Drilling Rig Fleet Growth Update (5258S)

TIDMGDL

RNS Number : 5258S

Greka Drilling Limited

22 November 2011

Greka Drilling Limited

("Greka Drilling" or "the Company")

Drilling Rig Fleet Growth Update

Greka Drilling Limited (AIM: GDL), the largest independent and specialised unconventional gas driller in China, is pleased to announce an update on its existing fleet and the delivery schedule of the 25 specialised CBM drilling rigs recently purchased.

Greka Drilling has now accepted delivery of a total of five new rigs, on schedule, which are all expected to be on the contracted drilling site by the end of this month. In July, the Company completed the conversion of all its existing rigs to drill LiFaBriC wells in a development of its horizontal SIS methodology applied to line faulted brittle coals. The arrival of the new rigs on site will bring the fleet size to 12 by the end of this month. The delivery of a further four new rigs per month is also expected to be completed on schedule, bringing the total rig fleet to 32 by May 2012, with an additional 125 on option.

The new rigs enhance utilisation rates through an improved drilling methodology which reduces the size of the rig team as well as reducing the time taken to drill a 1.5km well from in excess of 70 days in the initial research and development phase to 30 days. The new rigs will also enable the Company to engage in lucrative third party contracts with companies already producing unconventional gas in China, who are looking to Greka Drilling for the use of its innovative drilling methodology.

All the new drilling rigs will initially be dedicated to the Qinshui basin in Shanxi Province, China where Greka Drilling is focused on production drilling for Green Dragon Gas (AIM: GDG). The Company has outsourced vertical well drilling to third party contractors which enables the new fleet to have vertical wells in place to intersect with LiFaBriC drilling as the rigs arrive. This outsourcing approach facilitated an aggressive drilling program by GDG while Greka Drilling's new purpose built GD75 rig fleet arrives to complete the LiFaBriC wells.

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

"We are delighted to announce the arrival of the latest rigs, on schedule. The relentless efforts by Greka's on-site Chinese engineers, fluent in Italian, working along-side a dedicated DrillMec manufacturing team committed to deliver on this aggressive schedule has made this possible. We expect this team effort to maintain on time deliveries throughout this program.

The Greka DrillMec 75 (GD75) rig fleet is destined to evolve the efficiency of drilling for unconventional gas in China. This development has attracted significant attention and our recent first rig launch ceremony was attended by a large audience which included government dignitaries, customers, journalists and residents.

The LiFaBriC process coupled with the GD75 revolutionizes unconventional gas development in China in harmony with the environment, with the least amount of land utilization and with no fracking. This is yet another pioneering effort by Greka in China. We have handled each of the elements that have impeded our customer's development of their gas resources. We intend to demonstrate this potential in 2012 for our current customer, GDG, and others as we continue to grow our capacity."

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

 
 
  Stephen Hill, VP Corporate Communications 
  Greka Drilling Limited                        +852 3710 0108 
 Dr Azhic Basirov / David Jones 
  Nomad 
  Smith & Williamson                           +44 20 7131 4000 
 Matthew Tyler / Neil Elliot 
  Broker 
  Evolution Securities                         +44 20 7071 4312 
 Paul Connolly / John Dwyer / Steve 
  Baldwin 
  Broker 
  Macquarie Capital (Europe) Limited           +44 20 3037 2000 
 James Henderson / Nick Lambert / Rollo 
  Crichton-Stuart 
  Investor relations 
  Pelham Bell Pottinger                        +44 20 7861 3232

This information is provided by RNS

The company news service from the London Stock Exchange

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