Great Eastern Energy Corp, a coal-bed methane explorer, plans to raise around Rs 400 crore (Rs 4 billion) through an initial public offer by December-end to fund expansion plans.
"We definitely plan to hit the market by the end of this calender year. We plan to raise around Rs 400 crore and will offer 5.9 million shares," GEECL chairman and managing director Y K Modi told PTI.
The London-listed company has filed a Draft Red Herring Prospectus with market regulator Securities and Exchange Board of India and is in the final stages of getting necessary approvals, he said.
GEECL plans to dilute 10 per cent equity through the public issue.
Enam Securities, ABN-Amro and SBI Capital Markets are the book-running lead managers for the IPO.
"We have a capex of Rs 200 crore (Rs 2 billion) each for the next two years. This involves drilling more wells," Modi said, adding the company has a license to operate in the block till 2036.
While it has completed drilling of 23 wells, GEECL currently has 13 wells under various stages of completion.
The company produces 3 million standard cubic metres of gas per day from its 210 sq km block at Raniganj in West Bengal.
The block has 1.92 trillion cubic feet of in-place gas reserves.
The development plan, includes drilling 100 wells, constructing up to five gas gathering stations and laying an underground pipeline connecting the wells to the gas gathering stations.
"After completing all 100 wells, we plan to drill the additional 200 wells to fully develop the block over the next 7-8 years subject to the approval of the directorate general of Hydrocarbons," Modi said.
GEECL is currently in the initial stages of marketing and selling a small amount of gas directly to end users through truck-mounted cascades.
"We have a tie-up with the Indian Oil Corporation for retailing our CNG through seven of their outlets. We sell the fuel under our brand g-CNG in the Raniganj, Asansol and Durgapur area," Modi said.
GEECL has signed a long-term gas supply agreement with Durgapur-based steel company Mackeil Ispat & Forging.
"We will tie up more consumers as production increases six months down the line," Modi said.
The company is also expected to commission a 35 km pipeline from the block to Durgapur soon, he added.
GEECL was listed on the London Stock Exchange's Alternative Investment Market in 2005 and raised Rs 203 crore (Rs 2.03 billion).
Subsequently, it raised another Rs 350 crore (Rs 3.5 billion) from the Indian market from a nine-bank consortium led by SBI, Modi said.
Illustration: Dominic Xavier
