Deutsche Rohstoff - Focusing on investment opportunities
Deutsche Rohstoff (DRAG) had expected a strong increase in production in 2020 and 2021 from the Olander pad, which started at end December 2020, and the Knight wells planned for H220. However, in response to the current low oil price environment DRAG’s management has adjusted its strategy and reduced costs and production. It has also shifted its strategy to focus on investment opportunities generated by the current low market, allocating up to $25m to purchase assets deemed to be undervalued in the current crisis. This strategic flexibility is possible due to DRAG’s liquidity and strong balance sheet. Management guides to FY20 sales of €33–37m and EBITDA of c €15m, mainly due to significantly reduced production for the year and lower realised oil prices.Deutsche Rohstoff AG is a Germany-based holding company. Its activities are diversified into three business segments. The Gold and Silver is engaged in extraction of those two materials mainly in Australia. Nevertheless, In September 2014, the Company sold all its shares in Wolfram Camp Mining and Tropical Metals. Moreover it also obtains silver in Germany, from which the Company makes coins. The Oil and Gas business segments is handled through its subsidiary Rhein Petroleum GmbH, Tekton Energy LLC and Salt Creek Oil & Gas LLC, and is focused on the exploration and production of oil and natural gas in Germany and the United States. The High-Tech Metals business segment is engaged in extraction and supply of materials used for production of LEDs (Light Emitting Diodes), flat panel displays, solar cells, hybrid cars and medical indispensable, such as indium, gallium, cobalt and tin. The Company operates subsidiaries in the United States, Australia, Germany and Canada.
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