Deutsche Rohstoff identifies, develops and monetises resource projects in North America, Australia and Europe. The company’s focus is on the development of oil and gas opportunities in the US.
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.