Greka Drilling Limited Greka Declared Winner of ONGC Contract (7297B)

TIDMGDL

RNS Number : 7297B

Greka Drilling Limited

06 April 2017

6 April 2017

Greka Drilling Limited

("Greka Drilling" or the "Company")

Greka declared winner of ONGC Contract

Greka Drilling Limited (AIM: GDL), the largest independent and specialized unconventional oil & gas driller in Asia, is delighted to announce that it has been declared the winner, subject to contract, of a three year integrated drilling contract by Oil and Natural Gas Corporation Limited ("ONGC ") for ONGC's Bokaro CBM asset (the "Contract") in India.

ONGC, the Indian Government owned company, is the largest exploration & production ("E&P") company in India and is engaged across the E&P and refining businesses. ONGC also has extensive joint-ventures globally.

Greka Drilling was among 17 bidders that submitted their bids for the Contract including both domestic Indian drilling contractors and global drilling contractors.

The Company has been informed by ONGC that it is the winning 'L1 bidder' of the Contract.

ONGC is now completing its internal procedures before issuing a letter of intent ("LOI") to the Company. The LOI, which is expected to be issued during April 2017, is expected to provide, subject to contract, for the drilling of 73 wells over the next three years. Under the Contract, the Company will deploy one of its purpose built efficient semi-automated GD75 rigs based in India. The project will entail the provision of drilling and mud services along with the provision of associated equipment and is estimated to generate revenues of a total of US$15 million over the three year period. Following receipt of the LOI, mobilization of the GD75 rig is expected within 90 days.

Randeep S. Grewal, Chairman & CEO of Greka Drilling, commented:

"I am very pleased to announce this significant milestone in our business development in India. While the Company has already demonstrated its expertise in India for its existing client, Essar Oil Limited, the winning of the ONGC tender against 16 other well established drilling contractors is a confirmation of Greka Drilling's mastery within the coal bed methane ("CBM") niche. As a global leader with over 20 years of experience in CBM drilling, we look forward to continuing our track record in supporting ONGC in its development of the Bokaro asset.

Greka Drilling is also in advanced talks with other oil and gas operators in India to mobilize additional rigs in the country during 2017. The Indian Government's progressive plan to develop domestic CBM gas resources was demonstrated in March this year when it approved market pricing freedom for all CBM produced and sold in India. This very long awaited policy has been a catalyst to the robust reaction from operators which are aggressively moving forward with their previously shelved drilling plans. In view of this CBM gas pricing reform, we are bullish on the prospect of increasingly providing our specialized drilling services within the niche CBM sector in India.

The Company has succeeded in executing a balanced business plan in two of the largest CBM markets - China and India. Following the award of the Contract, Greka Drilling will be under contract with State-owned companies in both China (CNPC) and India (ONGC) as well as with the largest domestic CBM developers Green Dragon Gas and Essar respectively.

Notwithstanding the slowdown in the drilling services market, the diversification of the Company's clients and geography gives the Company a well-balanced business plan for the long-term."

For further information on Greka Drilling, please refer to the Company's website at www.grekadrilling.com or contact:

 
Sarah Lowther 
 Media Relations                 [phone] 
 Greka Drilling                       9829 
 
Dr Azhic Basirov / David Jones 
 / Ben Jeynes 
 Nominated Adviser and Broker    [phone] 
 Smith & Williamson                        4000 
 
 

This announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

This information is provided by RNS

The company news service from the London Stock Exchange

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April 06, 2017 02:00 ET (06:00 GMT)