Greka Drilling secures new contract from Essar Oil

AIM-listed unconventional oil and gas driller Greka Drilling announced a new contract to provide drilling services to Essar Oil on the Raniganj East Block in West Bengal, India.

Greka drilled wells for Essar in late 2013 and this contract was concluded in 2015, with a total of 16 wells drilled.

Under the new contract, Greka will provide two of its semi-automated GD75 rigs, already situated within the country, to drill vertical and directional wells on a day-rate basis – as opposed to other current contracts where the company is paid on a metres drilled basis – for the development of Essar's Raniganj East coal bed methane block.

Greka said the one-year contract has an estimated value of around $8m (£5.5m).

The commencement of drilling operations remains subject to the completion of pre-mobilisation requirements which are currently expected to be complete by end of this quarter.

Chairman Randeep S. Grewal said: “The decision by Essar to re-contract Greka Drilling for the Raniganj East project is affirmation of the quality of our technologically advanced GD75 rigs and experienced crews in India.

“While we still expect relatively limited activity in H1 2016, we welcome the prospect of new drilling for Essar and further drilling for Green Dragon Gas during the course of the year.”

At 0916 GMT, Greka shares were up 0.5% to 3.55p.