Sign up United Kingdom
Proactive Investors - Run By Investors For Investors
Why invest in GDL?
Greka Drilling Ltd: THE INVESTMENT CASE
INVESTMENT OVERVIEW

Greka Drilling expecting stronger 2018 on rising demand in China

"With firm drilling contracts signed with state owned enterprises, we start 2018 with a materially stronger foundation than last year”
Greka drilling rig truck
INVESTMENT OVERVIEW: GDL The Big Picture
Forty-one of the 48 wells drilled by the company in 2017 were in China

Greka Drilling Ltd (LON:GDL) boss Randeep Grewal is expecting a materially better 2018 thanks to rising demand for well drilling services in China.

"Though 2017 was still a challenging year, we saw a significant increase in drilling activity during the latter half of the year in China,” the Greka chairman said in a statement.

“We expect a stronger drilling mandate during 2018. With firm drilling contracts signed with state owned enterprises, we start 2018 with a materially stronger foundation than last year.”

READ: Greka Drilling wins two new PetroChina contracts; seeking clarity over India deal

Monday’s operating results for last year confirmed that 41 of 48 wells drilled by the company in 2017 were in China, and that’s a significant shift from the preceding twelve months (in 2016 only 5 of 33 wells were in China).

The drill contractor noted that it drilled 13 wells for G3 Exploration, up from 5 wells in 2016, and drilled 28 wells for other China based clients where none had been done the year before. Additionally, the company carried out ‘work overs’ on 52 existing wells for G3E in the year.

Meanwhile, in India 7 wells were drilled for Essar Oil during 2017 compared to 28 wells in 2016.

Measured in metres, the growth in operations is further highlighted. In 2017, the group drilled a total of 64,192 metres up from 39,553 metres in 2016.

The company also noted that 81% of the drilling, in metres, involved the use of Greka's in house MWD directional tools.

WATCH: 'Drought in drilling service sector is over' - Greka Drilling's Randeep Grewal

Looking ahead, in China, Greka noted that it has 35 remaining wells on contract in, meanwhile it expects to maintain its relationships (with CNPC, G3E and Petrochina) for additional mandates. The company is increasing its drilling fleet utilisation to 10 rigs, from 7, and it is to mobilise a second work-over rig.

“With the strong surge in drilling activity in China we expect to secure more drilling mandates and a greater drilling fleet utilization in 2018,” Grewal said.

In regards to the outlook for India, he added: “In India, with the pricing freedom around CBM, we would expect to see enhanced drilling activities in the years to come.

“Our focus will be to build upon our in country presence as the CBM expert and expand our customer base. 

“In the near term, we wish to get transparency from ONGC on its drilling commitment and planned activity. Once past contract matters have been concluded with our current customer Essar Oil, we would hope to enter a new mandate for drilling in 2018.

“Furthermore, we continue to discuss drilling campaigns with other operators within India."

View full GDL profile View Profile

Greka Drilling Ltd Timeline

Related Articles

Italy
August 07 2018
Currently it owns 100% positions in two southern Italian licences, but Aitken says reducing its interest in either or both would allow the group to broaden its reach
coal trucks
March 14 2018
Polish group Cobant is the latest partner and will work with AEG to develop a new "Super Fuel" that combines CoalSwitch and reclaimed coal
Jack-up oil rig
February 14 2018
'Russia represents a major opportunity for the company'

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use