Great East Energy,
which acquired its wholly-owned local Ukrainian natural gas operating
subsidiaries, NPK-KONTAKT and LISPROMGAZ (processing gas since 2003 via two
owned facilities, with around 8.4 miles of pipelines to their clientele already
in place), reported today that they are now looking to obtain greenfield
licenses in the surrounding area, with plans to acquire enough territory to
expand their holdings by over 517%, to some 1k square miles.
Given the securing
last year of a five-year extension of its permit from the Ministry of
Environmental Protection to continue producing methane gas and for further
development of its properties (Lysychansko-Toshkovskaya area of southeastern
Ukraine), this announced evolution by GASE seems a natural one, as they move to
scoop up underperforming existing operators in the area. Clearly doubling down
on the premium Ukrainian natural gas market dynamics, where gas is three times
the price it is back here in the states and a natural drive is on domestically
to free Europe’s second largest country (by land mass) from dependence on
Russian gas, GASE is now hungrily eyeballing the abundant, underutilized
acreage in their surrounding area.
GASE has big plans
for developing gas in Ukraine and is eager to grow their whopping 47B cubic
feet of estimated gross total reserves under their current license area
(southeastern Dnieper-Donets Basin), which is flanked by rich, uniform drill
targets and assets severely neglected by former operators. Shell’s Yuzivska
field was actually the key asset in a $10B contract inked at the 2013 Davos in
early January by Ukraine, an asset with a preliminary resource estimate in the
neighborhood of an astounding 300 trillion cubic feet. With evaluation on the
GASE block reserves and resources from 2007 confirmed by Marathon Oil’s
analysis, as well as a subsequent NI 51-101 report, things are looking quite
good for the company’s now growing footprint of operating and distributing
unconventional gas companies in the southeastern Dnieper-Donets Basin.
Looking at the seven
major dome structures already identified on the existing property, in
conjunction with the reported 1B or so cubic feet of gas already produced from
the site (prior owner), as well as strong reads on the target via twelve core
wells and five vent wells, GASE is extremely confident of the production
profile. This is prime DD-Basin acreage and there is plenty of it, amid some
unprecedented underlying Ukrainian gas market dynamics, with the state-run oil
and gas company, Naftogaz, now slashing imports from Russia’s Gazprom by an
incredible 80% in February as part of a clear bid for independence (so bold it
has many analysts wondering if it will backfire and send prices through the
roof). Ukraine’s strategy to bolster production from their rich DD Basin and
the Carpathian Foldbelt in the west with the help of Shell is inescapably
apparent and the savvy investor will find some really good in-points here to
play the events as they progress.
CEO of GASE, Timur
Khromaev, recently told Stock Market Media Group in an interview that this
first stage of the company’s plan for expansion to 1k square miles of territory
would be focused on creating a solid base for more rapid expansion in later
stages, signaling to markets that the real game has yet to even kick off.
More info on Great
East Energy, Inc. at www.GreatEastEnergy.com
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