restatement of the foreign currency loans and derivatives

DTE (Deferred Tax Expense) is on account of difference in depreciation rates used for financial accounts and tax accounts and other expenses like exchange fluctuation / MTM

Operational and Corporate Highlights:

· Installation of new lower capacity pumps are delivering a positive impact on current production and setting the scene for higher volume future production targets

· 11% increase in gas flow to 4,718 mcfd as a result of pipeline simulation affecting 21 wells (out of a total of 67 wells). Further improvement in gas flow is anticipated with more simulation to be carried out in the pipelines affecting the remaining wells

· In July 2014, 5 deviated wells were producing gas out of the 39 deviated wells. After installation of 2 ESPCP* and 15 low capacity PCP*, 15 wells are producing gas. 25 more low capacity pumps are being installed

· A total of 156 wells have been drilled, which provides a substantial base for production growth, as they continue to dewater and are further optimised

· 150 wells fracced which are currently producing and / or dewatering

· Management decision taken to shelve the Indian IPO process

Outlook Highlights

· Decisive action taken to maximise production at Raniganj (South) block providing results and setting the scene for further upside

· 144 further wells planned to be drilled on the Raniganj (South) block

· Operational strategy in place is to continue to maximise production from existing wells and to continue to pursue sales opportunities in the highly industrialised region of Asansol-Raniganj-Durgapur through our own dedicated pipeline network

· Mannargudi block approvals being processed with minimum work programme of 30 pilot production wells and 50 core holes

· In relation to the Ranigani (North) block the Company continues to challenge the decision made in October 2014 by ONGC in relation to the 25% participating interest in the block

· Improved political and economic environment in India provides a positive demand outlook

Prashant Modi, President and COO of Great Eastern, said:

"The revenues, sales volume, and profitability continue to show good growth. We have a focused plan to maximise production with our current portfolio of acreage as well as pursuing new opportunities. The management has taken a decisive action to shelve the Indian IPO process. The growing positive operational results, coupled with favourable Indian political and economic conditions, means that we look forward to the future with confidence."

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Chairman's Statement

Financials

In the first six months of FY 2014-15 Great Eastern made material progress across the business, delivering significant growth in production, revenue, and profit.

Total revenue increased by 21% to US$19.45m, as compared to the six month period ended 30 September 2013, while EBITDA increased by 14%, to US$12.97m. The Company has net debt of US$101.80m as at 30 September 2014 with a Debt:Equity ratio of 1.22 against 1.48 as at 30 September 2013.

Sales increased by 28% to 1.90 Bcf as compared to 1.48 Bcf in the six month period ended 30 September 2013.

The supply and demand dynamic for Indian gas, and the pricing environment, remains extremely attractive and is likely to remain so for some years to come.

Operational update: Reserves, Drilling & Production

Management focus on improving production by the installation of new lower capacity pumps is now delivering a positive impact on current production and setting the scene for higher volume future production targets.

In addition, improved results have been achieved from implementing pipeline simulation affecting 21 wells (out of a total of 67 wells). These are encouraging and have resulted in an increase of 11% in gas flow from 4,234 mcfd to 4,718 mcfd. Further improvement in gas flow is anticipated with more simulation to be carried out in the pipelines affecting the remaining wells.

In March 2014 we announced an increase in our reserve numbers, as provided by independent reserve engineers Advance Resources International, Inc. (ARI). From February 2013 there has been an increase of 1.70% in Original-Gas-In-Place (OGIP) to 2.44 Tcf from 2.40 Tcf, an increase of 4.60% in gross Proven, Probable and Possible reserves (3P) to 289.6 Bcf from 276.8 Bcf and an increase of 34% in gross Proven and Probable (2P) reserves to 186.7 Bcf from 139.3 Bcf from February 2013.

In July 2014, 5 deviated wells were producing gas out of the 39 deviated wells. After the installation of low capacity pumps, 15 wells are producing gas. 25 more low capacity pumps are being installed.

* Pricing is based in Rs.

We continue to make progress in production and sales ramp-up. A total of 156 wells have now been drilled at our Raniganj (South) block, which provides a substantial base for production growth, as they continue to dewater and are further optimised.

Sales, Marketing, & Distribution

In total, the Company has 42.50 mmscfd of gas under contract / MOU, with additional contracts representing 1.91 mmscfd signed since November 2013, representing an increase of 4.7%.

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

Mannargudi Block

The Mannargudi block covers an effective area of 667 sq. km. and is located in the southern part of the country.

The Company has received the Environment Clearance and approval is awaited from the State Government of Tamil Nadu. Work will start after the receipt of the requisite approvals.

The current minimum work programme consists of 30 pilot production wells and 50 core holes.

CSR

Great Eastern has contributed towards improving the environment in this area through the substitution of polluting fuels with the use of clean energy. We also sponsor a number of medical camps, blood donation camps, sporting activities, and community health initiatives in the region.

Great Eastern views itself as an integral part of the community in which it works, with the business designed to not only create value for the company but also to make a positive contribution to the sustainable development of the local area.

I would like to thank our management team and all personnel for their on-going contribution to our continuing success in these areas.

Indian Economy

The growing Indian economy will provide continued strong gas demand:

· There is political stability in India giving a clear direction to the economy, which is showing signs of a "Turnaround", according to the OECD's latest survey

· GDP growth rate is expected to recover to 6.6% in 2015-16 and the new Government expects growth to reach 7% - 8% in two years

· The Government is driving large infrastructure projects, taking investor friendly measures, embarking on major disinvestment, and liberalising foreign indirect investments caps and rules

· The twin deficits are down with a fiscal deficit targeted at 4.1% and current account deficit at 2.1% of GDP in 2014

· Inflation is down to 1.8% (6.2% in May 2014) and the Government is taking proactive steps to contain food price rises through the creation of a stabilisation fund

· In addition the Budget has ruled out any fresh retrospective taxation. Outstanding issues are being resolved and there is emphasis on raising savings rates to push up investments

· The Indian market is now seeing global investors bringing in large funds. Both foreign indirect investments and foreign direct investments are rising, providing a confident financial backdrop

· The Indian stock markets are the best performing amongst emerging market economies (EMEs)

Outlook

We are well placed to build on the success of the first six months of FY 2014-15. We will endeavour to drive production and sales growth in the Raniganj (South) block through the optimisation process undertaken by the Company.

We look forward to commencing work at the Mannargudi block post the receipt of approvals.

During the period, the management took the decisive action to shelve the IPO.

With the new Government in place, we are confident that the general economic conditions will improve thereby giving a new impetus to growth.