SOURCE: Great East Energy, Inc.

April 16, 2014 10:55 ET

Great East Energy Inc. Reports FY2013 Financial Results

NEW YORK, NY and KIEV, UKRAINE--(Marketwired - Apr 16, 2014) -  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.

GREAT EAST ENERGY, INC.
BALANCE SHEET
For The Years Ended December 31, 2013 (Consolidated) and 2012 (Combined)
 
    (Consolidated)     (Combined)
ASSETS:   December 31, 2013     December 31, 2012
               
Cash   $ 99,650     $ 199,403
Accounts receivable, net     6,207       21,964
Investments     -       340,576
Inventories     41,749       57,038
Other current assets     7,281       4,940
Deferred income tax assets     2,945       3,519
Total current assets     157,832       627,440
               
Long-term assets:              
Property, plant and equipment, net     1,090,537       1,201,631
Deferred income tax assets     21,015       11,511
Total Long-term assets     1,111,552       1,213,142
               
Total assets   $ 1,269,384     $ 1,840,582
               
LIABILITIES AND STOCKHOLDERS' EQUITY              
Current liabilities:              
Notes payable to related parties   $ 4,453     $ 424,012
Bank overdraft     454       304
Accounts payable     87,585       36,917
Taxes payable     9,567       74,283
Related party payables     340,525       25
Total current liabilities     442,584       535,541
               
Long-term liabilities:              
Notes issued     -       25,890
Asset retirement obligations     56,917       53,591
Total current liabilities     56,917       79,481
               
Total liabilities     499,501       615,022
               
Stockholders' equity:              
Preferred stock - $.0001 par value; 10,000,000 shares authorized; 1 shares issued and outstanding     -       -
Common stock - $.0001 par value; 100,000,000 shares authorized; 51,177,896 and 188,160,000 shares outstanding at December 31 2013 and 2012, respectively     5,118       18,816
Additional paid-in capital     3,569,051       50,801
Accumulated deficit     (2,804,286 )     1,155,943
Total stockholders' equity     769,883       1,225,560
Total liabilities and stockholders' equity   $ 1,269,384     $ 1,840,582
               
               
               

 

GREAT EAST ENERGY, INC.  
STATEMENTS OF OPERATIONS  
For The Years Ended December 31, 2013 (Consolidated) and 2012 (Combined)  
   
REVENUES AND OTHER INCOME   (Consolidated)
2013
   
(Combined)
2012
 
             
Gas sales   $ 274,435     $ 252,817  
Other sales     53,669       50,067  
Other income     20,507       41,633  
Total Revenues and Other Income   348,611       344,517  
                 
OPERATING EXPENSES                
Organizational expenses     902       -  
Operating and maintenance expenses     249,748       215,436  
General and administrative expenses     196,675       174,393  
Depreciation, depletion and amortization     107,811       108,640  
Professional fees     3,749,830       -  
             
Total Operating Expenses     4,304,966       498,469  
             
Loss from operations     (3,956,355 )     (153,952 )
             
Other Income (Expense):                
Finance costs     (8,240 )     (3,449 )
Income from sale of emission reduction units     -       215,885  
Foreign currency translation adjustment     (501 )     (503 )
Other Income (Expense)   (8,741 )     211,933  
                 
INCOME (LOSS) BEFORE INCOME TAX     (3,965,096 )     57,981  
Income tax benefit/(provision)     4,867       (31,821 )
NET INCOME (LOSS) APPLICABLE TO COMMON SHARES  $ (3,960,229 )   $ 26,160  
               
NET INCOME (LOSS) PER BASIC AND DILUTED SHARES   $ (0.08 )   $ 0.00  
               
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING     46,678,979       178,245,256  
                 
                 
                 
GREAT EAST ENERGY, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the years ended December 31, 2013 (Consolidated) and 2012 (Combined)
 
  Preferred Stock Common Stock Additional
Paid-in
Capital
Advances
Stock Subscriptions
Subscriptions from Accumulated
Receivable Investors Deficit
Total
Stockholders' Equity
Shares Amount Shares Amount
             
Balances at December 31, 2011 - $ - 168,000,000 $ 16,800 $ 14,617 $ (9,000) $ - $ 1,129,783 $ 1,152,200
Stock subscription payment received - - - - - 9,000 - - 9,000
Common stock issued for cash - - 20,160,000 2,016 36,184 - - - 38,200
Net income - - - - - - - 26,160 26,160
Balances at December 31, 2012  - - 188,160,000 18,816 50,801 $ - - 1,155,943 1,225,560
Recapitaliztion adjustment - - - - (441,509) - - - (441,509)
Common shares issued for option agreement 1 - 25,964,951 2,597   - - - 2,597
Cancelation of shares shares per option agreement - - (168,000,000) (16,800) 16,800 - - - -
Common Stock Sold for Cash, net of offering costs of $89,593 - - 1,274,961 127 1,350,263 - (200,000) - 1,150,390
Common shares issued for services - - 3,777,984 378 3,777,606 - - - 3,777,984
Contribution of additional paid-in capital - - - - 67,687 - - - 67,687
Investment in subsidiary       (1,252,597)     (1,252,597)
Advance subscriptions from investors - - - - - - 200,000 - 200,000
Net loss - - - - - - - (3,960,229) (3,960,229)
Balances at December 31, 2013  1 $ - 51,177,896 $ 5,118 $ 3,569,051 $ - $ - $ (2,804,286) $ 769,883

 

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