Asia-focused Greka Drilling Limited's (LON:GDL) speciality is unconventional or coal bed methane gas wells.
The AIM-listed group recently completed its fiftieth well in a CBM gas campaign for Essar Oil in India with no time lost for injuries or accidents throughout the programme.
The latest well was part of a contract that so far has seen 33 directional wells and 1 vertical well drilled.
Greka drilled 16 wells in a previous campaign and has now drilled almost 60,000 metres for Essar in India, including drilled 39,724 metres continuously in the Raniganj block, West Bengal during the latest campaign.
Essar is the largest producer of CBM in India and Greka Drilling the largest CBM driller.
Randeep Grewal, Greka’s chief executive, said completing 50 wells for Essar was a momentous occasion for Greka and reaffirmed its position as a market leader in CBM drilling.
“Development of unconventional gas resources has become an important value proposition for operators pursuing alternatives to oil.”
State-owned ONGC goes with Greka
The benefits of that work for Essar in India became apparent in April as it was chosen ahead of 16 other contractors for a 73 well programme for state-owned energy group ONGC.
Once finalised and signed, the mobilisation of one of the AIM-listed firm’s semi-automated GD75 rigs is expected within 90 days.
Assuming everything goes ahead as planned, Greka will provide drilling and mud services at ONGC’s Bokaro coal bed methane (CBM) asset.
The Asia-focused oil and gas driller estimates the contract will generate around US$15mln in revenues over the three year period.
“While the company has already demonstrated its expertise in India for its existing client, Essar Oil Limited, the winning of the ONGC tender against 16 other well established drilling contractors is a confirmation of Greka Drilling's mastery within the CBM niche,” said Grewal.
So what is Greka Drilling?
Greka used to be part of Green Dragon Gas, which is still the biggest user of its services, and was separated out in 2011.
The firm is a specialist uncoventional or tight gas gas driller and developed the LiFaBriC (Lined Faulted Brittle Coal) methodology specifically for the complex geology in China.
This is an adaptation of the horizontal drilling traditionally used for drilling in coal seam reservoirs.
It is not only extremely efficient but is also an environmentally friendly technique which removes the need for controversial fracking methods.
Essar is a leading producer of coal bed methane gas in India, which has significant resources of shallow onshore gas, and the government is keen to develop its domestic gas resources as a clean fuel.
Pushing ahead despite challenges
In China, the group said it continues to look for third party drilling opportunities, particularly for PetroChina Huabei, a leading state-owned developer of coal bed methane.
"The Government of China remains supportive of the coal bed methane industry and we see an increasing focus on drilling lateral wells and as such, we continue to be positive about the medium and long term prospects in China," added Grewal.
Shares in London currently stand around the 4.18p mark having shot up 50% on news of the ONGC contract.