UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DCD.C. 20549

~~Form~~FORM 10-Q

~~(Mark~~☒ QUARTERLY ~~One~~REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2013
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2014

~~For the transition period from __________ to ____________~~or

~~Commission~~☐ TRANSITION ~~file~~REPORT ~~number:~~PURSUANT ~~333-179321~~TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~GREAT~~For ~~EAST~~the ~~ENERGY,~~transition ~~INC.~~period from ___________ to ______________

~~(Exact~~Commission ~~name~~File ofNumber: ~~Registrant as specified in its charter)~~333-179321

Delaware		46-0525801
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

GASE ENERGY, INC.

(Exact name of registrant as specified in its charter)

Delaware		46-0525801
(State or other jurisdiction of incorporation)		(IRS Employer Identification Number)

173 Keith St., Suite 300

Warrenton, VA 20186

(Address of principal executive offices) ~~(zip code)~~

~~Telephone:~~ (540-) 347-2212

Facsimile: Fax: 540-347-2291

(Registrant’s telephone number, including area code)

Indicate by check mark whether the ~~Registrant~~registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for ~~such~~ shorter period that the ~~Registrant~~registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was ~~required~~Required to submit and post such files). ☒ Yes ☐ x No o

Indicate by check mark whether the ~~Registrant~~registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,”, “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

Large accelerated filer o☐ Accelerated filer o☐ Non-accelerated filer o☐ Smaller reporting company x☒ (Do not check if a smaller reporting company)

Indicate by check mark whether the ~~Registrant~~registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ o No x

~~State~~As of ~~the~~August ~~number~~14, of2014, ~~shares~~there were outstanding of51,287,896 shares ~~each~~ of the ~~issuer~~registrant’s ~~classes of~~ common stock, as$.0001 ofpar ~~the latest practicable date:~~value.

As of November 13, 2013 there were 50,827,896 shares of the Registrant's common stock issued and outstanding.

TABLE OF CONTENTS

		Page
PART I - Financial Information
PART I	Financial Information
Item 1.	Financial Statements.		3F-1
	Condensed Consolidated Balance Sheets as of September 30, 2013 (Unaudited) and June 30, 2013		3
	Condensed Consolidated Balance Sheet as of June 30, 2014 (Unaudited) and December 31, 2013		F-2
	Condensed Consolidated Statements of Operations for the three months ended September 30, 2013 (Unaudited) and for the period from April 5, 2013 (Inception) to September 30, 2013 (Unaudited)		4
	Condensed Consolidated Statements of Operations and Comprehensive Loss For the Three and Six Months Ended June 30, 2014 and June 30, 2014		F-3
	Condensed Statement of Changes in Stockholders’ Deficit for the period from April 5, 2013 (Inception) to September 30, 2013 (Unaudited)		5
	Condensed Consolidated Statement of Cash Flows For the Six Months Ended June 30, 2014 and June 30, 2013 (Unaudited)		F-4
	Consolidated Statements of Cash Flows for the three months ended September 30, 2013 (Unaudited) and for the period from April 5, 2013 (Inception) to September 30, 2013 (Unaudited)		6
	Notes to Financial Statements (Unaudited)		F-5
	Notes to Condensed Financial Statements (Unaudited)		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.		12
Item 4.	Controls and Procedures		5
Item 4.	Controls and Procedures		15
PART II	Other Information
PART II - Other Information
Item 6.	Exhibits.		5
Item 6.	Exhibits.		16
	Signatures		6
Signatures			17
	Exhibits/Certifications
Exhibits/Certifications

2PART I-FINANCIAL INFORMATION

PART 1 - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

~~GREAT EAST~~ GASE ENERGY, INC. (AIndex ~~DEVELOPMENT~~to ~~STAGE COMPANY) BALANCE SHEET~~ Condensed Consolidated ~~Balance Sheets~~Financial Statements (Unaudited)

		September 30,			June 30,
	Page
		2013			2013
Condensed Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013 (Audited)	F-2
		(Unaudited)
Condensed Consolidated Statements of Operations and Comprehensive Loss For the Three and Six Months Ended June 30, 2014 and June 30, 2013	F-3
ASSETS
Condensed Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2014 and June 30, 2013	F-4
Current asset:
Notes to the Condensed Consolidated Financial Statements	F-5
Cash		$	528,706		$	50,255
Total current asset			528,706			50,255
Long-term asset:
Deposits			-			40,000
Deposits for investment in subsidiary			1,252,596			-
Total long-term asset			1,252,596			40,000
Total assets		$	1,781,302		$	90,255
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable		$	32,704		$	130,369
Accrued liabilities			-			309,312
Accrued investment in subsidiary liability			837,500			-
Related party payables			25			13,504
Total current liabilities			870,229			453,185
Total liabilities			870,229			453,185
Stockholders’ equity (deficit):
Preferred stock - $.0001 par value; 10,000,000 shares
authorized; 50,827,896 shares outstanding			-			-
Common stock - $.001 par value; 1,000,000 shares
authorized; 50,827,896 shares outstanding			5,083			18,816
Additional paid-in capital			4,402,578			(392,126	)
Advance subscriptions from investors			200,000			90,000
Accumulated deficit			(3,696,588	)		(79,620	)
Total stockholders'equity (deficit)			911,073			(362,930	)
Total liabilities and stockholders' equity (deficit)		$	1,781,302		$	90,255

F-1

GASE ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEET

	June 30,			December 31,
	2014			2013
	(Unaudited)			Audited
ASSETS
Current assets:
Cash	$	48,878		$	99,650
Accounts receivable, net		5,255			6,207
Inventories		25,323			41,749
Other current assets		4,859			7,281
Deferred income tax assets		3,468			2,945
Total current assets		87,784			157,832

Long-term assets:
Property, plant and equipment, net		702,828			1,090,537
Deferred income tax assets		21,252			21,015
Total Long-term assets		724,080			1,111,552

Total assets	$	811,864		$	1,269,384

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable to related parties	$	6,062		$	4,453
Bank overdraft		851			454
Accounts payable		107,254			87,585
Taxes payable		7,444			9,567
BHL Note Payable		337,500			-
Related party payables		155,525			340,525
Total current liabilities		614,636			442,584

Long-term liabilities:
Asset retirement obligations		40,898			56,917
Total long-term liabilities		40,898			56,917

Total liabilities		655,534			499,501

Stockholders’ equity:
Series A preferred stock - $.0001 par value; 1 share authorized;
1 share outstanding as of June 30, 2014 and December 31, 2013		-			-
Undesignated preferred stock - $.0001 par value; 9,999,999 authorized; 0 shares outstanding as of June 30, 2014 and December 31, 2013		-			-
Common stock - $.0001 par value; 100,000,000 shares authorized,
with 51,287,896 and 51,177,896 shares outstanding as of June 30, 2014 and December 31, 2013, respectively		5,129			5,118
Additional paid-in capital		3,679,025			3,569,051
Accumulated deficit		(3,179,887	)		(2,804,286	)
Accumulated other comprehensive income		(347,937	)		-
Total stockholders' equity		156,330			769,883
Total liabilities and stockholders' equity	$	811,864		$	1,269,384

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3F-2

~~GREAT~~GASE ~~EAST~~ ENERGY, INC. (ACONDENSED ~~DEVELOPMENT~~STATEMENTS ~~STAGE COMPANY) STATEMENT~~ OF OPERATIONS ~~Condensed~~AND ~~Consolidated~~COMPREHENSIVE ~~Statement~~LOSS ~~of Operations~~ For ~~The~~the Consolidated Three and Six Months Ended ~~September~~June 30, ~~2013~~2014 ~~And~~and ~~For The Period From April 5,~~ 2013 ~~(Inception) To September 30, 2013 (UNAUDITED)~~

	Three Months Ended			From Inception to
	Consolidated Three months Ended June 30,			Consolidated Three months Ended June 30,			Consolidated Six months Ended June 30,			Consolidated Six months Ended June 30,
	September 30,			September 30,
	2014			2013			2014			2013
	2013			2013
REVENUES AND OTHER INCOME
INCOME	$	-		$	-
Gas sales	$	47,854		$	71,210		$	101,505		$	143,173
OPERATING EXPENSES
Other sales		2,932			8,019			15,095			9,420
Organizational expenses		-			902
Other income		896			8,055			2,110			16,287
General and administrative expenses		489			6,132
Total Revenues and Other Income		51,682			87,284			118,710			168,880
Professional fees		3,618,979			3,689,554
OPERATING EXPENSES
Total Operating Expenses		3,619,468			3,696,588
Operating and maintenance expenses		42,141			53,632			92,595			112,601
Other Income (Expense):
General and administrative expenses		26,266			63,746			70,636			95,072
Gain of forgiveness of debt		2,500			-
Depreciation, depletion and amortization		19,891			27,595			37,560			55,301
Net Other Expense		2,500			-
Professional fees		111,121			2,500			294,270			4,904
NET LOSS APPLICABLE TO COMMON SHARES	$	(3,616,968	)	$	3,696,588
Total Operating Expenses		199,419			147,473			495,061			267,878
NET LOSS PER BASIC AND DILUTED SHARES	$	(0.09	)
Loss from operations		(147,737	)		(60,189	)		(376,351	)		(98,998	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		42,202,888
Other Expense:
Finance costs		-			(54	)		-			(1,858	)
Other Expense		-			(54	)		-			(1,858	)
LOSS BEFORE INCOME TAX		(147,737	)		(60,243	)		(376,351	)		(100,856	)
Income tax benefit/(provision)		749			(2,631	)		750			6,901
NET LOSS APPLICABLE TO COMMON SHARES	$	(146,988	)	$	(62,874	)	$	(375,601	)	$	(93,955	)
Other Comprehensive Loss
Foreign currency translation adjustment		(50,539	)		-			(347,937	)		-
Total Other Comprehensive Loss		(50,539	)		-			(347,937	)		-
COMPREHENSIVE LOSS	$	(197,527	)	$	(62,874	)	$	(723,538	)	$	(93,955	)
NET LOSS PER BASIC AND DILUTED SHARES	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.00	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		51,240,423			188,160,000			51,223,697			188,160,000

