11th Jun 2014 08:57
LONDON (Alliance News) - Greka Drilling Ltd Wednesday said pretax profit fell significantly in 2013 as revenues almost halved after a major client reduced its drilling programme during the year.
The specialised, unconventional oil-and-gas driller focused on China, said its pretax profit fell 69% to USD1.1 million from USD3.5 million the previous year, as revenues fell to USD30.5 million from USD60.9 million.
The company's figures were hit by its major client, Green Dragon Gas Ltd, reducing its drilling programme in 2013, meaning that Greka only drilled 50 wells during the year, rather than 90 wells during 2012.
Greka Drilling, Green Dragon Gas and Greka Engineering & Technology Ltd are all part of the Greka Group
In order to combat the reduction, Greka focused on expanding its client base by starting a range of deals with new Chinese companies and opening out into India with a 100 well contract with Essar Oil Ltd totalling USD65 million.
The firm said that, not including the reduction in its mobilisation orders during 2013, its workload had a gross margin of 28%, and it has reduced its operating and carrying costs.
The company remains confident of the year ahead, saying that its strong backlog of USD97 million in contracted work at year end and mobilisation orders means that it expects growth in both China and particularly India, where it looks to further expand.
It said total assets increased by 15% to USD130.6 million, and its cash and bank deposits at the end of December were USD16.1 million.
Greka Drilling shares were up 13% to 11.82 pence, putting it in the top five AIM ALL-Share risers on Wednesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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