Deutsche Rohstoff: Placement of a new bond with an annual coupon of 5.625%

Deutsche Rohstoff AG

Deutsche Rohstoff: Placement of a new bond with an annual coupon of 5.625%

Deutsche Rohstoff AG

Attractive swap offer for existing bond at 104 % of nominal value

Heidelberg. Deutsche Rohstoff AG announced today that it will issue a new corporate bond (WKN A2AA05, ISIN DE000A2AA055) from 30 June to 18 July 2016 with a volume of up to EUR 75 million. The bond prospectus was approved today by the Federal Financial Supervisory Authority (BaFin) and is now available for download on the company’s website ( ICF Bank AG in Frankfurt will act as sole bookrunner of the transaction.

The new 2016/2021 bond has a five-year term, maturing in July 2021. The interest rate of 5.625 % per year will be paid semi-annually. The 2016/2021 bond will be made available to investors through a public offer in Germany as well as private placement for institutional investors in Germany and several other European countries. Owners of the 2013/2018 bond (WKN A1R07G; ISIN DE000A1R07G4) will receive a swap offer invitation over the next days. They will be offered the possibility to swap every EUR 1,000 nominal value of the 2013/2018 bond for the same amount of the new 2016/2021 bond. In addition, they will receive a cash payment of EUR 40 for every EUR 1,000 nominal value, resulting in an effective exchange rate of 104 %.

Thomas Gutschlag, CEO of Deutsche Rohstoff, commented: „After the success of our first bond, we are happy to make another interesting offer to our investors. The new bond will yield high and stable interest rates to our creditors. We are convinced the new bond will be as well received as our old bond.“

Beginning on 11 July 2016 the company has the option to terminate the old 2013/2018 bond for the first time. It traded at very stable levels during the last three years averaging about 106 % of its nominal value. In September 2014 and February 2015 Deutsche Rohstoff already bought back 2013/2018 bonds at a nominal value of approximately EUR 11.2 million through a voluntary buyback program.

Deutsche Rohstoff plans to use the cash and cash equivalents available (potentially after repayment of the bond 2013/2018), which amounted to EUR 83 million as of December 31, 2015, to finance mainly oil and gas wells in the Wattenberg field near Denver, Colorado, USA. As from September 2015, oil and gas production occurs from five horizontal wells, which paid back approximately 35 % of their initial capital expenditure in the first three months of production. Since the end of March 2016 a new drilling campaign is under way consisting of 25 planned wells. All of these are anticipated to enter oil and gas production between August and October 2016.

Given their geological risk, the currently drilled wells are not categorized as exploration wells, but as development wells in the established Wattenberg oil and gas field. Due to the high level of development activity and initial drilled wells, one of the most renowned US reserve evaluation companies was able to confirm proved reserves of 10 million barrel of oil equivalent and probable reserves totaling 12.5 million barrel of oil equivalent. The expected total revenue amounts to USD 325 million for the proved reserves and USD 410 million for the probable reserves, based on the oil and gas forward price curve as of 30 April 2016. Net earnings (revenue minus shares of partners, royalties, development and operational costs as well as severance tax) ought to add up to USD 127 million (proved reserves) respectively USD 155 million (probable reserves). The net present value of the reserves (discount factor 10 %) is USD 55 million for proved reserves and USD 62 million for probable reserves.

At present, Deutsche Rohstoff benefits from sharply reduced development costs per well. They are currently estimated to be in the range of USD 2.5 million. In 2014, completion cost of a comparable well amounted to USD 4 million. Moreover, Deutsche Rohstoff has the opportunity to claim its tax credits, received in 2014, for a portion of the development costs of the current wells. These amount to approximately 23% of the total drilling costs.

With the 2013/2018 bond Deutsche Rohstoff was able to successfully fund a drilling program of about 20 horizontal wells in 2013 and 2014. In May 2014, the company sold the main assets in the USA for a cash payment of USD 200 million and additional acreage valued at USD 30 million. Deutsche Rohstoff’s current activities are only few miles away from the acreage sold in 2014.

According to regulations of the German Stock Exchange, trading of the bond 2013/2018 will be suspended from the time of issuance of this release until the end of the following trading day. This is a standard measure.

Heidelberg, 28 June 2016


Deutsche Rohstoff identifies, develops and divests attractive resource projects in North America, Australia and Europe. The focus is on the development of oil and gas opportunities within the United States. Metals, such as gold, copper, rare earth elements, tungsten and tin complete our portfolio. For more information please visit