Greka Drilling Limited (AIM: GDL), the largest independent and specialised unconventional oil & gas driller in Asia, is pleased to provide an operations update to 30 June 2016.
H1 2016 Operational Highlights
- In accordance with our guidance in February this year, activity levels have been limited in the first half of 2016. GDL has drilled 10 wells (3 in China and 7 wells in India) in the first 6 months compared to 28 wells in the same period last year.
- Of the wells drilled there was:
- 1 Vertical well in China with a total depth (“TD”) of 789 metres and completed in 12.94 days (spud to completion)
- 7 Directional wells in India which averaged 11.51 days, a 42% improvement on the average of 19.82 days in the same period in 2015. The fastest Directional well was drilled to TD 1,036 metres in 9.3 days
- 2 Horizontal wells in China with the fastest being drilled to TD of 1,658 metres in 27.49 days (spud to completion)
- In total there were 12,458 metres drilled (4,128 metres in China and 8,330 metres in India) compared to a total of 26,367 metres in H1 2015
- The 8,330 metres drilled in India compares with a total of 9,920 metres in India for the whole of FY 2015
H2 2016 OPERATIONS OUTLOOK
- Essar Oil Limited:
- Expected to drill 30 wells with 2 rigs deployed under the current contract
- Potential for deployment of a third rig under the current contract
- In advanced talks with new potential clients for:
- The mobilising of a rig and other equipment for drilling of wells in the Central part of India
- To mobilise 2 rigs and other equipment for drilling on a multi-year contract
- Green Dragon Gas Ltd. has requested GDL to prepare for an 8 well programme starting this fall.
- Other wells for existing and new clients expected to include:
- 6 wells likely start in November 2016
- 6 Directional wells for tight gas
Randeep S Grewal, Chairman and Chief Executive of Greka Drilling, commented:
“We had previously advised the market that we expect this year to be challenging while the oil & gas operators realign their portfolios to the new oil price environment. During this period we continued to take steps to reduce costs, improve our drilling efficiency and diversify our services and customer base. Indeed, we expect to have an equal client base this year between China and India.
In India we won a new contract from Essar Oil to provide drilling for vertical and directional wells on a day-rate basis. Greka Drilling has completed 7 directional wells under this contract and hopes to complete 30 wells with 2 rigs under the contract in H2 2016. GDL is also in advanced talks with other oil and gas operators to mobilise other rigs in the Central part of India.
In China it is anticipated that a number of larger E&P companies, including Green Dragon Gas, will start their programmes for 2016 in H2. GDL is well positioned and is in discussions in relation to carrying out this work. We remain confident about the market and the Company's longer term prospects in China.”
For further information on Greka Drilling, please refer to the Company’s website at www.grekadrilling.com or contact:
+44 (0)20 7016 9829
Gavin Davis / Molly Stewart
+44 (0)20 3772 2500
Dr Azhic Basirov / David Jones / Ben Jeynes
Nominated Adviser and Broker
Smith & Williamson
+44 (0) 20 7131 4000
This announcement is inside information for the purposes of Article 7 of Regulation 596/2014.