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4F-3

~~GREAT~~GASE ~~EAST~~ ENERGY, INC. (ACONDENSED ~~DEVELOPMENT~~CONSOLIDATED ~~STAGE~~STATEMENTS ~~COMPANY)~~OF ~~CONDENSED~~CASH ~~STATEMENT~~FLOWS OFFOR ~~CHANGES~~THE INSIX ~~STOCKHOLDERS'~~MONTHS ~~DEFICIT~~ENDED JUNE 30, 2014 AND 2013

	Preferred Stock						Common Stock						Additional Paid-in			Advances subscriptions from		Accumulated			Total Stockholders'
	Six months ended			Six months ended
	Shares			Amount			Shares			Amount			Capital			Investors		Deficit			Deficit
	June 30,			June 30,
Balances at April 5, 2013 (Inception)		-		$	-			-		$	-		$	-		$	-	$	-			$	-
	2014			2013
Common shares issued for services		-			-			188,160,000			18,816			(392,126	)		-		-				(373,310	)
Operating activities:
Net loss for the period ended June 30, 2013		-			-			-			-			-			-		(79,620	)			(79,620	)
Net loss	(375,601)			(93,955)
Balances at June 30, 2013		-			-			188,160,000			18,816			(392,126	)		-		(79,620	)			(452,930	)
Adjustments to reconcile net loss to net cash used in operating activities:
Common shares issued for option agreement		-			-			25,799,984			2,580			-			-		-				2,580
Depreciation, depletion and amortization		37,560			55,301
Cancelation of shares shares per option agreement		-			-			(168,000,000	)		(16,800	)		16,800			-		-				-
Deferred income taxes		(759	)		(6,901	)
Common Stock Sold for Cash, net of offering costs of $89,593		-			-			1,089,928			109			1,000,298			-		-				1,000,407
Accretion expense		2,812			2,148
Common shares issued for services		-			-			3,777,984			378			3,777,606			-		-				3,777,984
Finance costs		-			1,861
Advance subscriptions from investors		-			-			-			-			-			200,000		-				200,000
Changes in assets and liabilities:
Net loss for the period ended September 30, 2013		-			-			-			-			-			-		(3,616,968	)			(3,616,968	)
Accounts receivable		(1,231	)		15,502
Balances at September 30, 2013		-		$	-			50,827,896		$	5,083		$	4,402,578		$	200,000	$	(3,696,588	)		$	911,073
Inventory		3,370			(609	)
Advances paid and deferred expenses		1,767			816
Accounts payable and accrued liabilities		28,120			1,453
Prepaid taxes and taxes payable		1,121			(22,467	)
Related party payable		152,500			-
Net cash used in operating activities		(150,341	)		(46,851	)
Investing activities:
Purchase of property, plant and equipment		(714	)		(1,055	)
Change in deposits		-			(7,256	)
Repayment of notes		-			320,433
Net cash provided by (used in) investing activities		(714	)		312,122
Financing activities:
Proceeds from loans received		2,005			65
Repayments of loans received		-			(312,119	)
Proceeds from common stock issued for cash		109,985			-
Net cash provided by (used in) financing activities		111,990			(312,054	)
Effect of translation to presentation currency		(11,707	)		(501	)
Net decrease in cash		(50,772	)		(47,284	)
Cash, beginning of year		99,650			199,403
Cash, end of year		48,879			152,119
Supplemental disclosures of cash flow information:
Cash paid for interest		-			-
Cash paid for taxes		-			-
Non cash financing activities
Common shares issued for services		-			39,915

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5F-4

~~GREAT EAST~~ GASE ENERGY, INC. NOTES (ATO ~~DEVELOPMENT~~CONDENSED ~~STAGE~~CONSOLIDATED ~~COMPANY)~~FINANCIAL ~~STATEMENT~~STATEMENTS ~~OF CASH FLOWS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013 FROM APRIL 5, 2013~~ (~~INCEPTION~~UNAUDITED) June ~~TO SEPTEMBER~~ 30, ~~2013~~2014

	Three Months Ended			From Inception to
	September 30,			September 30,
Operating Activities:	2013			2013
Net loss	$	(3,616,968	)	$	(3,696,588	)
Adjustments to reconcile net loss to net cash used in operating activities:
Common shares issued for services		3,777,984			3,404,674
Gain on forgiveness of debt		(2,500	)		(2,500	)
Changes in assets and liabilities:
Accounts payable and accrued liabilities		(404,477	)		35,204
Related party payable		(13,479	)		25
Net Cash Used in Operating Activities		(259,440	)		(259,185	)
Investing Activities:
Deposits for investments		(375,000	)		(415,000	)
Net Cash Used in Investing Activities		(375,000	)		(415,000	)
Financing Activities:
Proceeds from advance subscription from investors		200,000			290,000
Proceeds from common stock issued for cash		912,891			912,891
Net Cash Provided by Financing Activities		1,112,891			1,202,891
Net Increase in Cash		478,451			528,706
Cash, Beginning of Year		50,255			-
Cash, End of Year	$	528,706		$	528,706
Supplemental Disclosures of Cash flow information:
Cash paid for interest	$	-		$	-
Cash paid for taxes	$	-		$	-
Non Cash Financing Activities
Common shares issued for investment with subsidiary	$	2,580		$	25,799,984

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

The unaudited ~~accompanying~~condensed consolidated interim financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed consolidated financial statements and notes are anpresented as ~~integral~~permitted ~~part~~on Form 10-Q and do not contain information included in the Company’s annual statements and notes. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the December 31, 2013 audited financial statements and the accompanying notes thereto. Operating results for the interim periods are not necessarily indicative of financial results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. In preparing these financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

GREAT EAST ENERGY, INC.

(A DEVELOPMENTAL STAGE COMPANY)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

SEPTEMBER 30, 2013

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

The condensed unaudited interim financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed consolidated financial statements and notes are presented as permitted on Form 10-Q and do not contain information included in the Company’s annual statements and notes. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the June 30, 2013 audited financial statements and the accompanying notes thereto. While management believes the procedures followed in preparing these condensed financial statements are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the Company later in the year.

These condensed consolidated unaudited financial statements reflect all adjustments, including normal recurring adjustments which, in the opinion of management, are necessary to present fairly the operations and cash flows for the periods presented.

~~Great~~GASE ~~East~~ Energy, Inc. (the “Company”) was incorporated inunder ~~Nevada~~the onname ~~April~~Epsilon 5,Corp. ~~2013~~in ~~and~~Delaware ison aOctober ~~development-stage~~17, ~~entity~~2011. The Company's ~~current~~changed ~~business~~its ~~plan~~name is to ~~complete~~Great ~~the~~East ~~acquisition~~Energy, Inc. ~~transaction~~on ~~contemplated~~September by10, ~~the~~2013, ~~Option~~and ~~Agreement~~to ~~and~~GASE asEnergy, aInc. ~~result~~on toJune ~~engage~~13, in2014. ~~the~~The Company's current business ofplan ~~developing~~is acquisition and development of natural gas properties located in Ukraine (See Note 12).

~~NOTE~~On July 225, –2013, ~~SUMMARY~~the OFCompany ~~SIGNIFICANT~~consummated ~~ACCOUNTING~~transactions ~~POLICIES~~pursuant to a Share Exchange Agreement (the “Share Exchange Agreement”) dated July 25, 2013 by and among the Company and the stockholders of Great East Energy, Inc., a Nevada corporation (“GEEI”), (the “GEEI Stockholders”) whereby GEEI Stockholders transferred 100% of the outstanding shares of common stock of GEEI held by them, in exchange for an aggregate of 330,008 newly issued shares of the Company’s common stock, par value $.001 per share (“Common Stock”). As a result, GEEI became a wholly-owned subsidiary of the Company.

~~Development~~On July ~~Stage~~25, 2013, GEEI entered into a Stock Purchase Option Agreement (the “Option Agreement”) with Bezerius Holdings Limited, a corporation organized under the laws of the Republic of Cyprus (“BHL”), whereby BHL granted to GEEI an option to purchase 1,000 shares of equity capital of Synderal Services LTD, a corporation organized under the laws of the Republic of Cyprus ("SSL"), representing all issued and outstanding shares of SSL, for $1,250,000. SSL is engaged in the gas exploration and production business in Ukraine through its two wholly-owned subsidiaries, Limited Liability Company NPK-KONTAKT and Limited Liability Company LISPROMGAZ, each a legal entity formed under the laws of Ukraine.

