NEW YORK, NY and KIEV, UKRAINE--(Marketwired - May 12, 2014) - Great East Energy, Inc. (OTCQB: GASE) (the "Company"), which controls over 160 square miles of producing, clean energy, natural gas holdings through two local operating companies, today announced it has implemented a 28% pricing increase to its customer base.
The pricing increase is a direct result of a valuation of the Ukrainian Hryvnia, which has devalued more than 40% over the past four months. To maintain its targeted USD $11.00 MCF pricing levels, the management team of Great East Energy passed through the 28% price increase from 95.76 UAH to 121.78 UAH per MCF. Local UAH pricing corresponds to an increase from USD $8.40 to USD $10.68 per MCF at the official exchange rate of Ukrainian Hryvnia on May 1, 2014.
The pricing increase was in effect as of May 1 and will be reflected on the Company's second quarter, 2014 earnings report and 10-Q filed with the SEC. Great East Energy intends to implement additional price increases to its customers to reach its USD $11.00 MCF price target in the near term. By comparison, US prices per MCF averaged USD $2.65 in 2012 according to monthly pricing data reported to the U.S. Energy Information Administration.
"As expected, our customer base understood our needs to raise prices," began Great East Energy CEO, Timur Khromaev. "After seeing months of currency devaluation, we believe the devaluation has subsided which was the appropriate time to raise our local currency prices to reach our target of USD $11.00 MCF. We have built our financial models on these pricing levels and we are certain we will maintain our competitive position in the market at such prices. While the situation in the Ukraine remains tense, our operations have not been affected. The natural gas industry in the Ukraine remains a widely supported industry on a national level and also by the European Union and United States."
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.