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Greka Drilling (GDL) – cheaper drillers on the global stage but an opportunity?

13/11/2014 · Greka Drilling (GDL) 

The latest broker coverage appears to have boosted the share price of Greka Drilling (GDL), who are apparently one of the largest independent unconventional gas drillers in Asia – for Asia read mostly China up to now! Despite the claimed expertise of GDL, a quick assessment of the global drilling market reveals a host of excellent, profitable cash generative drillers, operating in the well regulated environment of North America , that look much more appealing at current levels. With only 32 rigs GDL is also hardly a giant! However, with the share price remaining close to lows, the draw of the high growth markets of China and India may attract some to this higher risk play…we aren’t so sure.

GDL’s LiFaBriC technology is specifically designed for Asian geology and provides a sustainable competitive advantage. However, despite the recent customer diversification GDL remains heavily dependent on former parent Green Dragon Gas (GDG).
Out of the current backlog of US$300m GDG represents the largest element and with mobilization underway but delayed who knows when this backlog will play out.

There is significant upside potential but loads of uncertainty with this one!
For a high…

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