~~The Company is considered to be in the development stage as defined in ASC 915~~F-~~10-05, “Development Stage Entity.” The Company is devoting substantially all of its efforts to the execution of its business plan.~~5

Under the Option Agreement, GEEI was required to pay to BHL $412,500 as an advance payment to be credited towards the purchase price of the SSL shares. The Company made the advance payment on July 25, 2013. The balance of the purchase price in the amount of $837,500 was paid by GEEI upon exercise of the option that was completed on November 25, 2013 by paying to BHL $500,000 in cash and issuing a promissory note in the principal amount of $337,500 for the balance of the option exercise price. The note bears no interest and has a maturity date of December 31, 2013, which was extended to September 30, 2014. The obligations of GEEI under the note are secured by 1,000 shares of SSL purchased by GEEI under the Option Agreement in accordance with the Pledge and Security Agreement dated November 25, 2013 made by GEEI in favor of the collateral agent acting on behalf of BHL. As a result, SSL, Limited Liability Company NPK-KONTAKT and Limited Liability Company LISPROMGAZ became indirect wholly-owned subsidiaries of the Company.

NOTE 2 – BASIS OF CONSOLIDATION

The Group’s entities maintain accounting books and records in local currencies of their domicile in accordance with the requirements of respective accounting and tax legislations. The accompanying condensed consolidated financial statements have been prepared in order to present the Company’s financial position and its results of operations and cash flows in accordance with US GAAP and are expressed in terms of US Dollars ($), unless otherwise stated.

The condensed consolidated financial statements are based upon the historical financial statements of the Company, Synderal Services LTD, NPK-Kontakt LLC and Lispromgas LLC and certain adjustments that rely on preliminary estimates and certain assumptions which the Company believes are reasonable under the circumstances.

The adjustments made in preparing the condensed consolidated interim financial statements are as follows:

- elimination of intra-entity transactions between GASE Energy, Inc. and Synderal Services LTD;
- elimination of intra-entity transactions between NPK-Kontakt LLC and Lispromgaz LLC;

- elimination of intra-entity balances between NPK-Kontakt LLC and Lispromgaz LLC;

- elimination of share capital of NPK-Kontakt LLC and Lispromgaz LLC and representation of payables for acquisition of subsidiaries incurred in connection with acquisition of NPK-Kontakt LLC and Lispromgaz LLC in March 2013.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The preparation of financial statements in conformity with US GAAP requires management to make estimates that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Although the Company uses its best estimates and judgments, actual results could differ from these estimates as future confirming events occur.

Reporting and functional currency

The Company’s functional and reporting currency is the US dollar ("USD").

The national currency of Ukraine, Ukrainian Hryvnia (“UAH”) is the functional currency for the Company’s entities that operate in Ukraine. Monetary assets and liabilities denominated in currencies other than the US dollar have been translated into the US dollar at the rate prevailing at each balance sheet date. Non-monetary assets and liabilities in currencies other than the US dollar have been translated into US dollars at historical rates. Non US dollar revenues, expenses and cash flows have been translated into US dollars at rates which approximate actual rates at the date of the transaction. Translation differences resulting from the use of these rates are included in the statement of operations and comprehensive loss.

The cumulative translation effects for those entities using functional currencies other than the US dollar are included in “Foreign currency translation adjustment” on the statement of operations and comprehensive loss.

F-6

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

7Revenue recognition

~~GREAT~~Revenues from ~~EAST~~the ~~ENERGY~~sale of natural gas are recognized when title passes to customers, ~~INC~~collection of the relevant receivable is probable, persuasive evidence of an arrangement exists and the sale price is fixed or determinable.

~~(A DEVELOPMENTAL STAGE COMPANY)~~Cash

~~NOTES~~Cash consists TOprincipally ~~CONDENSED~~of ~~CONSOLIDATED~~currency ~~FINANCIAL~~on ~~STATEMENTS~~hand, demand deposits at commercial banks, and liquid investment funds having an original maturity of three months or less at the time of purchase.

~~(UNAUDITED)~~Inventories

~~SEPTEMBER~~Inventories are ~~30,~~stated ~~2013~~at the lower of current market value or cost. The cost of inventories is based on the FIFO (first in first out) method and includes expenditures and other charges directly and indirectly incurred in bringing the inventory to its existing condition and location. Inventories are comprised of pipe and other material used to extract gas.

~~Cash and Cash Equivalents~~Accounts receivable

~~Cash~~Accounts receivable ~~and~~are ~~cash~~recorded ~~equivalents~~at ~~consists~~their ~~principally~~transaction ofamounts ~~currency~~less onallowance ~~hand,~~for ~~demand~~doubtful ~~deposits~~accounts. atAllowance ~~commercial~~for ~~banks,~~doubtful ~~and~~accounts ~~liquid~~is recorded ~~investment~~to ~~funds~~the ~~having~~extent athat ~~maturity~~there ofis ~~three~~a ~~months~~likelihood orthat ~~less~~any atof the ~~time~~amounts ofdue ~~purchase~~will not be obtained. The ~~Company~~allowance ~~had~~is ~~$528,706~~based ~~and~~on historical ~~$50~~experience,~~225~~ current and inexpected ~~cash~~economic trends and ~~cash~~specific ~~equivalents~~information asabout ofcustomer ~~September~~accounts. 30Accordingly, ~~2013~~actual results may differ from these estimates under different assumptions or conditions at the date of the financial statements and the ~~June~~reported ~~30,~~amount ~~2013~~of revenues and expenses during those reporting periods.

Property, plant and equipment

Depreciation, depletion and amortization, based on cost less estimated salvage value of the asset, are primarily determined under either the unit-of-production method or the straight-line method, which is based on estimated asset service life taking obsolescence into consideration. Maintenance and repairs, including planned major maintenance, are expensed as incurred. Major renewals and improvements are capitalized and the assets replaced are retired.

Production costs are expensed as incurred. Production involves lifting the gas to the surface and gathering, treating, field processing and field storage of the gas. Production costs are those incurred to operate and maintain wells and related equipment and facilities. These costs become part of the cost of gas produced.

Interest costs incurred to finance expenditures during the construction phase of multiyear projects are capitalized as part of the historical cost of acquiring the constructed assets. The project construction phase commences with the development of the detailed engineering design and ends when the constructed assets are ready for their intended use.

F-7

Gas properties (wells) are accounted for using the successful efforts method of accounting whereby property acquisitions, successful exploratory wells, development costs, and support equipment and facilities are capitalized and depleted using the unit-of-production method. Unsuccessful exploratory wells are expensed when a well is determined to be non-productive. Other exploratory expenditures, including geological and geophysical cost are expensed as incurred.

The Company capitalizes costs related to exploratory wells and exploratory-type stratigraphic wells for more than one year if the well has found a sufficient quantity of reserves to justify its completion as a producing well and the company is making sufficient progress assessing the reserves and the economic and operating viability of the project. If these conditions are not met or if information that raises substantial doubt about the economic or operational viability of the project is obtained, the well would be assumed impaired, and its cost, net of any salvage value, would be charged to operating expenses.

The capitalized costs of all other plant and equipment are depreciated or amortized over their estimated useful lives on a straight-line basis.

Long-lived assets, including gas properties, are assessed for possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Such events include write-downs of proved reserves based on field performance, significant decreases in the market value of an asset, significant change in the extent or manner of use of or a physical change in an asset, and a more-likely-than-not expectation that a long-lived asset or asset group will be sold or otherwise disposed of significantly sooner than the end of its previously estimated useful life. Recoverability of assets to be held and used is measured by a comparison of their carrying amount with their estimated undiscounted future cash flows expected to be generated by such assets. Impaired assets are written down to their estimated fair values, generally their discounted, future net before-tax cash flows.

Asset retirement obligation and environmental liabilities

The Company incurs asset retirement obligations for certain assets. These obligations may include the costs of asset disposal and additional soil remediation. The fair value of a liability for an asset retirement obligation is recorded as a liability when there is a legal obligation associated with the retirement of a long-lived asset and the amount can be reasonably estimated. In the estimation of fair value, the Company uses assumptions and judgments regarding such factors as the existence of a legal obligation for an asset retirement obligation; technical assessments of the assets; estimated amounts and timing of settlements; discount rates; and inflation rates. The costs associated with these liabilities are capitalized as part of the related assets and depreciated. Over time, the liabilities are accreted for the change in their present value.

Liabilities for environmental costs are recorded when it is probable that obligations have been incurred and the amounts can be reasonably estimated. Environmental expenditures that relate to ongoing operations or to conditions caused by past operations are expensed. Expenditures that create future benefits or contribute to future revenue generation are capitalized.

The gross amount of environmental liabilities is based on the Company’s best estimate of future costs using currently available technology. Future amounts are not discounted.

F-8

Start-up Costs

In accordance with ASC 720~~-15-20~~, “Start-up Activities,” the Company expenses all costs incurred in connection with the start-up and organization of the Company.

Common Stock Issued For Other Than Cash Proceeds

Services purchased and other transactions settled in the Company's common stock are recorded at the estimated fair value of the common stock issued if that value is more readily determinable than the fair value of the consideration received.

Income taxes

Income taxes represent amounts paid or estimated to be payable, net of amounts refunded or estimated to be refunded, for the current year and the change in deferred taxes, exclusive of amounts recorded in other comprehensive income.

Deferred income tax assets and liabilities are determined based on temporary differences between the financial reporting and tax bases of assets and liabilities and are recognized using enacted tax rates for the effect of such temporary differences. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized.

In accounting for uncertainty in income taxes of a tax position taken or expected to be taken in a tax return, the Company utilizes a recognition threshold and measurement attribute for the financial statement recognition and measurement. The recognition threshold requires the Company to determine whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position in order to record any financial statement benefit. If it is more likely than not that a tax position will be sustained, then the Company must measure the tax position to determine the amount of benefit to recognize in financial statements. The tax position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense.

