Half-year Report

27 September 2017

Greka Drilling Limited

("Greka Drilling" or the "Company")

Interim Results 2017

Greka Drilling Limited (AIM: GDL), the largest independent and specialised unconventional gas driller in Asia, is pleased to announce its unaudited results for the six months ended 30 June 2017.

FINANCIAL HIGHLIGHTS

l Revenue of US$3.6 million (H1 2016: US$2.6 million), an increase of 38%

l Loss of US$1.4 million (H1 2016: loss of US$5.5 million)

l US$2.7 million of cash (restricted) as at 30 June 2017

OPERATIONAL HIGHLIGHTS

l 12 wells were drilled in the first 6 months this year compared to 10 wells in the same period last year, of which:

o 5 wells drilled in China (PetroChina - 3; Green Dragon Gas -1; other - 1), compared with 3 wells drilled in H1 2016 (all for Green Dragon Gas)

o 7 wells drilled in India for Essar (2016 H1: 7 wells, all for Essar)

l A total of 15,625 metres were drilled, compared to 12,458 metres in the same period last year, an increase of 25%, of which:

o 7,964 metres were drilled in China (H1 2016: 4,128 metres)

o 7,661 metres were drilled in India (H1 2016: 8,330 metres)

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

"I am very pleased to report a well-balanced performance in China and India. Our well-executed dual country strategy has been successfully implemented. The contracted services from both countries' state-owned enterprises CNPC and ONGC are recognition of the niche CBM drilling expertise and technology within Greka Drilling. The foundation is in place to expand from in years to come."

For more information on Greka Drilling, please visit the Company's website at www.grekadrilling.com or contact:

CHAIRMAN'S STATEMENT

We are very pleased to see that the service sector in China and India has turned the corner following three years of stagnation. Both governments' steadfast support for the development of CBM resources is the catalyst to enable the revitalisation of the sector of which Greka Drilling stands to be a natural beneficiary as the only CBM drilling specialist in both jurisdictions.

During the six months under review, the Company made progress in several areas including attaining more drilling contracts, improving performance and efficiency. As a result, I am pleased to report H1 revenue increased 28% to US$3.6 million and losses decreased to US$1.4 million, a 75% reduction compared to the same period of last year with gross margin rising to 19%.

The Company spud the first well for PetroChina Huabei in February under the 5 horizontal wells drilling contract with a value of US$2 million signed in November 2016. To date, five wells have been successfully completed, while an additional sixth is currently being drilled. The client's satisfaction with our advanced rig technology and experienced crews, was well demonstrated by two new drilling contracts this year. These two drilling contracts have an aggregate value of at least US$2 million.

Furthermore, in India, in addition to the completed 7 wells for Essar, the Company has been awarded a Letter of Award (LOA) for a three-year drilling contract by Oil & Natural Gas Corporation Limited ("ONGC"). Under this contract, the Company will drill 73 wells over the next three years using our state-of-the-art rig which has a proven track record of drilling in similar geological conditions. The project, which remains subject to contract and to the issue of a performance bond, will entail the provision of drilling and mud services along with the provision of associated equipment and is estimated to generate total revenues of US$15 million over the three-year period. We expect to spud the first well prior to year-end.

Among the significant number of state-owned drilling companies, Greka Drilling stands out as the only independent foreign drilling contractor sustainably providing services within the CBM sector in China and India to the state-owned CNPC and ONGC. The contracted drilling services are recognition of the niche drilling expertise within the Company.

I look forward to providing further updates of the Company's continued progress.

Randeep S. Grewal

Chairman

26 September 2017

CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF

FINANCIAL POSITION

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF

CASH FLOWS

NOTES TO CONSOLIDATED

INTERIM FINANCIAL STATEMENTS

1. GENERAL INFORMATION

The consolidated unaudited interim financial information set out in this report is based on the consolidated financial statements of Greka Drilling and its subsidiary companies (together referred to as the "Group").

2. ACCOUNTING POLICIES

The condensed consolidated financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2016, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union except for IAS 34. The financial statements of the Group for the 6 months ended 30 June 2017 were approved and authorized for issue by the Audit Committee and the Board on 26 September 2017.

The interim financial statements have been prepared in accordance with the accounting policies that are consistent with the December 2016 financial statements and the same policies are expected to apply for the year ended 31 December 2017. The financial information for the six months to 30 June 2017 does not constitute audited accounts of the Company or the Group. The comparative financial information for the year ended 31 December 2016 in this interim report does not constitute statutory accounts for that year. The auditors' report on those accounts was unqualified and did not draw attention to any matters by way of emphasis.

