Greka Drilling Limited Operations Update (0984P)

TIDMGDL

RNS Number : 0984P

Greka Drilling Limited

24 May 2018

24 May 2018

Greka Drilling Limited

("Greka Drilling" or the "Company")

Operations Update

Greka Drilling Limited (AIM: GDL), the largest independent and specialized unconventional oil & gas driller in Asia, is pleased to provide an Operations Update on its activities in China and India.

In China:

The Company has been awarded a drilling contract with Shanxi CBM Exploration and Development Branch of PetroChina ("PetroChina", a subsidiary of CNPC). This new drilling contract is to be deployed in PetroChina's CBM (coal bed methane) blocks - Fanzhuang and Zhengzhuang within Shanxi Province and is estimated to have a value of US$1.3m, at the minimum. This contract is part of a 240 well project where the Company expects to get further wells assigned. This new contract for the Fanzhuang and Zhengzhuang blocks is for one year, consisting of vertical and directional production wells. The drilling is planned to start prior to the end of Q2.

Additionally, drilling activities continue under the Company's other existing contracts with PetroChina where six of the Company's GD75 rigs are currently deployed. The Company's workover rigs continue to engage in operations on G3 Exploration's GSS block.

Drilling Achievements

Completed an exploration vertical well to 2,001m TD/TVD; the deepest vertical well drilled by our GD75 rig (previous deepest vertical well was drilled to 1,407m).

Fastest directional well drilled in 3.1 days from spud to a TD of 850m; previous fastest directional well was 3.5 days from spud to a TD of 793m.

In India:

The Company has completed discussions with Oil and Natural Gas Corporation ("ONGC") on the Bokaro drilling contract announced on 16 November 2017, and the contract has been terminated. Greka was fully committed to ONGC's proposed drilling campaign at Bokaro and had designated rigs and resources and had made the best workforce available for the project. However, the development plan drawn up by ONGC was not in the best interests of GDL and its shareholders. Greka Drilling wishes the best for ONGC in their upcoming campaign.

Essar has delayed the payment of monies owed to the Company (US$2m approximately) which has resulted in corresponding delays in payments due by the Company to sub-contractors. The Company's local management is focusing its efforts on resolving this situation.

On a more positive note, Greka Drilling continues its dialogues with a number of India's leading CBM developers and continues to be confident of being awarded drilling contracts in the expanding CBM market.

Mr. Randeep S. Grewal, Chairman of Greka Drilling, commented:

"We are very pleased that China's flagship energy company - PetroChina CNPC has again awarded Greka Drilling another new drilling contract. With significant drilling activity on several of PetroChina CNPC's CBM blocks, we are playing a key role in executing our client's drilling programs.

In India, we are indeed disappointed that the Bokaro contract with ONGC could not be put back on the rails. Notwithstanding, we remain bullish on the prospects of entering into contracts with CBM developers in India, including ONGC, under better terms and conditions in the future. The Indian CBM market is developing well under the pricing freedom for CBM introduced by the incumbent Government. We continue to see India as an exciting market for many years to come and remain committed to our dual geography strategy."

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

 
Smith & Williamson 
 Nominated Adviser and Broker 
 Azhic Basirov / David Jones    [phone] 
 / Ben Jeynes                              4000 
 

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

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

END

UPDDXLFLVEFFBBB

(END) Dow Jones Newswires

May 24, 2018 02:00 ET (06:00 GMT)