Net Income or (Loss) Per Share of Common Stock

The following table sets forth the computation of basic and diluted earnings per share:

	For the six months ended June 30
	2014			2013
Net loss	$	(723,537	)	$	(93,955	)
Weighted average common		51,223,697			188,160,000
Options		-			-
Warrants		155,000			-
Weighted average common shares outstanding (Diluted)		51,223,697			188,160,000
Net loss per share
(Basic and diluted)	$	(0.01	)	$	(0.00	)

F-9

As of June 30, 2014 and December 31, 2013, the Company had 51,287,896 and 51,177,896 shares issued and outstanding, respectively. The Company had 155,000 potentially dilutive securities, related to warrants in 2014, currently issued and outstanding.

Significant Concentrations

There is currently one customer that makes up 100% of total gas revenue as of June 30, 2014, and June 30, 2013, respectively. The loss of this customer would have a material adverse effect on the Company’s financial condition and results of operations.

Recently Enacted Accounting Standards

WeBased on doour ~~not~~review ~~expect~~of recently enacted accounting standards, the ~~adoption~~Company ofbelieves ~~recently~~that ~~issued~~none ~~accounting~~of ~~pronouncement~~them are expected to a have a ~~significant~~ material impact on ~~our~~the ~~results~~Company's offinancial ~~operations~~position, ~~financial~~results ~~position~~of operations or cash ~~flow~~flows.

NOTE 4 3 – ~~STOCKHOLDERS’~~PROPERTY, ~~EQUITY~~PLANT, AND EQUIPMENT

As of September 30, 2013 the Company has authorized 110,000,000 shares consisting of 100,000,000 shares of common stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share. Effective on September 10, 2013, the Company effected a 56-for-1 forward stock split of its issued and outstanding shares of common stock, which became effective on September 10, 2013. As of September 30, 2013, the Company has issued 50,827,896 of the authorized shares of common stock and -0- shares of preferred stock.

		June 30, 2014			December 31, 2013
Wells and related equipment and facilities	$	811,186		$	1,199,912
Buildings, equipment, vehicles, and other PPE		444,687			657,960
		1,255,873			1,857,872
Less: Accumulated depreciation		(553,045	)		(767,335	)
	$	702,828		$	1,090,537

OnThe Company’s ~~July 25~~property, ~~2013,~~plant ~~the~~and ~~Company~~equipment ~~issued~~listed ~~25,799,984~~above ~~shares~~include ofasset ~~Common~~retirement ~~Stock~~costs toassociated ~~BHL in connection~~ with ~~the~~its ~~option~~asset ~~grant~~retirement obligations ~~closing~~(Note ~~under the Option Agreement~~6). ~~The stock compensation for the period was calculated at par prior to the stock split for a value of $56 or $1 post stock split.~~

During the three months ended September 30, 2013, the Company entered into and consummated transactions pursuant to the Subscription Agreement (the “Subscription Agreement”) with certain accredited investors whereby the Company issued and sold to the investors for $1.00 per share an aggregate of 1,089,928 shares of the Company’s Common Stock for an aggregate purchase price of $1,090,000 (the “Private Placement”). The Company paid $89,593 in offering cost related to the private placement.Exploratory wells

~~During~~The following ~~the~~two ~~three~~tables ~~months~~provide ~~ended~~details ~~September~~of ~~30,~~the ~~2013,~~changes in the ~~Company~~balance ~~cancelled~~of ~~168,000,000~~suspended ~~shares~~exploratory ofwell ~~common~~costs ~~stock~~as ~~per~~well ~~the~~as ~~terms~~an aging summary of ~~the~~those ~~merger agreement~~costs.

8Change in capitalized suspended exploratory well costs:

GREAT EAST ENERGY, INC.

		June 30, 2014			December 31, 2013
Beginning balance	$	412,028		$	412,028
Effect of translation to financial reporting currency		(137,085	)		-
Ending balance	$	274,943		$	412,028

(AAging of ~~DEVELOPMENTAL~~capitalized ~~STAGE~~suspended ~~COMPANY)~~exploratory well costs:

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	June 30, 2014			December 31, 2013
Capitalized for a period of between one and five years	$	33,283		$	33,283
Capitalized for a period of between five and ten years		378,745			378,745
Effect of translation to financial reporting currency		(137,085	)		-
Effect of translation to financial reporting currency	$	274,943		$	412,028

~~(UNAUDITED)~~Capitalized exploratory well costs are related to one project, represented by two wells drilled in 2003: $179,847 and $232,181 as of June 30, 2014. The wells were suspended pending final assessment of the operational and economic viability of the project. A decision is expected at the end of 2014.

~~SEPTEMBER 30, 2013~~F-10

~~During~~NOTE 5 ~~the~~– ~~three~~NOTES ~~months~~PAYABLE ~~ended~~TO ~~September~~RELATED ~~30,~~PARTIES ~~2013, the Company issued 3,777,984 shares of common stock to officers, directors, and consultants in exchange for services provided at a value of $3,777,984~~

AsLoans received ofare ~~June~~non-interest ~~30,~~unsecured ~~2013~~loans, ~~the~~received ~~Company~~from ~~has~~related ~~issued~~parties. ~~188,160,000~~Loans ~~post~~received ~~stock~~are ~~split authorized shares of common stock and~~ short-0-term ~~shares~~loans of(less ~~preferred~~than ~~stock. On April 15~~year), which ~~2013,~~were ~~the~~prolonged ~~company~~more ~~issued~~than ~~330,008 shares of common stock to the President and director as part of their consulting agreements, further discussed in note 6~~once. The ~~shares~~final ~~were~~maturity ~~valued~~date ~~based on an hourly rate of $150 that~~ is ~~compatible~~September ~~to the market rate for the similar positions and applied to their average of a combined~~ 30 ~~hours per week. The Company valued their services excluding the cash payments at $39~~,~~915.~~ ~~The Company also recorded the closing of Epsilon Corp~~2014.~~’s accumulated deficit to additional paid in capital as part of the share exchange agreement.~~

NOTE 6 4 – ~~ACCOUNTS~~ASSET ~~PAYABLE~~RETIREMENT OBLIGATIONS

AsChange in ofasset ~~September~~retirement ~~30, 2013, the Company’s accounts payable totaled $32,704. The following table shows the content of the account as of September 30, 2013~~obligations:

Professional Fees	$	32,704
	June 30, 2014			December 31, 2013
Total Accounts Payable	$	32,704
Beginning balance		56,917			53,591
Accretion expense		2,812			3,326
Effect of translation to financial reporting currency		(18,831	)		-
Ending balance		40,898			56,917

AsAsset retirement ofobligations ~~June~~are ~~30,~~Level ~~2013,~~3 ~~the~~(unobservable ~~Company’s~~inputs) ~~accounts~~fair ~~payable~~value ~~totaled $118,719 prior to the merger~~measurements. ~~The following table shows the content of the account as of June 30, 2013:~~

Professional Fees	$	117,817
Incorporation Fees		902
Total Accounts Payable	$	118,719

NOTE 7 – STOCKHOLDERS’ EQUITY

~~NOTE~~As of 5December –31, ~~ACCRUED~~2013, ~~LIABILITIES~~the Company has authorized 110,000,000 shares consisting of 100,000,000 shares of common stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share.

AsOn of September 3016, 2013, ~~and~~the ~~June~~Company effected ~~30,~~a ~~2013,~~56-for-1 ~~the~~forward ~~Company’s~~stock ~~accrued~~split ~~liabilities~~of ~~totaled~~its ~~$-0-~~issued and ~~$309,312~~outstanding shares of common stock. ~~The~~All ~~balance~~common ofshare ~~accrued~~and ~~liabilities~~per asshare ofamounts have ~~June~~been ~~30,~~restated ~~2013~~for ~~consisted~~all ofperiods ~~accrued~~presented for this stock ~~payable~~split. ~~and~~As ~~accrued~~of ~~professional~~June ~~fees~~30, ~~related~~2014 toand December 31, 2013, the ~~stock~~Company ~~option~~has issued ~~agreement~~51,287,896 and ~~consulting~~51,177,896 ~~agreements~~of ~~which~~the ~~were~~authorized ~~paid~~shares inof ~~full~~common asstock respectively; and 1 share of ~~September~~Series ~~30,~~A ~~2013~~preferred stock.

~~NOTE~~On April 615, –2013, ~~RELATED~~the ~~PARTY~~Company ~~PAYABLES~~issued 330,008 shares of common stock to the President and director as part of their consulting agreements. The shares were valued based on an hourly rate of $150 that is compatible with the market rate for the similar positions and applied to their average of a combined 30 hours per week. The Company valued their services excluding the cash payments at $39,915. The Company also recorded the closing of Great East Energy (NV)’s accumulated deficit to additional paid in capital as part of the share exchange agreement. The shares related to this issuance were cancelled as part of the recapitalization on July 15, 2013.

~~The~~On July ~~related~~25, ~~party~~2013, ~~payables consist of reimbursement of expenses and compensations to~~ the Company’s ~~Chairman~~issued ~~and~~25,964,960 ~~CEO~~shares ~~for their services at fair value. Each~~ of ~~them~~Common isStock to ~~receive~~BHL ~~monthly cash payment~~ in ~~addition~~connection towith the ~~Company’s~~option ~~common~~grant ~~shares~~closing ~~for~~under the Option ~~period of April 15 through September 30, 2013~~Agreement. The ~~fair~~stock ~~value~~ compensation ~~was~~for ~~calculated based on their average hours worked per week applied to an hourly rate that is compatible to~~ the ~~average~~period ~~market~~was ~~hourly~~calculated ~~compensation~~at ~~rate~~par of ~~similar positions~~$0.0001 ~~The~~per ~~total~~common ~~compensation~~share ~~and~~or ~~payables to these related parties for the period ended September 30, 2013 and June 30, 2013 was~~ $~~25 and $13~~2,~~504, respectively~~597.

