Investor Relations

Completed LiFaBriC well for CNPC sets new records for Measured Depth and True Vertical Depth

18 April 2013

Greka Drilling Limited (AIM: GDL), the largest independent and specialized unconventional oil & gas driller in China, is pleased to announce that the first LiFaBriC well drilled under the third party contract for China National Petroleum Corporation (CNPC), the order for which was previously announced on 28^th December 2012, was successfully completed and accepted by CNPC. The completion set new records for Measured Depth (MD) and True Vertical Depth (TVD) of any LiFaBriC well drilled by the Company to date.

CNPC had specified that the well was to remain in coal from the landing point to the intersection with the vertical well and the Company is pleased to announce that it exceeded the target set by the customer for the number of meters in coal (lined) by 41 meters or 5.5%.  The vertical well took 29 days to complete. The lateral section of the LiFaBriC well had a MD of 1917 meters (compared with a previous record of 1801 meters) and a TVD of 1036 meters (compared with a previous record of 755 meters). The well was drilled in a new area for the Company which is defined as exploration drilling, as compared with the production drilling the Company is conducting for its first customer Green Dragon Gas Ltd (AIM: GDG).  The exploration drilling took 88 days from spud to completion, slightly better than previous Company guidance of 90 days for completing a LiFaBriC exploration well.

Randeep Grewal, Chairman and Chief Executive of Greka Drilling, commented:

“Successfully executing third party contracts is validation of the drilling fleet’s capability and the knowledge of the geologists and engineers present in the Company. Importantly, this well was drilled in a new terrain, albeit in the Qinshui Basin. The remote access afforded by the SCADA systems installed on the rigs allowed for the trained Chinese workforce to execute the drilling, overseen by experienced supervision, from a location some 150 km away in Zhengzhou. The Company’s business model is highly scalable, leading to the ability to secure a growing number of third party contracts. The topography at the CNPC location was flatter than at Green Dragon Gas’s Shizhuang South block, the coal deeper and the subsurface geology similarly faulted. The sheer size of the block, drilled to date only by traditional oil drilling rigs capable of drilling vertical wells that are later fracked, illustrates the vast opportunity that these 3^rd party contracts represent for Greka Drilling’s business. We look forward to our customer evaluating the higher gas production potential with our environmentally progressive LiFaBriC wells compared to the traditional vertical and fracked ones. We continue to actively discuss further drilling assignments with CNPC.”

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