Green Dragon Gas has confirmed it has awarded a contract to Greka Drilling for 30 new wells on the Shizhuang South production block (GSS) in China.

The unconventional gas specialist, which is Greka’s former parent, said the US$45mln contract will be funded from the proceeds of its recent US$88mln bond issue.

Randeep Grewal, Green Dragon’s chairman, said the order “builds on the significant progress made with our partners Cnooc/Cucbm and Cnpc/PetroChina, both operationally and through the establishment of joint management committees.”

An operational update will be released on 26 January, Grewal added.

Cantor said that with the operational update due at the end of January, it retains its 'buy' recommendation and 885p target price.