9From July 25, 2013 to December 31, 2013, the Company entered into and consummated transactions pursuant to a series of the Subscription Agreements (the “Subscription Agreements”) with certain accredited investors whereby the Company issued and sold to the investors for $1.00 per share an aggregate of 1,439,928 shares of the Company’s Common Stock for an aggregate purchase price of $1,440,000 (the “Private Placement”). The Company paid $89,593 in offering cost related to the private placement.

~~GREAT EAST ENERGY, INC.~~F-11

(AOn July ~~DEVELOPMENTAL~~25, ~~STAGE~~2013, ~~COMPANY)~~the Company cancelled 168,000,000 shares of common stock per the terms of the Share Exchange Agreement.

~~NOTES~~During the TOmonth ~~CONDENSED~~of ~~CONSOLIDATED~~August ~~FINANCIAL~~2013, ~~STATEMENTS~~the Company issued 3,777,984 shares of common stock to officers, directors, and consultants in exchange for services provided at a value of $1.00 per common share or $3,777,984.

On November 26, 2013, the Company issued one share of Series A Preferred Stock to BHL. The holder of the Series A Preferred Stock is entitled to vote together with the holders of the Company’s common stock, with such holder entitled to 30% of the total votes on all such matters, and the holders of Common Stock and any other shares entitled to vote are entitled to their proportional share of the remaining 70% of the total votes based on their respective voting power. Each share of Series A Preferred Stock is convertible into one share of the Company’s common stock upon the earlier to occur of (~~UNAUDITED~~i) Twelve (12) months from July 25, 2013 or (ii) the Company closing financings with gross proceeds of at least $4,000,000 on a cumulative basis from July 25, 2013. Shares of Series A Preferred Stock are not redeemable and have no liquidation preference.

~~SEPTEMBER~~On January 3016, ~~2013~~2014, the Company issued 50,000 shares of Common Stock to an investor for $50,000.

~~NOTE~~On February 724, –2014 ~~ADVANCE~~Mr. ~~SUBSCRIPTION~~Herve ~~FROM~~Collet ~~INVESTORS~~was appointed Chief Operating Office. Mr. Collet was granted 300,000 shares of stock of which 150,000 shares vest as of the date of the agreement and 150,000 shares vesting and issued 181 days after the date of the agreement. As of March 31, 2014 the first 150,000 shares had not been issued. On February 24, 2014 the stock was trading at $0.64 whereby the shares were valued at $96,000 and was recorded as a payable to related parties.

InOn June ~~connection~~11, ~~with the Private Placement Financing discussed in note 4~~2014, the Company ~~has~~issued ~~received $200~~60,000 ~~and~~shares ~~$90,000~~of inCommon ~~advances~~Stock ~~for subscriptions prior~~ to ~~September~~an ~~30,~~investor ~~2013~~for ~~and June 30~~$60, ~~2013~~000.

NOTE 8 – ~~DEPOSITS~~STOCK ~~FOR~~PURCHASE ~~INVESTMENT IN SUBSIDIARY~~WARRANTS

OnDuring ~~July~~the 25six month period ended June 30, ~~2013~~2014, the Company ~~entered~~issued ~~into~~warrants to purchase a ~~Stock~~total ~~Purchase~~of ~~Option~~11,000 ~~Agreement~~shares (of the ~~“Option~~Company’s ~~Agreement”)~~Common ~~with~~Stock. ~~Bezerius~~The ~~Holdings~~Company ~~Limited,~~issued the awarrants ~~corporation~~as ~~organized~~stock ~~under~~offering ~~the~~costs ~~laws~~ of ~~the~~10% ~~Republic~~ of ~~Cyprus~~the ~~(“BHL”),~~total ~~whereby~~dollar ~~BHL~~value ~~granted~~of tosubscriptions ~~the~~at ~~Company~~$1.00 anper ~~option~~share tounder ~~purchase~~the ~~1,000~~agreement with ~~shares~~the ofplacement ~~equity~~agent. ~~capital~~The ofwarrants ~~Synderal~~were ~~Services~~valued ~~LTD,~~using athe ~~corporation~~Black-Scholes ~~organized~~pricing model under the ~~laws~~assumptions ofnoted ~~the~~below ~~Republic~~totaling $3,698 ofbooked ~~Cyprus~~to ~~("SSL"),~~additional ~~representing~~paid ~~all~~in ~~issued~~capital and ~~outstanding~~offset ~~shares~~as ofstock ~~SSL~~issuance ~~for $1,250,000~~fees. ~~SSL~~Volatility iswas ~~engaged~~calculated inby using the ~~gas~~average volatility ~~exploration~~of ~~and~~three ~~production~~benchmark ~~business~~companies in ~~Ukraine~~the ~~through~~same ~~its~~line ~~two~~of ~~wholly-owned~~business ~~subsidiaries,~~with ~~Limited~~similar ~~Liability~~revenues and assets. The Company ~~NPK-KONTAKT~~apportioned value ~~and~~to ~~Limited~~the ~~Liability~~warrants ~~Company~~based ~~LISPROMGAZ,~~on ~~each~~the arelative ~~legal~~fair ~~entity~~market ~~formed~~value ~~under~~of the ~~laws~~Common ofStock ~~Ukraine~~and warrants.

~~Under the Option Agreement, the Company is required to pay to BHL $412,500 as an advance payment to be credited towards the purchase price of the SSL’s shares.~~ The following ~~balance~~table ofpresents the ~~purchase~~assumptions ~~price~~used ~~in the amount of $837,500 shall be paid by the Company upon exercise of the option~~ to beestimate ~~completed by December 31, 2013. If~~ the ~~Company~~fair ~~elects~~values ~~not to exercise the option to purchase the SSL’s shares, BHL is required to return to the Company the advance payment. This obligation by BHL is secured by the pledge~~ of ~~all~~ the ~~issued~~stock warrants and ~~outstanding~~options ~~shares of BHL by its shareholder. As September 30, 2013, the Company has paid $412,500 in advancements of cash payments.~~granted:

On July 25, 2013, the Company issued 25,799,984 shares of Common Stock to BHL in connection with the option grant closing under the Option Agreement. Such Common Stock was issued in accordance with an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), under Section 4(2) of the Securities Act by virtue of compliance with the provisions of Regulation S under the Securities Act.

	2014			2013
Expected volatility		287- 364	%		287-294	%
Expected dividends		0	%		0	%
Expected term		5 Years			5 Years
Risk-free interest rate		1.36 – 1.70	%		1.36 –1.43	%

InThe following ~~connection~~table ~~with~~summarizes the ~~issuance~~changes ofin ~~25,799,984~~warrants ~~shares~~outstanding ofissued ~~Common~~to ~~Stock,~~employees ~~BHL entered into a Stock Escrow Agreement~~ and ~~a Lock~~non-Upemployees ~~Agreement with Epsilon. Pursuant to the Stock Escrow Agreement, BHL delivered to the escrow agent the shares~~ of ~~Common Stock issued to it to be held by~~ the ~~escrow agent pending the closing of the option exercise to purchase shares of SSL by the~~ Company ~~under~~during the period ~~Option~~ended ~~Agreement~~June in30, ~~which case such shares will be released by the escrow agent to BHL~~2014. Shall the parties to the Option Agreement fail to consummate the purchase of SSL shares by the Company; the escrowed shares will be cancelled. BHL has no right to vote the escrowed shares until such time as they are eligible for release to BHL.

As of September 30, 2013, the Company had $1,252,596 in deposits for investment in subsidiaries of which $415,000 was paid in cash, $837,500 remaining as accrued investment in subsidiary liability, and $2,597 was paid by common shares valued at par.

Date Issued	Number of Warrants		Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Expiration Date (yrs)		Value if Exercised
Balance December 31, 2013		144,000	$	1.00	$	1.00		5.00	$	144,000
Granted		5,000		1.00		1.00		5.00		5,000
Exercised		-		-		-		-		-
Cancelled/Expired		-		-		-		-		-
Outstanding as of March 31, 2014		149,000	$	1.00	$	1.00		5.00	$	149,000
Granted		6,000		1.00		1.00		5.00		6,000
Exercised
Cancelled/Expired
Outstanding as of June 30, 2014		155,000	$	1.00	$	1.00		5.00	$	155,000

10F-12

~~GREAT~~NOTE 9 ~~EAST~~– ~~ENERGY,~~RELATED ~~INC.~~PARTY PAYABLES

(AThe related ~~DEVELOPMENTAL~~party ~~STAGE~~payable ~~COMPANY)~~consists of reimbursement of expenses and compensation to the Company’s acting Chairman and acting CEO for their services. Each of them is to receive the Company’s common shares in addition to a monthly cash payment for the period of April 15, 2013 through December 31, 2013. The compensation was calculated based on their average hours worked per week applied to an hourly rate that is compatible to the market rate of similar positions. The total of these related party payables as of June 30, 2014 and December 31, 2013 were $499,087 and $340,525, respectively.

~~NOTES~~ On TOJuly ~~CONDENSED~~25, ~~CONSOLIDATED~~2013, ~~FINANCIAL~~GEEI ~~STATEMENTS~~entered into the Option Agreement with BHL, whereby BHL granted to GASE an option to purchase 1,000 shares of equity capital of SSL, representing all issued and outstanding shares of SSL, for $1,250,000.

