- Revenue 2024: New guidance EUR 210 to 230 million
- EBITDA 2024: New guidance EUR 160 to 180 million
- Expansion of 2024 drilling program to EUR 145 to 165 million in investments
- Production of 14,700 to 15,700 BOEPD expected in 2024
Deutsche Rohstoff AG (WKN A0XYG7) is raising its forecast for 2024 due to the strong development of the WTI oil price, the decision to expand the subsidiaries’ existing drilling program in the near future in response to the positive developments, strong production in the first quarter and an expanded oil price hedge.
New guidance 2024
Base scenario:
- Revenue 2024: EUR 210 to 230 million (previously: EUR 175 to 195 million)
- EBITDA 2024: EUR 160 to 180 million (previously: EUR 130 to 145 million)
- Assumptions 2024: Oil price WTI 75 USD/BBL, gas price 2.0 USD/MMBtu, 1.12 EUR/USD. The assumptions are unchanged from the last guidance except for the reduction in the gas price from USD 3.0 to USD 2.0/MMBtu.
Increased price scenario:
- Revenue 2024: EUR 235 to 255 million (previously: EUR 190 to 210 million)
- EBITDA 2024: EUR 180 to 200 million (previously: EUR 150 to 165 million)
- Assumptions 2024: Oil price WTI 85 USD/BBL, gas price 3.0 USD/MMBtu, 1.12 EUR/USD.
Notes:
The increase in the forecast is the result of the positive development of the current market environment, the associated expansion of investments in the US in 2024 and continued very strong production.
The oil price recently rose significantly to USD 85, resulting in increased sales in the first quarter. In addition, the high prices were used to significantly expand the Group’s hedge book once again. As of today, over 1.8 million barrels of oil for the remainder of 2024 and 2025 have been hedged at a price of around USD 75.
The previous planning assumed that in 2024, in addition to 10 wells in the joint venture with Occidental, 2 to 3 wells would be drilled at 1876 Resources and 3 wells at Bright Rock Energy. Due to the high prices, it has now been decided to expand the drilling program at 1876 to 8 to 10 new wells with an average working interest of ca. 70%. The wells are to be drilled from three different pads.
The first two wells drilled last year by 1876 Resources were already able to start production in January, while the 10 wells drilled by Salt Creek as part of the joint venture with Occidental have started production in recent days. The three Bright Rock wells started in December 2023 are expected to be completed earlier than expected starting late April.
Overall, the Group’s production in the first quarter was well above expectations. The wells that have been producing since the end of 2023 were able to maintain their high production levels. Overall, production in the first quarter was 14% higher than planned. This development and the successful completion of the first well are an important confirmation that the relocation of operating activities to Wyoming implemented in the previous year continues to deliver very good results.
Deutsche Rohstoff now expects production of 14,700 to 15,700 barrels of oil equivalent per day (BOEPD) for the year as a whole. This means that production will once again be around 20% higher than the previous year’s figure of around 12,700 BOEPD.
The investment volume will amount to around EUR 145 to 165 million (previously around EUR 110 million). The majority of this will be invested in new wells.
Jan-Philipp Weitz, CEO, said: “Our forecast for 2024 published today once again marks a milestone in our strong development in recent years. For the first time, we expect sales well above EUR 200 million. We have increased our production by around 60% since 2022. This rapid growth is the result of high investments in 2022 and 2023, which were necessary to broaden our operational base, successfully master the transition of our activities to Wyoming and demonstrate that we can operate highly profitably on a sustainable basis.”
Henning Döring, CFO, said: “The expansion of the drilling program at 1876 Resources provides us with the opportunity to realize additional efficiencies and further reduce CAPEX per well. This strengthens our potential for an attractive free cash flow.”
For the definition of EBITDA, please refer to the website of Deutsche Rohstoff AG at https://rohstoff.de/en/apm/.