Greka Drilling Regulatory News (GDL)

28 June 2011

Greka Drilling Limited

("Greka Drilling" or "the Company")

First of 25 Rigs Accepted on Schedule

Greka Drilling Limited (AIM:GDL), the largest independent and specialised unconventional gas driller in China, announces the acceptance of the first rig on schedule from its order of an additional 25 specialised Coal Bed Methane ("CBM") drilling rigs. Shipping is expected in the second week of July following some minor specification enhancements that have been requested by Greka's own engineers who are on site in Italy at the place of manufacture.

The first rig is expected to be commissioned on site in China in September this year, followed by the delivery of an additional 4 rigs every month from October until the initial order of 25 is complete by March next year. This will increase the Greka Drilling fleet from 7 to 32 rigs. The fleet itself will:

·; be largely dedicated to production drilling at Shizhuang South (GSS) in Shanxi Province, China, through a recently awarded contract from Green Dragon Gas (AIM:GDG) to drill in excess of 100 wells (vertical and horizontal) in the initial phase;

·; employ environmentally friendly SIS drilling methodology which does not involve the wells being fractured. The biodegradable drilling mud and lack of fracturing ensures no chemical intrusion which allows our customers, including GDG, to produce clean water during the desorption stage;

·; improve utilisation rates through improved drilling methodology which reduces the size of the rig team from 6 people to 2 people per shift, as well as reducing the time taken to drill a 1.5km well from in excess of 70 days in the initial research and development phase to 30 days;

·; be connected digitally to the Company's operational control centre, thereby centrally locating the Company's senior engineering staff in one location as further blocks are developed concurrently; and

·; enable the Company to engage in lucrative third party contracts with companies already producing unconventional gas in China who are looking to Greka Drilling for the use of its innovative drilling methodology.

The contract contains an option for an additional 125 rigs and provides the flexibility to order larger capacity rigs at the discretion of Greka Drilling.

Randeep Grewal, Chairman and Chief Executive of Greka Drilling, commented:

"Greka Drilling is delighted that the first of 25 rigs has now been accepted on schedule and, as an engineer, I look forward to seeing this new technology being set to work in the field. The Company is committed to its exponential growth strategy and these new rigs enable us to increase our drilling capacity for unconventional gas safely, quickly and in tandem with China's demand as it moves from dependency on coal to gas. These rigs represent a game changer in China both environmentally and technically. As we demonstrate this paradigm shift in technology and drilling efficiency, we will have the capacity to accept contracts from additional customers beyond GDG. We have experienced significant demand for our SIS drilling services and to capture this opportunity, we are increasing levels of automation as well as increasing headcount by over 1,000 in just nine months. We will evaluate further expansion early in the first quarter of 2012 following our current exponential growth phase to support increased market demand."

For further information on Greka Drilling and pictures of the first new rig from this order, please refer to the Company's website at www.grekadrilling.com or contact: