A slowdown in the production of coalbed methane (CBM) has hit the finances of one of the largest CBM producers in China; Greka Drilling.
Greka said that revenue for H1 2014 fell to US$ 8.9 million – leading to losses before tax of US$ 4.3 million.
The company blamed a lack of production and activity at its CBM projects for the downturn, explaining that it only drilled 19 CBM wells in H1 2014 compared to the same period in 2013 – a 27% reduction.
Yet the company remained optimistic for the future.
Randeep Grewal, chairman and chief executive of Greka Drilling, commented: "Whilst mobilisation orders have been slower than anticipated, the company is pleased that we have seen forward momentum on two of our main contracts.”
"The US$ 65 million contract for Essar Oil in India is now underway and the first two rigs are ready to spud the first wells shortly. Additionally, the first two LiFaBriC wells for Green Dragon Gas were completed and we have recently been mobilized to finish the balance eight of the ten LiFaBriC well programme in China. As such, we look forward to these revenues becoming visible within the next reporting period,” Grewal added.
The chairman also explained that Greka Drilling maintains a healthy backlog of business on both contracts that have been recently mobilised and those that still remain to be given mobilsation orders. We are also pleased to have increased our counter parties year on year and continue to remain in dialogue with numerous potential business opportunities.
"Importantly, we have further demonstrated our drilling efficiency with a 620 m vertical well being drilled in 5.2 days and were proud to break our own records by drilling two 8½ in. sections of 506 m and 529 m respectively, each in 24 hours. Such operational improvements allow us to operate at a lower cost and which is in turn passed onto our clients," Grewal concluded.
Adapted from press release by Sam Dodson
Read the article online at: https://www.worldcoal.com/cbm/26092014/greka-drilling-announces-weaker-h1-2014-results-cbm117/