Basis of preparation

After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly consolidated financial statements.

The consolidated financial information is presented in United States dollars and all values are rounded to the nearest thousand dollars (US$'000) except when otherwise indicated.

The consolidated financial information has been prepared in accordance with the requirements of the AIM Rules for Companies and in accordance with IFRS as adopted by the European Union. The consolidated financial information has been prepared using the accounting policies which will be applied in the Group's financial statements for the year ended 31 December 2017.

The preparation of consolidated financial information in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group's accounting policies. The areas involving a higher degree of judgment or complexity or areas where assumptions and estimates are significant to the financial information are disclosed in note 2 to the financial information in the 31 December 2016 annual report. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision only affects that period or in the period of revision and future periods if the revision affects both current and future periods.

3. REVENUE AND SEGMENTAL INFORMATION

The Group determines its operating segment based on the reports reviewed by the chief operating decision-makers ("CODMs") that are used to make strategic decisions.

The Group reports its operations as two reportable segments: the provision of contract drilling services in the PRC and India. The division of contract drilling operations into two reportable segments is attributable to how the CODMs manage the business. Intercompany eliminations and corporate balances are included in the "other" column.

Drilling services revenue and management services revenue represent the net invoiced value of contracted drilling services and management services provided to two major customers, one in the PRC (who is a related party) and the other in India.

4. FINANCE INCOME

5. FINANCE COSTS

6. TAXATION

Taxation for the Group's operations in the PRC is provided at the applicable current tax rate of 25% on the estimated assessable profits for the period. Taxation for operations in India is taxed at 4.326% of gross revenue.

7. EARNINGS PER SHARE

Warrants were outstanding at the end of the period that could potentially dilute basic earnings per share in the future. However, due to losses incurred during the current period, the impact of these share incentives would not be dilutive.

8. PROPERTY, PLANT AND EQUIPMENT

During the period, the Group incurred US$336,740 on additions to plant and equipment (31 December 2016 - US$318,000).

9. DEFERRED TAXATION

The Group has not offset deferred tax assets and liabilities across different jurisdictions. Cayman Island losses of US$689,016 (2016: US$2,120,554) do not expire under current tax legislation. PRC tax losses of US$861,752 (2016: $3,371,620) expire after 5 years.

10. INVENTORIES

11. TRADE AND OTHER RECEIVABLES

12. CASH AND CASH EQUIVALENTS

The restricted bank balance represents deposits placed in financial institutions to secure bills payable of an equivalent amount related to bank loans of US$2,657,062.

13. TRADE AND OTHER PAYABLES

14. LOANS AND BORROWINGS

Promissory notes of US$5 million and US$3 million are repayable to Guaranty Finance Investors, LLC on 31 March 2019 and 30 September 2019 respectively; on initial recognition, financing costs of US$872,000 were deducted from the promissory notes.

15. FINANCIAL LIABILITY

During the year ended 31 December 2016, 35,000,000 and 21,000,000 warrants, at a subscription price of 5 pence per share, were granted to Guaranty Finance Investors LLC as part of the financing agreements entered into in March 2016 and September 2016 respectively. The warrants have an exercise period of 2 years from 1 April 2017 to 31 March 2019 and 30 September 2017 to 30 September 2019 respectively.

16. RELATED PARTY TRANSACTIONS

a. Amounts due from/to related parties and corresponding transactions

The related parties of the Group include companies that are subsidiaries of Green Dragon Gas Ltd, Greka Engineering and Technology Limited and Henan Greka Weino Alcohol Trading Limited. All the related parties are under common management and control of Mr Randeep Grewal, the Company's Chairman & CEO.

As at 30 June 2017, the Group had the following balances due to companies under the common control of Mr Grewal:

§ Net payable to the Green Dragon Gas group of US$9.8m (2016: net payable: US$12.7 million)

§ Net payable to the Greka Engineering and Technology group of US$518,041 (2016: US$206,940)

These balances are unsecured, interest-free and repayable on demand.

Related party transactions during the period comprise:

§ Drilling services provided to the Green Dragon Gas group of US$850,856 (2016: US$1,541,000)

§ Leasing income from the Green Dragon Gas group of US$228,260 (2016: US$327,000), Greka Engineering and Technology group of US$27,422 (2016: US$25,000). The lease term was 1 year from 1 January 2017 to 31 December 2017 and 1 January 2016 to 31 December 2016 respectively.