Great East Energy Inc. Reports FY2013 Financial Results

Wednesday, April 16, 2014

Great East Energy Inc. Reports FY2013 Financial Results

7:39 AM No comments

Great East Energy, Inc. (OTCQB: GASE) (the "Company") which controls over 160 square miles of producing clean energy holdings through two local operating companies, today announced its full year 2013 financial results for the period ended December 31, 2013.

Full Year 2013 Financial Highlights

Increases in natural gas pricing lifted 2013 revenues by $21.6 thousand to $274.4 thousand for the year compared to revenues of $252.8 thousand for the year ended December 31, 2013. Pricing increases were a strong trend in 2013 though GASE's natural gas sales volumes decreased by 2.5 MMcf to 28.5 MMcf for the year. The average price the Company obtained on the sale of its natural gas was $9.63 per thousand cubic feet ("Mcf") in 2013 compared to $8.15 per Mcf in 2012. In 2013, GASE's natural gas sales averaged 79.17 Mcf per day. The volume decrease was due to the natural depletion of two of the Company's productive wells. GASE's 162-square mile property has seven major dome structures, which while under prior ownership has already produced nearly one billion cubic feet of gas. Twelve core wells and five vent-wells have been drilled on the producing domes. GASE's assets are surrounded by Royal Dutch Shell's Yuzivske gas field comprising over 3,000 square miles. The preliminary resources estimate of the Yuzivske gas field is up to 300 trillion cubic feet. GASE is actively drilling new wells identified on its property and researching additional "greenfield" drilling sites.

GASE's "other sales" mainly included revenues using the Company-owned transportable machinery and equipment, such as a cementing unit, compressor unit, and pump set to render services to third parties. Other revenues increased by $3.60 thousand to $53.7 thousand for the year ended December 31, 2013. Other income of $20.5 thousand in 2013 included interest income of approximately $ 19.8 thousand earned on bank deposits.

The Company's operating and maintenance expenses of $249.8 thousand is attributed to wages and salaries of the gas production personnel, cost of materials, taxes and duties. Operating and maintenance expenses increased by $34.3 thousand in 2013 compared to 2012 mainly due to increases in material expenses.

General and administrative ("G&A") expenses decreased by $22.28 thousand to $196.68 thousand for the year ended December 31, 2013, from $174.39 thousand for the year ended December 31, 2012. On a per unit basis, G&A expenses increased from $5.62 per Mcf sold in 2012 to $6.90 per Mcf sold in 2013.

Operating loss was approximately $3.96 million for the year ended December 31, 2013, as compared to the operating loss of approximately $153.95 thousand for the year ended December 31, 2012. The increase in operating loss is primarily attributed to professional fees expenses, and to a lesser extent, to increases in other operating expenses. Excluding the impacts of professional fees, operating result decreased $52.58 thousand to $206.53 thousand for the year ended December 31, 2013, from $153.95 thousand for the year ended December 31, 2012.

GASE's net loss was approximately $3.96 million for the year ended December 31, 2013, as compared to net income of $26.16 thousand for the year ended December 31, 2012. The decrease was primarily the result of an increase in operating expenses for the year ended December 31, 2013 as compared to 2012.

Business Outlook:

Great East Energy is working to further develop its estimated gross total reserves of 47 billion cubic feet (BCF) of natural gas in the GASE license area. GASE's wholly-owned subsidiary controls two companies which have been producing gas since 2003. GASE additionally owns two gas processing facilities, and over eight miles of gas pipelines to their customers.

In a press release on March 25, Timur Khromaev addressed the market and GASE shareholders with his Company's positive outlook in the market and the heightened focus on the Ukraine in the media. To view video interview of GASE CEO Khromaev visit:

http://ir.greateastenergy.com/

About GASE:

Great East Energy is a producing, development stage company targeting the growing independent natural gas production industry of Ukraine, as Europe's second-largest country by land mass makes energy self-sufficiency from Russia a priority. With Ukraine natural gas priced over three times U.S. levels, the energy industry holds compelling economics as well. Through its local operating subsidiaries NPK-KONTAKT and LISPROMGAZ, the completion of GASE's well development activities are planned to result in a multi-million dollar inward investment into Ukraine.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward looking statements are based upon the current plans, estimates and projections of the Company's management and are subject to risks and uncertainties, which could cause actual results to differ from the forward looking statements.

Such statements include, among others, those concerning market and industry segment growth and demand and acceptance of new and existing resources; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; uncertainties related to conducting business in Ukraine, as well as all assumptions, expectations, predictions, intentions or beliefs about future events.

Therefore, you should not place undue reliance on these forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: business conditions in Ukraine, general economic conditions; geopolitical events and regulatory changes, availability of capital, the Company's ability to maintain its competitive position and dependence on key management. This press release does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.