LONDON (Alliance News) - China and India-focused gas drilling services firm Greka Drilling Ltd on Tuesday reported a wider pretax loss for the first half of 2016 following a slump in revenue as it struggles against weak activity levels in the oil and gas market.
Greka said it made a pretax loss of USD5.5 million in the half-year to the end of June, compared to USD4.8 million a year before, as a substantial fall in costs offset revenue declining 78% to USD2.6 million from USD11.9 million.
Greka said, in line with the guidance it gave earlier in the year, activity levels were "very limited" in the first half. It drilled a total of 10 wells in the first half, compared to 28 in the comparable period in 2015.
"We have previously advised that we expected this year to be very challenging while the oil and gas operators realign their portfolios to the new oil price environment. Unconventional drilling, the company's niche, has been largely suspended by most of the operators," said Chairman and Chief Executive Randeep Grewal.
"During this period, we continued to take steps to reduce costs, improve our drilling efficiency and diversify our services and customer base. Indeed, this year we expect to have an equal client base between China and India," he added.
Looking to the second half, the company expects to drill 30 wells, with two rigs deployed, for India's Essar Oil Ltd. In China, Greka said it remains well-positioned to bid to carry out work on behalf of Green Dragon Gas, which has started mobilising for a drilling programme of up to eight wells.
Greka shares were down 21% at 2.37 pence on Tuesday morning, one of the worst performers in the AIM All-Share.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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