Greka Drilling Ltd (LON:GDL) has won two new drill contracts with PetroChina Huabei Oilfield Limited, for coal-bed methane blocks in Shanxi Province.
The China-focussed drilling and well services contractor estimates that the new contracts will be worth a total of US$2mln.
One contract, in the Fanzhuang block, will last for one year and will span a total of 16 wells. Here, work is due to start by the end of this month.
WATCH: Greka Drilling's Randeep Grewal hails new drill contract wins in China
Meanwhile, the Anze block the contract will last for two years. It is will cover 10 directional wells, to be drilled over two drill pads.
First, however, Greka Drilling is working to complete an expanded prior contact – initially it was for five horizontal wells in the Fanzhuang block, four have been completed, and one extra well was added. The company expects to complete the two remaining wells this month.
Randeep Grewal, Greka chairman said in a statement that the new contracts confirm that the service sector in China has turned the corner following three years of stagnation.
“We are very pleased with the repeat contracts from China's flagship energy company - PetroChina CNPC,” Grewal said.
“The repeat nature of the contracts is confirmation of our drilling proficiency and technical capability.
“Among the significant number of state-owned drilling companies, Greka stands out as the only independent foreign drilling contractor sustainably providing services within the CBM sector in China to the majors.”
He added: “The government's steadfast support for the development of the CBM resources is the catalyst to enable the revitalization of the sector of which Greka Drilling stands to be a natural beneficiary."