Deutsche Rohstoff AG: Salt Creek closing marks successful completion of 2023
- Cash inflow of EUR 44 million from the sale of Utah assets
- Consolidated net income expected to surpass last year's EUR 66 million
- Bright Rock drilling program started with 3 wells in December
Deutsche Rohstoff AG (WKN A0XYG7/ISIN DE000A0XYG76) today announced the successful closing of the divestment of all Utah assets by its 100% subsidiary Salt Creek Oil & Gas. The sale has led to a cash inflow of approximately EUR 44 million. Salt Creek Oil & Gas was advised by Ten Oaks Energy Advisors.
The assets in Utah were acquired by Deutsche Rohstoff's portfolio company Bright Rock Energy since 2018. In total around EUR 17 million were invested, which including the divestment has led to a total return of around EUR 65 million in the past years.
At the same time, operational development in the US is continuing as planned. Deutsche Rohstoff already reported in November that the significant shift of the operational focus to Wyoming has been very successful. In the last 14 months, 28 wells have been developed and started production, 23 of them in the Niobrara formation and five in the Turner formation. 21 of the 28 wells are part of the joint venture with Oxy. On average the production volumes of the wells are above expectations.
Bright Rock Energy commenced its drilling program with three wells in early December. The first 3.5 kilometers have been successfully drilled. Two of these wells target the Niobrara formation, building on the success of the "Buster" well. Additionally, a first well will be drilled into the deeper Mowry formation. These wells, with an average working interest of about 75%, are anticipated to start production in the summer of 2024.
Operations at 1876 Resources are progressing as planned, with the completion of the last two wells from the 2023 drilling program expected in early January.
For the upcoming year, investments totalling around EUR 110 million are planned. Bright Rock's wells increase the number of wells scheduled to start production in 2024 to 15. Deutsche Rohstoff AG and its subsidiaries will decide on additional wells in the first half of 2024.
Jan-Philipp Weitz, CEO: "With the closing of this transaction, we are confident that 2023 will be another record year for Deutsche Rohstoff AG, following a successful 2022. This applies to production volumes, sales, EBITDA and net profit. We have demonstrated our ability to operate profitably while continuing to grow. Furthermore, despite investments of EUR 175 million in 2023, the Utah transaction has helped us maintain a nearly balanced operating cash flow and investing cash flow. We are therefore in a very strong financial position and ready to continue our successful development in 2024."
Mannheim, December 21, 2023
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