NEW YORK, NY--(Marketwired - Mar 6, 2014) - In light of the current crisis unfolding in Ukraine, Great East Energy's (OTCQB: GASE) recent acquisition of 162-square miles of producing clean energy assets looks like perfect timing as the nation looks to make energy self-sufficiency from Russia a priority now more than ever. Great East Energy's plan in Ukraine has always been to implement North American capital, industry knowledge, and technology in order to produce even more natural gas from its assets. This week an article at forbes.com suggested Ukraine needed just that, an American-style shale gas revolution.
Interestingly, natural gas is the impetus behind this latest crisis. Russia has it, Ukraine wants it and at the same time, Ukraine owes Russian state-owned gas giant, Gazprom $1.5 billion for gas it has already supplied in 2013 and early 2014. Cash strapped Ukraine isn't likely in a position to pay however, so Gazprom, which controls nearly one-fifth of the world's gas reserves and supplies more than half of the gas Ukraine uses each year, stated that it intends to start charging Ukraine around $11.50 per 1,000 cubic feet for its gas, which is a dramatic rise from the discounted rate of around $7.70 the country has been paying.
As these events play themselves out, a $10 billion natural gas exploration deal Ukraine made last year with Royal Dutch Shell and Chevron, looks prophetic in retrospect and serves as a plea for outside companies to come into the country and help it explore and produce what is estimated to be more than 40 trillion cubic feet of recoverable shale gas. This represents enough gas to satisfy decades of demand in the country and leave behind the rising prices and continuous threats from Russia to turn off the taps delivering gas to Ukraine.
Great East Energy received a reserve report showing its assets hold 47 billion cubic feet of natural gas that is ready for drilling and production, and the company's recent receipt of $1.49 million in private financing will help the company get to work delivering upon that reserve. Great East Energy's assets are surrounded by a gas field that has been called the "featured asset" in Ukraine's landmark deal with Royal Dutch Shell and Chevron.
As they say in business, timing is everything, and one look at the headlines, and it appears that Great East Energy couldn't have timed its acquisition in Ukraine any better. But, they also say location, location, location, and the only thing better than the timing of the acquisition might be the location of the company's assets.
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