EXHIBIT 2
July 11, 1997
Board of Directors
Great Eastern Energy and Development Corporation
5990 Greenwood Plaza Boulevard, Suite 127
Greenwood Village, Colorado 80111-4708
Gentlemen:
You have requested our opinion with respect to the fairness, from a
financial point of view, to the shareholders of Great Eastern Energy and
Development Corporation ("Company"), of the terms of the proposed offer
("Offer") to purchase outstanding shares of common stock of the Company by
Caprito Gas Corporation ("Caprito"). Under the terms of the Offer, Caprito will
tender for all of the issued and outstanding common stock of the Company at
$0.22 per share.
In arriving at our opinion we have:
1. Reviewed certain publicly-available financial statements and and reports
regarding the Company;
2. Analyzed certain internal financial statements and other financial and
operating data concerning the Company;
3. Reviewed certain reserve information provided by the Company relating to
the producing properties of the Company, including reserve reports prepared by
third- party independent petroleum engineers for the Company;
4. Reviewed additional engineering data which was provided by the Company;
5. Discussed with management of the Company the operations of and future
business prospects for the Company;
6. Conducted such other analyses and provided such other services as we
have deemed appropriate.
Great Eastern Energy and Development Corporation
Board of Directors
July 11, 1997
Page Two
In preparing our opinion, we have relied upon the accuracy and completeness
of, and have not independently verified, the information supplied to us by the
Company. We have not made any on-site inspections of any oil and gas properties
and have not reviewed any leases or other oil and gas contracts. With respect to
reserves, we have relied exclusively on the reserve report prepared by Resource
Services International, Inc., which was furnished by the Company. The evaluation
of proved reserves was as of January 1, 1997. The Company has advised us that
there has been no material change in production subsequent to the date of the
evaluation. With respect to the current interim financial statement of the
Company, we have assumed that it is accurate, complete, and has been prepared in
conformity with generally accepted accounting principles. We have inquired into
the reliability of such information and financial data only to the limited
extent necessary to provide a reasonable basis for our opinion, recognizing that
we are rendering only an informed opinion and not an appraisal or certificate of
value.
Our opinion is based on economic, market, financial, and other conditions
as they exist at the time of this letter. Events occurring after the date
hereof, including changes in the markets for oil and gas, could materially
affect the conclusions reached in this opinion.
As part of our business, we are continually engaged in the valuation of
companies and their securities in connection with business reorganizations,
private placements, mergers and acquisitions, and valuations for estate,
corporate, and other purposes.
Based on the foregoing and subject to the various assumptions and
limitations set forth herein, it is our opinion that on the date hereof that the
consideration to be received by the current shareholders of the Company in the
Offer is fair to them from a financial point of view.
Yours very truly,
\s\ B. P. Huddleston
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B. P. Huddleston, P.E.
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