Deutsche Rohstoff - Production to increase by early 2021
Deutsche Rohstoff (DRAG) was quick to react to the COVID-19 pandemic, in cutting production from its operated Cub Creek Olander pad in mid-March 2020. This had been brought online at end 2019 and was producing c 6,000bbl/d when DRAG decided to halt production. It enabled DRAG to avoid selling oil production at historical uneconomic low oil prices and manage remaining production with its hedged portfolio. Revenues in H120 of €26.1m included €10.1m from hedging income. As oil prices are recovering from the March/April lows, management expects to restart production, beginning with Cub Creek legacy pads. This strategic flexibility is possible due to DRAG’s liquidity and healthy balance sheet. Management guides to FY20e sales at the higher end of €33–37m and EBITDA of c €15–18m, mainly due to the recent recovery and stabilisation of oil prices in the US.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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