Annual results for the year ended December 2015
21 April 2016
Greka Drilling Limited (AIM: GDL), the largest independent and specialised unconventional oil & gas driller in Asia, is pleased to announce annual results for the year ended 31 December 2015.
- There were 3 principal contracted counterparties: Green Dragon Gas Ltd and PetroChina Huabei in China, and Essar Oil Limited in India.
- 62 wells drilled in 2015, a 38% increase over the 45 wells drilled in 2014.
- A total of 76,690 metres drilled in 2015, a 31% increase over 2014 (58,520 metres).
- Annual revenues in 2015 increased to US$29.9m (2014: US$24.4m).
- Loss before tax widened to US$7.5m (2014: loss of US$5.3m) principally due to foreign exchange loss due to US$ appreciation against RMB. Foreign exchange losses in 2015 were US$3.6m (2014: US$0.8m).
- Earnings before Interest, Tax, Depreciation and Amortisation (“EBITDA”) in 2015 was US$2.4m (2014: US$1.9m).
- Gross margin of 20%, compared with 26% in the same period last year.
- Year-end cash and bank deposits of US$2.4m including restricted cash (2014: US$8.0m).
- Following the period end, a US$5 million debt facility was secured on 31 March 2016.
- Drilling efficiency improved significantly: in December 2015 we drilled 2,277 metres per rig per month in China, compared with 1,890 metres per rig per month in December 2014.
- The average drilling time for LiFaBriC lateral wells from spud to completion was 32.3 days in 2015 compared with 37.0 days in 2014.
- The longest LiFaBriC section in 2015, surface to intersection, was 1,760m measured depth (“MD”) (compared to 1,600m in 2014).
- The longest horizontal well in 2015, surface to target, was 1,928 metres MD for a third party client in China.
- We completed LiFaBriC wells intersecting into directional wells in China at a measured depth of 1,500 metres, which is technically more demanding than intersecting a vertical well.
- We successfully drilled an experimental LiFaBriC well into coal seam 15 in Qinshui Basin, thereby opening up a new resource access for our client Green Dragon Gas.
- The deepest directional well we drilled in 2015 had a 1,311 metres true vertical depth (“TVD”) and a 1,429 metres MD.
- Strong HSE focus, no Lost Time Injuries occurred in 2015.
Randeep S. Grewal, Chairman & CEO of Greka Drilling, commented:
“In 2015 we accomplished a 23% increase in revenues despite the challenging environment faced by the global drilling industry due to the rapid collapse in the commodity prices. However our earnings were adversely impacted by foreign exchange losses and by our ongoing investment in India, where we have the only fleet of modern CBM-tailored rigs and we are at the forefront of developments in the CBM industry. We are delighted that Essar Oil Limited recently remobilised two of our rigs in India for drilling in the Raniganj block, which vindicates our commitment to the India market.
In response to limited drilling opportunities in the first half of 2016, we have been taking steps to reduce the fixed cost elements of our business and we are delighted to have procured a US$5 million working capital facility, as announced on 31 March 2016. We are encouraged by the increasing attention in the CBM markets on the benefits of lateral wells, where Greka Drilling is a pioneer with our LiFaBriC technology, and for which we anticipate significant business when the drilling market recovers.”
For further information on Greka Drilling, please refer to the Company’s website at www.grekadrilling.com or contact:
James Henderson / Rollo Crichton-Stuart
+44 (0)20 3772 2500
Dr Azhic Basirov / David Jones / Ben Jeynes
Nominated Adviser and Broker
Smith & Williamson
+44 (0)20 7131 4000