Half Yearly Report

24 September 2014

GREKA DRILLING LIMITED

("Greka Drilling" or the "Company")

 Interim Results 2014

Greka Drilling Limited (AIM: GDL), the largest independent and specialized unconventional gas driller in China, is pleased to announce its results for the six monthsended 30 June 2014.

FINANCIAL HIGHLIGHTS

· Revenue of US$8.9 million (H1 2013: US$14.4 million)

· Gross margin: 27% (H1 2013: 5%)

· US$18.6 million of cash on hand as at 30 June 2014 (US$15.0 million restricted)

OPERATIONAL HIGHLIGHTS

· 19 wells drilled in first half of 2014 versus 26 in the same period in 2013, a 27% reduction

· 21,159m drilled ,versus 36,347m in the same period in 2013, a 42% reduction

· Vertical wells averaged 9.3 days from spud to completion, compared to 25 days in the same period in 2013, a 63% improvement

· Directional wells averaged 11.5 days from spud to completion, compared to 20 days in the same period in 2013, a 43% improvement

· LiFaBriC wells averaged 43.9 days from spud to completion, compared to 61 days in the same period in 2013, a 28% improvement

· Rig GD75-24 established two records for Greka Drilling whilst drilling for Sinopec (BOFA), drilling two 8 ½" sections to depths of 506m and 529m respectively, each in 24 hours

· Fastest Vertical well was drilled to a total depth ("TD") of 620m in 5.2 days (spud to completion)

· Fastest Directional well was drilled to TD of 1,494m in 7.8 days (spud to completion)

· Fastest LiFaBriC well was drilled to TD of 1,230m (total metres drilled - 1,622m) in 40.2 days (spud to completion)

CUSTOMER OVERVIEW

· Six counterparties: Green Dragon Gas, CNPC Huabei, CNPC Jincheng, Sinopec (BOFA), Essar Oil and Guangdong Bureau of Coal Geology

· Mobilization began with 5 GD75 rigs and related tools and equipment have arrived in India to execute the Essar Oil contract

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

"Whilst mobilization 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 program in China. As such, we look forward to these revenues becoming visible within the next reporting period.

Greka Drilling maintains a healthy backlog of business on both contracts that have been recently mobilized 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 620m vertical well being drilled in 5.2 days and were proud to break our own records by drilling two 8 ½" sections of 506m and 529m 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."

For further information on Greka Drilling, please refer to the website at www.grekadrilling.com or contact:

Rollo Crichton-Stuart +44 203 772 2589

Investor Relations

Bell Pottinger

CHAIRMAN'S STATEMENT

We drilled fasterandmore cost efficiently during the period - predominately drilling vertical wells and thus fewer metresper well, setting newdrilling records in the process. We would have liked to have seen mobilization orders on a larger percentage of Greka Drilling's backlog than were received, but clients held back on mobilization orders for a number of factors unassociated with Greka Drilling.

The first half of 2014 was, as a result, a bittersweet period for the Company. The drilling teams did a remarkable job of beating their previous records on drill times, proving the efficiencies our drilling technology can offer clients whilst maintaining the precision required but as mentioned, the Company's clients held back their mobilization orders which resulted in a lower level of activity during the period. In the longer term, the drilling efficiencies achieved will deliver lucrative returns on the US$300 million backlog when these agreements aremobilized. As such, we look forward with much excitement for the future.

The drillingteam from rig GD74-24 deserve to be specifically recognized for their achievements in drilling two vertical wells to depths of over five hundred metres in twenty four hours per well. These results were truly eye opening for our clients, as well as fellow drilling contractors, as evidence of the Company's aptitude and efficiencyand the business is actively articulating these benefits throughout the wider market place.

We are accustomed to a slower first half of the year, with weather conditions typically slowing activity during the period but this was also affected by delayed mobilization orders. Specifically, Green Dragon Gas were focused on finalizing their title related matters which have now been resolved, and our 10 well LiFaBriC programme has restarted. This programme is part of the Company's wider 150 well programme that they have committed to subject to their debt placement.

We would expect a busier second half of the year, considering the currently mobilized rigs to Green Dragon and Essar. In addition to these significant clients, we also expect to be mobilized on the CNPC backlog during the second half of 2014 following their well site construction.

Greka Drilling's management team were challenged to maintain the focus on drilling efficiency, recurrent training, to launch an entirely new operational and management teams in India whilst balancing these goals with financial discipline on a significantly lower revenue base. They did so successfully and are now set to capitalize on the significant opportunity of growing the backlog further while being focused on executing the mobilized workload.

I look forward to updating the shareholders on the progress in India and continued execution in China for multiple clients.

Randeep S. Grewal

Chairman

24 September 2014

Consolidated Statement of Comprehensive Income

 Consolidated Statement of Financial Position

 Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flow

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 2013, 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 2014 were approved and authorized for issue by the Audit Committee and the Board on 22 Sep 2014.

The interim financial statements have been prepared in accordance with the accounting policies that are consistent with the December 2013 financial statements and the same policies are expected to apply for the year ended 31 December 2014. The financial information for the six months to 30 June 2014 does not constitute audited accounts of the Company or the Group. The accounts for the year ended 31 December 2013 were audited and the auditor¡¯s report for the year ended 31 December 2013 was unqualified add did not include any references to any matters to which auditors drew attention by way of emphasis. The comparative figures for the year ended 31 December 2013 have been extracted from audited accounts.

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 this basis of preparation. The basis of preparation describes how the financial information has been prepared in accordance with IFRSs except as described above.

The preparation of consolidated financial information in conformity with IFRSs 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 2013 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 has one reportable segment. The operating results are regularly reviewed by the Group's chief operating decision-makers ("CODMs") that are used to make strategic decisions. 79% of the Group's revenue was derived from one customer.

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.

7. EARNINGS PER SHARE

The Group does not have any potentially dilutive instruments in issue therefore the basic and diluted EPS is the same.

8. PROPERTY, PLANT AND EQUIPMENT

During the period, the Group incurred US$9,493 on additions to plant and equipment (31 December 2013 - US$751,000).

9. DEFERRED TAXATION

The Group has not recognized potential deferred tax assets of US$170,000 (2013: US$160,000) arising on unrecognized losses due to insufficient expected taxable income in the relevant jurisdiction. The Group has not offset deferred tax assets and liabilities across different jurisdictions. Cayman Island losses of US$1,946,540 (2013: US$2,370,000) do not expire under current tax legislation. PRC tax losses of US$1,304,652 (2013: $640,000) 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 trade payables of US$15 million (2013: trade payables of US$1.3 million and bank loans of US$10. 7million).

13. TRADE AND OTHER PAYABLES

14. LOANS AND BORROWINGS

15. RELATED PARTY TRANSACTIONS

(a) Amounts due from/to related parties and corresponding transactions

Saved as disclosed in notes 11, 13 and 14, there were no other related party transactions that are required to be disclosed. Transactions between the company and its subsidiary undertakings, which are related parties, have been eliminated on consolidation and are not disclosed in this note. The related party transactions of the Group with companies under common control were as follows: Amounts due from/to related parties comprise:

(a)Amounts due from/to related parties and corresponding transactions (continued)

Notes:

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

(ii) The balance represent amounts receivable from GBV and ACE for providing drilling service.

(iii) The balance represent amounts payable to GMC for supplying gas dispensers.

(v) The balance represent amounts payable to GTI for providing pre-well services.