~~(UNAUDITED)~~Under the Option Agreement, GEEI was required to pay to BHL $412,500 as an advance payment to be credited towards the purchase price of the SSL shares. The Company made the advance payment on July 25, 2013. The balance of the purchase price in the amount of $837,500 was paid by GEEI upon exercise of the option that was completed on November 25, 2013 by paying to BHL $500,000 in cash and issuing a promissory note in the principal amount of $337,500 for the balance of the option exercise price. The note bears no interest and has a maturity date of December 31, 2013, which was extended to September 30, 2014. The obligations of GEEI under the note are secured by 1,000 shares of SSL purchased by GEEI under the Option Agreement in accordance with the Pledge and Security Agreement dated November 25, 2013 made by GEEI in favor of the collateral agent acting on behalf of BHL.

~~SEPTEMBER~~As of June 30, ~~2013~~2014, the Company had reduced the cost of the option by $165,000 and paid $750,000 in cash, $337,500 remaining as a non interest loan to BHL, and $2,597 was paid by common shares valued at par. The note is due on September 30, 2014.

NOTE 10 9 – ~~GOING~~TAXES ~~CONCERN~~PAYABLE

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern. The Company has incurred approximately $3,696,588 in operating deficit since its inception, and has generated no operating revenue, which could raise substantial doubt about the Company’s ability to continue as a going concern.

	June 30, 2014		December 31, 2013
VAT payable	$	620	$	4,432
Other taxes payable		6,823		5,135
	$	7,444	$	9,567

InNOTE 11 ~~view~~– ofFOREIGN ~~these~~CURRENCY matters, realization of the assets of the Company is dependent upon the Company’s ability to meet its financial requirements through equity financing and the success of future operations. These financial statements do not include adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.TRANSLATION

~~NOTE~~Transactions involving 10the –Company's ~~SUBSEQUENT~~two ~~EVENTS~~natural gas companies in Ukraine, are denominated in Ukrainian Hryvnia. Assets and liabilities denominated in Ukrainian Hryvnia will be revalued to the United States dollar equivalent in the future. The effect of change in exchange rates from the transaction dates to the reporting date, for assets and liabilities, is reported as a Cumulative Currency Translation Adjustment and included in Other Comprehensive Gains or (Losses). As of June 30, 2014, the Company had $(347,937) in foreign currency translation.

~~The Company has evaluated events from September 30, 2013 through the date the financial statements were issued and determined there are no other items to disclose.~~F-13

11NOTE 12 – CONTINGENCIES AND COMMITMENTS

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.~~Operating environment

The principal business activities of the Company are within Ukraine. Emerging markets such as Ukraine are subject to different risks than more developed markets, including economic, political and social, legal and legislative risks. As has happened in the past, actual or perceived financial problems or an increase in the perceived risks associated with investing in emerging economies could adversely affect the investment climate in Ukraine and the Ukraine’s economy in general. Laws and regulations affecting businesses operating in Ukraine are subject to rapid changes and the Company’s assets and operations could be at risk if there are any adverse changes in the political and business environment. See “Political Risks” in this footnote.

Taxation

The tax environment in Ukraine is constantly changing and characterized by numerous taxes and frequently changing legislation, which may be applied retroactively and are often unclear, contradictory, and subject to interpretation. Taxes are subject to review and investigation by a number of authorities, which are enabled by law to impose severe fines, penalties and interest charges and these amounts could be material. Future tax examinations could raise issues or assessments which are contrary to the Company’s tax filings.

Management believes that it has provided adequately for tax liabilities based on its interpretations of applicable tax legislation and official pronouncements.

Environmental liabilities

The Company routinely evaluates its obligations relating to new and changing environmental legislation.

As liabilities in respect of the Company’s environmental obligations are able to be determined, they are recognized immediately. The likelihood and amount of liabilities relating to environmental obligations under proposed or any future legislation cannot be reasonably estimated at present and could become material. Under existing legislation, however, management believes that there are no significant unrecorded liabilities or contingencies, which could have a materially adverse effect on the operating results or financial position of the Company.

Political Risks

After continuous political and social turbulence that resulted in dismissal of the acting President of Ukraine, on February 27, 2014, the Ukrainian parliament appointed an interim government with a mandate to execute the Ukraine-EU Association and Free trade agreements, negotiated USD 16 billion IMF program in order to support implementation of liberal economic, judicial and social reforms. The Parliament also scheduled presidential elections which took place May 25, 2014. The US and European Union also agreed to provide additional USD 20 billion financial and technical support for Ukraine in light of its recent economic and military tensions with Russian Federation.

Political unrest in Ukraine of the past months and recent increase in political, economic and military pressures from Russian Federation, had fueled activity of various secessionist groups in the eastern part of the country. This may have an adverse effect on the national security and economy, and increase risks of doing business in Ukraine or investing in the companies doing business in Ukraine. The situation is exacerbated by the tensions with the Russian Federation which annexed the Crimean peninsula in March 2014 and built up a significant military presence at its border with Ukraine. Russia actively provides financial, military and human resources to illegal armed groups, which are active in some north-eastern parts of Donbass. In order to counteract to such activities and potential consequences, starting from April, the government, enforcement agencies and armed forces of Ukraine are implementing anti terrorists operation (ATO).

Such events and circumstances have an adverse effect on investment climate in Ukraine and in case of further escalation might have further negative impact on the business environment.

F-14

NOTE 13 – GOING CONCERN

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern. The Company has incurred $3,179,887 in accumulated deficit since its inception and has generated $51,682 and $118,710, in operating revenue during the three and six months ended June 30, 2014. These matters raise substantial doubt about the Company’s ability to continue as a going concern.

In view of these matters, realization of the assets of the Company is dependent upon the Company’s ability to meet its financial requirements through equity financing and the success of future operations. These condensed consolidated financial statements do not include adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

NOTE 14– SUBSEQUENT EVENTS

The Company has evaluated events from June 30, 2014 through the date the financial statements were issued and determined no subsequent events warranted accounting disclosure.

On July 25, 2014, one share of Series A preferred stock was automatically converted into one share of the Company’s common stock.

F-15

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

THE DISCUSSION IN THIS SECTION CONTAINS CERTAIN STATEMENTS OF A FORWARD-LOOKING NATURE RELATING TO FUTURE EVENTS OR OUR FUTURE PERFORMANCE. WORDS SUCH AS "ANTICIPATES," "BELIEVES," "EXPECTS," "INTENDS," "FUTURE," "MAY" AND SIMILAR EXPRESSIONS OR VARIATIONS OF SUCH WORDS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, BUT ARE NOT THE ONLY MEANS OF IDENTIFYING FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS ARE ONLY PREDICTIONS AND ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY. IN EVALUATING SUCH STATEMENTS, WE URGE YOU TO CAREFULLY CONSIDER VARIOUS FACTORS IDENTIFIED IN THIS REPORT, WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING STATEMENTS.

~~Great~~The ~~East~~Company ~~Energy,~~is ~~Inc.~~focused on ~~(the~~growing ~~“Company”)~~gas isproduction avolumes ~~Delaware~~in ~~corporation~~Ukraine ~~organized~~through onexpansion ~~October~~of 17its assets base by exploring and developing its existing license field, ~~2011~~as ~~under~~well ~~the~~as ~~name~~through ~~Epsilon~~evaluation ~~Corp~~and pursuit of new investment opportunities. The Company’s ~~changed~~management ~~its~~anticipates ~~name~~that in addition to ~~Great~~the ~~East~~existing ~~Energy~~assets which will continue to provide ongoing revenues from our productive gas wells, ~~Inc.~~the ~~effective~~Company's surface ~~September~~and 10sub-surface facility optimization, ~~2013~~expected new drilling activities and discovery of new resources will contribute to increased production volumes.

Recent Developments

On June 1, 2013, our then President and CEO Mr. David Schwartz and GEEI entered into an Affiliate Stock Purchase Agreement, which was amended on July 15, 2013, pursuant to which on July 25, 2013 Mr. Schwartz sold to Great East Energy, Inc., a Nevada corporation and a wholly-owned subsidiary of the Company (“GEEI”) 3,000,000 pre-split shares of the Company’s common stock representing approximately 89.3% of the then issued and outstanding shares of common stock.

On July 25, 2013, the Company entered into and consummated the transactions contemplated by the Share Exchange Agreement with GEEI and its shareholders whereby the Company purchased from the shareholders of GEEI all issued and outstanding shares of GEEI’s common stock in consideration of the issuance of 5,893 pre-split shares of common stock of the Company.

The Share Exchange resulted in (i) a change in control of the Company with GEEI and the shareholders of GEEI owning approximately 89.3% of the then issued and outstanding shares of common stock of the Company, and (ii) appointment of certain nominees of the shareholders of GEEI as directors and officers of the Company and resignation of David Schwartz as director, chief executive officer, chief financial officer, secretary and treasurer of the Company.

GEEI is deemed to be the accounting acquirer and the Company to be the accounting acquiree. The financial statements before the date of the Share Exchange are those of GEEI with the results of the Company being consolidated from the date of the Share Exchange. The equity section and earnings per share have been retroactively restated to reflect the reverse acquisition. The share exchange of a private operating company with a non-operating public shell corporation with nominal net assets is considered to be a capital transaction, in substance, rather than a business combination, for accounting purposes. Accordingly, GEEI treated this transaction as a capital transaction without recording goodwill or adjusting any of its other assets or liabilities.

