Greka Drilling Limited Third party contract (1992T)

TIDMGDL

RNS Number : 1992T

Greka Drilling Limited

11 December 2012

Greka Drilling Limited

("Greka Drilling" or "the Company")

Greka Drilling signs contract to drill 100 wells in Sinopec's Ordos Basin

Greka Drilling Limited (AIM: GDL), the largest independent and specialised unconventional oil & gas driller in China, is pleased to announce that it has signed a contract with Petro-king Oilfield Technology Ltd. ("Petro-king") (the "Contract"), which is the first in a series of expected third party contracts from China based exploration and production companies. This Contract is in addition to its on-going contract with Green Dragon Gas (AIM: GDG), one of the leading coal bed methane producers in China.

The 100 well drilling programme is due to commence immediately following the Chinese New Year in 2013. This allows the Company sufficient time to mobilise the initial committed rigs onto the chosen locations. The initial Contract is for 100 wells to be drilled in 2013 for Sinopec.

Petro-king is a well established local service company currently providing various services to Sinopec. A Memorandum of Understanding ("MOU") between Greka Drilling and Petro-king was entered into in June 2012, under which the parties agreed to promote each other's services. The MOU places Greka Drilling in an advantageous position to expand further into the unconventional resources market which is growing rapidly in China. The Contract is a result of such intent and will be within the massive Ordos Basin.

Prior to signing the Contract, Greka Drilling conducted extensive technical studies and geological surveys to ensure success and the concluding analysis confirmed Greka Drilling's ability to complete the Contract fully. The parties have agreed to evaluate the drilling programme following the first 20 wells to ensure mutual expectations are met and if any further enhancements are to be made.

Greka Drilling was awarded this initial contract by Petro-king-Sinopec to drill wells in Yijun, Changwu, Binxian, and other leases in Shaanxi province, in the Ordos Basin, where Petro-king-Sinopec plans to materially increase oil and gas production. 440 wells are planned to be drilled in this programme of which, at present, 100 have been committed to Greka Drilling.

The Ordos Basin, situated on the central-western part of the North China Craton, encompasses a 360,000 km2 area across the provinces of Gansu, Ningxia, Shaanxi, Shanxi and Inner Mongolia. Triassic-Jurassic sandstones and conglomeratic sandstones, as in the Ordos Basin, are conventional (already exploited) oil/gas reservoirs rock. Accumulations occur normally in stratigraphic traps. The source rocks of these accumulations are the target for unconventional oil and gas. Greka Drilling activity will be centered on the areas that lie structurally on the Yi-Shaan slope, the mid-section of the basin. The Yi-Shaan slope is a gentle monocline dipping to the West with an inclination of about 1 degree; conventional oil fields like Xifeng, Mailing, Huachi and Ansai make this region a major area for oil production in the Ordos Basin. These rocks have high organic content; several layers display characteristic high natural gamma values that can be used to geo-steer while drilling. The secondary purpose is to evaluate any other hydrocarbon accumulation which may be encountered.

The Contract is for an initial period of 12 months from 1 January 2013 and is renewable by mutual agreement. It includes customary rates for vertical and directional meters drilled, daily rig charges and standby charges.

Randeep Grewal, Chairman and CEO of Greka Drilling commented;

"This is another milestone achieved as anticipated. Our guiding principles have always dictated that the Company is the provider of premium services to the unconventional energy sector. We endeavour to provide our clients with the very best technology and methodology available in the industry. We are confident that our rigs, skilled personnel and management are technological leaders within our niche in China and such a third party contract to drill on Sinopec property further validates the business and the team leading it.

We consider this Contract to be the first of a number of third party contracts to achieve the objective of maintaining revenues derived by Greka Drilling from its affiliate, Green Dragon Gas (AIM: GDG) at below 33% of total revenues. We are well on the way to becoming a significant service provider within the oil and gas sector in China."

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 & Broker 
  Smith & Williamson                          +44 20 7131 4000 
 
 Jeffrey Auld / Steve Baldwin 
  Broker 
  Macquarie Capital (Europe) Limited          +44 20 3037 2000 
 James Henderson / 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

END

CNTGGGCGPUPPPUU

Greka Drilling (LSE:GDL)
過去株価チャート
から 6 2024 まで 7 2024