Deutsche Rohstoff AG: Strong increase in year-end oil and gas reserves of Salt Creek Oil & Gas

Deutsche Rohstoff AG: Strong increase in year-end oil and gas reserves of Salt Creek Oil & Gas

Deutsche Rohstoff AG

Proved reserves grow by 141%/Total reserve value of USD 83.9 million

Mannheim/Denver. The present value of the NYMEX reserves (future cash flow discounted at 10%, so-called PV 10) of Salt Creek Energy amounts to USD 83.9 million as of 31 December 2017 (October 2016: USD 50.4 million). Reserve value has therefore grown by 66% reflecting the positive development and well performance of Salt Creek Oil & Gas during 2017.

Proved reserves have grown by 141% to USD 75.0 million (October 2016: USD 31.1 million), probable reserves stand at USD 8.9 million (October 2016: USD 9.9 million). All reserves have been calculated internally by Salt Creek Oil & Gas.

The main reason for the reserves growth is the strong production of almost all wells. The majority of the acquired wells have continued to outperform the acquisition type curve and new wells brought into production by Whiting Petroleum, Hess Oil and other operators have delivered very strong results.

Oil prices used for the reserve calculation were slightly higher in near term years. While the October 2016 reserve report assumed a WTI oil price of USD 51.5 for the initial 5 years of production, the December 2017 strip assumed an average price of USD 54.7 for the next 5 years. Over 20 years the average in October 2016 was at USD 65.14 and on December 2017 was at USD 52,9.

Here is a detailed overview of the reserves:

By volume, reserves have grown from 6.3 million BOE to 9.5 million BOE. Proved reserves have increased to 7.4 million barrels of oil equivalent (BOE) (October 2016: 2.9 million BOE), while probable reserves were at 2.1 million BOE (previous year: probable BOE 1.8 million + possible BOE 1.5 million). Total undiscounted future net revenue (“Future Net Income”) amounts to 191.3 million USD.

Current reserve values are based on 12/31/2017 NYMEX Strip Pricing for Salt Creek Oil & Gas. Proved and Probable Reserves result in the following value:

Reserve Category Revenue
(USD million)
FNI** Undiscounted
(USD million)
FNI** Discounted at 10% (USD million)
Proved developed 114.824 75.579 44.825
Proved undeveloped 173.895 79.819 30.192
Probable 80.792 35.933 8.881

*Natural gas is converted to oil equivalent using a factor of 6,000 cubic feet of natural gas per one barrel of oil equivalent.
**Future Net Income (FNI) is defined as revenues minus partner interest, royalty, development costs, operating costs, and severance tax.


Mannheim, 19 March 2018



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