On July 25, 2013, the Company issued 460,714 pre-split shares of its common stock to Bezerius Holdings Limited, a corporation organized under the laws of the Republic of Cyprus (“BHL”) in connection with the option grant closing under that certain Stock Purchase Option Agreement dated July 25, 2013 by and between GEEI and BHL (the “Option Agreement”) , whereby BHL granted to GEEI an option to purchase 1,000 shares of equity capital of Synderal Services LTD, a corporation organized under the laws of the Republic of Cyprus ("SSL"), representing all issued and outstanding shares of SSL, for $1,250,000. SSL is engaged in the gas exploration and production business in Ukraine through its two wholly-owned subsidiaries, Limited Liability Company NPK-KONTAKT and Limited Liability Company LISPROMGAZ, each a legal entity formed under the laws of Ukraine.

GEEI cancelled 3,000,000 pre-split shares of common stock acquired from Mr. Schwartz effective immediately after the issuance of the shares to BHL. This resulted in a change of control of the Company with BHL owning approximately 51.2% of the issued and outstanding shares of common stock of the Company.

On July 25, 2013, the Company a private placement of an aggregate of 10,982 pre-split shares of the Company’s common stock for an aggregate purchase price of $615,000 at a per share price of $56 with an accredited investor. The Company used $412,500 out of the gross proceeds of the closing to make a payment to BHL under the Option Agreement in connection with the option grant closing. The balance of $837,500 under the Option Agreement is due upon our exercise of the option to occur on or before September 30, 2013.

On August 2, 2013, the Company consummated a private placement of an aggregate of 3,517 pre-split shares of its common stock for gross proceeds of $200,000 at a per share price of $56 to an accredited investor.

On August 8, 2013, the Company consummated a private placement of an aggregate of 4,910 shares of Common Stock, for gross proceeds of $275,000 at a per share price of $56 to accredited investors.

On September 16, 2013, the Company effected a 56-for-1 forward stock split of its issued and outstanding shares of common stock. As a result of the forward split, 907,641 shares of common stock issued and outstanding immediately before the forward split increased automatically, and without any further action from the Company’s stockholders, to 50,827,896 shares of common stock. The authorized number and par value of common stock were unchanged.

Plan of Operations

~~At this time~~Since 2004, the Company’s ~~purpose~~explored isand todeveloped ~~complete~~ the ~~transactions~~shallow ~~contemplated~~gas-bearing byhorizons ~~the~~only ~~Option~~at ~~Agreement~~two ~~and~~of toseven ~~engage~~domes inwithin the ~~business~~license ofarea; we ~~developing~~currently ~~and~~operate ~~operating~~only ~~currently~~two ~~producing~~productive ~~natural~~wells. ~~gas~~Thus, ~~properties~~we ~~located~~believe inthat ~~Ukraine~~the ~~upon~~Company ~~such~~has ~~completion~~unrealized ~~through~~opportunity ~~its~~and ~~two~~can ~~indirect~~create ~~Ukrainian~~the base ~~subsidiaries,~~for ~~Limited~~further ~~Liability~~expansion. ~~Company~~We ~~NPK-KONTAKT~~have ~~and~~developed ~~Limited~~a ~~Liability~~production ~~Company~~increase ~~LISPROMGAZ,~~plan tofor beyears ~~acquired~~2014-2018, ~~upon~~key ~~exercise~~elements of ~~the~~this ~~option.~~plan include:

~~Results~~Increase production within overthrust /belowthrust domes. We plan to enhance our gas production volumes on Northern Tomashevskoye and Southern Tomashevskoye domes through fracking and stimulation on our existing two exploratory, but currently suspended wells. Our 2014-2018 drilling program also includes drilling three new “shallow” and four new “deep” operated wells on Northern Tomashevskoye and Southern Tomashevskoye domes with implementation of ~~Operations~~fracking and stimulation technology to enhance initial production. In addition we plan to drill nine new “deep” exploratory wells on Zolotarivska, Toshkievskaya and Petrograd-Donetsk domes with fracking and stimulation.

WeMonetize CBM ~~did not have any revenues since inception~~production. We ~~incurred~~intend ~~operating~~to ~~expenses~~monetize ofour ~~$3,734,484,~~Coal-bed ~~and~~Methane ~~realized~~(CBM) aproduction ~~net~~by ~~loss~~modernizing ofdegasification ~~$3,734,484~~equipment ~~for~~and connecting ~~the~~our ~~three~~current ~~months~~two ~~ended~~degassing ~~September~~wells ~~30,~~with ~~2013.~~existing Wedelivery ~~incurred~~infrastructure. ~~operating~~For ~~expenses~~this, ofin $4July 2014,~~222,456,~~ ~~and~~we ~~realized~~acquired afrom ~~net~~European manufacturer ~~loss~~relevant ofequipment. $4All deliveries,~~222,456~~ ~~for~~installations ~~the~~and ~~period~~connections ~~since~~should ~~inception~~be oncompleted ~~April~~the 5,fourth ~~2013~~quarter toof ~~September 30, 2013~~2014.

Further, we intend to significantly enhance our CBM production by drilling numerous new shallow vent-wells up to 500m each.

Conduct further geological research within our Lisichansk-Toskovskay area. We intend to obtain new geological information for potential additional under-fault gas resources by reworking and deepening the 7K well up to 1,500 meters (under the fault) or drilling a new well up to 1,500 meters. We will also focus our efforts to carry out modern geological studies on the entire license area through 2D and 3D seismic as well as modern helium survey. As a result, we expect to compile a geophysical database and obtain geological proofs to update our reserves valuation.

Our 2014-2018 strategic and operational plan is subject to various factors, including market conditions, gas field services and equipment availability, commodity prices, drilling results and political instability. While we continue to explore opportunities to enhance our gas production volumes, our main efforts will be focused on drilling and completing wells. If we choose to pursue the rapid expansion strategy, we will contemplate obtaining greenfield licenses directly from government authorities and acquire underperforming existing operators that have room to grow.

Results of Operations for the Three and Six Months ended June 30, 2014 and 2013

The following table discloses our gas sales volumes for the periods indicated:

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2014		2013		2014		2013
Sales Volume:
Gas production (MMcf)		6.12		7.31		12.33		14.87
Gas sales price ($/Mcf) (excluding VAT)		7.82		9.74		8.23		9.63
Gas sales ($)		47,854		71,210		101,504		143,173

Natural gas sales revenues. Natural gas sales volumes decreased by 1.19 MMcf and 2.54 MMcf to 6.12 MMcf and 12.33 MMcf for the three and six months ended June 30, 2014, respectively, compared to the same periods in 2013. Natural gas revenues decreased by $23,356 and $41,669 to $47,854 and $101,504 for the three and six months ended June 30, 2014, respectively, compared to the same periods in 2013. The decrease in natural gas revenues was due to the devaluation of the hryvnia currency and also to the decrease of gas methane production compared to the same period in 2013.

The following table sets forth selected consolidated financial data as of and for the period ended June 30, 2014 and December 31, 2013.

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
Gas sales	$	47,854		$	71,210		$	101,505		$	143,173
Other sales		2,932			8,019			15,095			9,420
Other income		896			8,055			2,110			16,287
Total Revenues and Other Income		51,682			87,284			118,710			168,880
Operating expenses:
Operating and maintenance expenses		42,141			53,632			92,595			112,601
General and administrative expenses		26,266			63,746			70,636			95,072
Depreciation, depletion and amortization		19,891			27,595			37,560			55,301
Professional fees		111,121			2,500			294,270			4,904
Total Operating Expenses		199,419			147,473			495,061			267,878
Loss from operations		(147,737	)		(60,189	)		(376,351	)		(98,998	)
Other income (expense):
Finance costs		-			(54	)		-			(1,858	)
Total other income (expense)		-			(54	)		-			(1,858	)
Loss before income taxes		(147,737	)		(60,243	)		(376,351	)		(100,856	)
Income tax benefit/(provision)		749			(2,631	)		750			6,901
Net loss applicable to common shares	$	(146,988	)	$	(62,874	)	$	(375,601	)		(93,955	)
Other comprehensive loss:
Foreign currency translation adjustment		(50,539	)		-			(347,937	)		-
Total other comprehensive loss		(50,539	)		-			(347,937	)		-
Comprehensive Loss	$	(197,527	)	$	(62,874	)	$	(723,538	)		(93,955	)

Other income and other sales. Our other sales and income 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 income and other sales decreased by $12,246 and $8,501 to $3,828 and $17,206 for the three and six months ended June 30, 2014, respectively, compared to the same periods ended June 30, 2013.

Operating and maintenance expenses. Our operating and maintenance expenses of $42,141 mainly included wages and salaries of the gas production personnel, cost of materials, taxes and duties. Operating and maintenance expenses decreased by $11,491 and $20,006 for the three and six months ended June 30, 2014, respectively, compared to the same periods ended June 30, 2013, mainly due to decreases in material expenses.

General and administrative (“G&A”) expenses. G&A expenses decreased by $37,480 and $24,436 to $26,266 and $70,636 for the three and six months ended June 30, 2014, respectively, compared to the same periods ended June 30, 2013. Substantial cost saving is connected with the fact that in the relevant period of 2013, the company attracted the engineering companies for preparation of the necessary documentation for submission to the state authorities for extension of the special permit for production of gas by Ukrainian companies.

Depreciation, depletion and amortization (“DD&A”) expenses. Our DD&A expense decreased $7,704 and $17,741 to $19,891 and $37,560 for the three and six months ended June 30, 2014, respectively, compared to the same periods ended June 30, 2013.

