Deutsche Rohstoff - High operational leverage to provide benefit
Deutsche Rohstoff’s (DRAG’s) flexible business model has enabled it to rise out of the 2020 downturn with cash, including marketable securities, of €22.8m and cheaply purchased undeveloped acreage (in June 2020) offering potential for up to 100 wells. Production could increase by up to 50% during FY21 (based on the top end of management guidance) and EBITDA could almost double, based on an oil price of $60/bbl. DRAG expects to invest up to $60m in FY21 to build up additional production, including c $45m in drilling 12 horizontal wells (2.25 miles in length), which should commence production in Q421, and therefore production is expected to increase further in FY22. We are encouraged by Q1 results (reported today), which show DRAG is comfortably on track to meet its full year guidance.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.
Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.
.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.