Professional fees. Professional fee expenses increased $108,621 and $289,366 to $111,121 and $294,270 for the three and six months ended June 30, 2014, respectively, compared to the same periods ended June 30, 2013. The increase is due to additional accounting, legal, and consulting expenses.

Loss from operations. Our operating loss was $147,737 and $376,350 for the three and six months ended June 30, 2014, respectively, an increase to the operating loss of $87,494 and $275,494, compared to the operating loss of $60,243 and $100,856 for the same periods ended June 30, 2013, respectively. This increase in operating loss is primarily attributed to an increase in professional fees.

Net loss. Our net loss was $146,988 and $375,601 for the three and six months ended June 30, 2014, respectively, as compared to a net loss of $62,874 and $93,955 for the same periods ended June 30, 2013, respectively.

Liquidity and Capital Resources

The following ~~Company~~is ~~does~~a ~~not~~summary ~~currently have sufficient resources to cover ongoing expenses and expansion. In July and August 2013, we consummated private placements~~ of our ~~securities~~change ~~which resulted~~ in ~~aggregate~~cash ~~gross~~and ~~proceeds~~cash toequivalents usfor ~~of $1,090,000. We used $412,500 out of~~ the ~~gross~~six ~~proceeds~~months ofended ~~the~~June ~~closing to make a payment to BHL under the Option Agreement in connection with the option grant closing. The balance of $837~~30,~~500~~ ~~under~~2014 ~~the~~and ~~Option Agreement is due upon our exercise of the option to occur not later than December 31,~~ 2013~~. We plan on raising additional funds from investors to implement our business model. In the event we are unsuccessful, this will have a negative impact on our operations.~~:

If the Company cannot find sources of additional financing to fund its working capital needs, the Company will be unable to obtain sufficient capital resources to operate our business. We cannot assure you that we will be able to access any financing in sufficient amounts or at all when needed. Our inability to obtain sufficient working capital funding will have an immediate material adverse effect upon our financial condition and our business.

	For the six months ended June 30
	2014			2013			Change
Net cash used in operating activities	$	(150,341	)	$	(46,851	)	$	(103,490	)
Net cash (used in) provided by investing activities		(714	)		312,122			(312,836	)
Net cash provided by / (used in) financing activities		111,990			(312,054	)		424,044
Increase (Decrease) in cash	$	(39,065	)	$	(46,783	)	$	7,718
Effect of translation		(11,707	)		(501	)		(11,206	)
Net Increase (Decrease) in cash		(50,772	)		(47,284	)		(3,488	)

13Operating activities.

During the six months ended June 30, 2014 cash used in operating activities was $150,341 as compared to cash used in operating activities during the same period ended June 30, 2013 in the amount of $46,851.

Investing activities.

During the six months ended June 30, 2014 and 2013, net cash used in investing activities was $714 and net cash provided by investing activities of $312,122, respectively. The decrease was primarily attributed to repayments of notes receivable in 2013.

Financing activities.

During the six months ended June 30, 2014, cash provided by financing activities was $111,990 compared to cash used in financing activities during the same period ended June 30, 2013 in the amount of $312,054. The increase was primarily due to the increase in proceeds from common stock issued for cash and the difference in repayments of loans.

Our initial drilling program for 2014 is designed to provide flexibility in identifying suitable well locations and in the timing and size of capital investment. Our 2014 capital expenditure budget contemplated drilling of two shallow productive wells on Northern Tomashevskoye and Southern Tomashevskoye domes, modernizing degasification equipment and connecting our current two degassing wells with existing delivery infrastructure. Additionally in 2014, we intended to enhance our gas production through fracking and stimulation on our existing two exploratory, but currently suspended wells. Our capital expenditure budget was estimated at approximately $5.00 million in 2014 and is dependent on various factors, including market conditions, services and equipment availability, gas price and drilling results.

Due to unfavorable political developments in Ukraine, as described above, see the note 12, the company decided to postpone the beginning of drilling of new wells to the fourth quarter of 2014 and the first quarter of 2015.

Sources of Capital

Issuance of equity. In order to support our capital and exploration expenditures we plan to raise the equity capital from investors. As of the date of this filing, we raised $1,550,000 in gross proceeds from sale of our common stock. We will continue to assess our liquidity position and conditions on the capital markets and may increase or decrease our financing activities in 2014 accordingly.

Cash flow from operations. Since the drilling program in 2014 has not been implemented, we do not expect a significant increase in our cash flow from operations.

Critical Accounting Policies

Development stage entity

The Company is considered a development stage entity, as defined in FASB ASC 915, because since inception it has not commenced operations that have resulted in significant revenue and the Company’s efforts have been devoted primarily to activities related to raising capital.

Going concern

The ~~Company's~~accompanying financial statements have ~~are~~been prepared onin aaccordance ~~going~~with ~~concern~~accounting ~~basis,~~principles ~~which~~generally ~~contemplates~~accepted in the ~~realization~~United States of ~~assets~~America, ~~and~~which ~~the~~contemplates continuation ~~satisfaction~~ of ~~obligations in~~ the ~~normal~~Company ~~course~~as ofa ~~business~~going concern. ~~However,~~The itCompany has noincurred ~~cash~~$3,179,887 ~~has~~in ~~losses~~accumulated ~~and~~deficit ansince ~~accumulated~~its ~~deficit~~inception, and ahas ~~working~~generated ~~capital~~$118,710 ~~deficiency.~~of ~~The~~operating ~~Company~~revenue ~~does~~during ~~not~~the ~~currently~~six ~~have~~months ~~any~~ended ~~revenue~~June ~~generating~~30, ~~operations~~2014. These ~~conditions,~~items ~~among others,~~ raise substantial doubt about the ~~ability of the~~ Company’s ability to continue as a going concern.

In view of these matters, ~~continuation~~realization asof athe ~~going~~assets ~~concern is dependent upon continued operations~~ of the Company, ~~which in turn~~ is dependent upon the Company'’s ability to, ~~meets~~meet its financial requirements, ~~raise~~through ~~additional~~equity ~~capital,~~financing and the success of ~~its~~ future operations. ~~The~~These financial statements do not include ~~any~~ adjustments relating to the ~~amount~~recoverability and classification of ~~assets~~recorded asset amounts and classification of liabilities that ~~may~~might be necessary should the Company ~~not~~be ~~continue~~unable asto acontinue ~~going~~in ~~concern~~existence.

Management believes they can raise the appropriate funds needed to support their business plan and acquire an operating company with positive cash flow. Management intends to seek new capital from owners and related parties to provide needed funds.

Off-Balance Sheet Arrangements

We do not have off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as "special purpose entities" (SPEs).

144

~~Item~~ ITEM 4. CONTROLS ~~Controls~~AND ~~and Procedures~~PROCEDURES.

Disclosure Controls and Procedures.

The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to principal executive and principal financial officers to allow timely decisions regarding disclosure.

~~The~~As of ~~Company~~the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of ~~the~~our ~~Company’s~~chief ~~management,~~executive ~~including~~officer ~~the Company’s Chief Executive Officer (“CEO”)~~ and ~~Chief~~chief ~~Financial Officer (“CFO”) (the Company’s principal~~ financial ~~and accounting~~ officer), of the effectiveness of the ~~Company’s~~design ~~disclosure~~and operation of our disclosure controls and procedures. asBased ofon ~~the~~this ~~end~~evaluation, ofour ~~the~~chief ~~period~~executive ~~covered~~officer byand ~~this~~chief ~~report.~~financial ~~Based~~officer ~~upon~~concluded that ~~evaluation,~~our disclosure ~~the~~controls ~~Company’s~~and ~~CEO~~procedures ~~and~~were ~~CFO~~not ~~concluded~~effective ~~that~~as of the ~~Company’s~~end ~~disclosure~~of ~~controls~~the ~~and~~period ~~procedures~~covered ~~are~~by ~~effective~~this report.

Changes in Internal ~~Control~~Controls over Financial Reporting.

~~There~~No change ~~have been no changes~~ in our system of internal control over financial reporting ~~identified~~occurred induring ~~connection with~~ the ~~evaluation~~period ~~that~~covered ~~occurred~~by ~~during~~this ~~our~~report ~~last fiscal quarter~~ that has materially affected, or ~~that~~ is reasonably likely to materially affect, our internal control over financial reporting.

15PART II- OTHER INFORMATION

~~PART II - OTHER INFORMATION~~ITEM 6. EXHIBITS.

~~Item~~(a) The 6.following ~~Exhibits~~exhibits are filed herewith:

Exhibit No.		Description
31.1	Certifications by the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.1		Certifications by Michael Doron pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certifications by the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certifications by Michael Doron pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document.
101.SCH	XBRL Schema Document
101.CAL	XBRL Calculation Linkbase Document
101.DEF	XBRL Definition Linkbase Document
101.LAB	XBRL Label Linkbase Document
101.PRE	XBRL Presentation Linkbase Document

101.INS**		XBRL Instance Document
101.SCH**		XBRL Taxonomy Extension Schema Document
101.CAL**		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**		XBRL Taxonomy Extension Label Linkbase Document
101.PRE**		XBRL Taxonomy Extension Presentation Linkbase Document

________________

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Great East Energy, Inc.
	GASE Energy, Inc.
Dated: November 19, 2013	By:	/s/ Michael Doron
Date: August 19, 2014	By:	/s/ Timur Khromaev
		Michael Doron
		Name: Timur Khromaev
		President, Chief Executive Officer, Chief Financial Officer and Director
		Title: Chief Executive Officer, Chief Financial Officer and Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

Filing Compare · GASE ENERGY, INC.