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Smartkarma AI

Smartkarma

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<a href="https://smartkarma.com/entities/deutsche-rohstoff-ag">Deutsche Rohstoff AG</a> is a German-based holding company with a primary focus on the exploration and production of oil and gas in the United States, which constitutes the core of its revenue generation.</li>
 <li>The company exhibits a strong long-term growth trajectory in revenue and net income, however, it is coupled with high volatility and consistently negative free cash flow due to significant capital expenditures in its U.S. oil and gas operations.</li>
 <li>Valuation appears attractive with low multiples compared to peers, but this is balanced by the inherent risks of commodity price fluctuations, declining margins from their 2022 peak, and the capital-intensive nature of its E&amp;P activities.</li>
</ul>This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.


  
Deutsche Rohstoff AG is a German-based holding company with a primary focus on the exploration and production of oil and gas in the United States, which constitutes the core of its revenue generation.
  The company exhibits a strong long-term growth trajectory in revenue and net income, however, it is coupled with high volatility and consistently negative free cash flow due to significant capital expenditures in its U.S. oil and gas operations.
  Valuation appears attractive with low multiples compared to peers, but this is balanced by the inherent risks of commodity price fluctuations, declining margins from their 2022 peak, and the capital-intensive nature of its E&amp;P activities.
This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

Primer: Deutsche Rohstoff AG (DR0 GY) - Oct 2025

Fundamental Analyses, Contrarian Cashflows

Contrarian Cashflows

Fundamental Analyses

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Each week, I’ll share five intriguing investment ideas that recently caught my attention. These ideas are meant to spark your research and help you kickstart the week ahead with fresh insights.Because these ideas are the result of my first-level idea generation process, they require more in depth research. Therefore, the ideas will often be concise, with occasional references to valuable work from other practitioners that I encourage you to explore.If you have something fascinating to share that could benefit me and the wider community, don’t hesitate to send it my way—I’d love to hear from you!

Leading International Investment Research, Edison Investment Research

Edison Investment Research

Leading International Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

Strong production and oil prices led to Deutsche Rohstoff’s (DRAG’s) solid results in H121 with EBITDA up 150% to c €40m (c €16m in H120) and net cash flow generation of c €17m. Management, which is typically conservative, has increased earnings guidance for 2021 and 2022. An extensive $60m drilling programme, comprising 12 wells at Cub Creek’s Knight pad and one well at Bright Rock’s new acreage in Wyoming, is due for completion by end-Q3 with production commencing in Q4.

Strong production and oil prices led to Deutsche Rohstoff’s (DRAG’s) solid results in H121 with EBITDA up 150% to c €40m (c €16m in H120) and net cash flow generation of c €17m. Management, which is typically conservative, has increased earnings guidance for 2021 and 2022. An extensive $60m drilling programme, comprising 12 wells at Cub Creek’s Knight pad and one well at Bright Rock’s new acreage in Wyoming, is due for completion by end-Q3 with production commencing in Q4.

Deutsche Rohstoff - Solid H1 results, strong cash flow generation

Deutsche Rohstoff’s (DRAG’s) flexible business model has enabled it to rise out of the 2020 downturn with cash, including marketable securities, of €22.8m and cheaply purchased undeveloped acreage (in June 2020) offering potential for up to 100 wells. Production could increase by up to 50% during FY21 (based on the top end of management guidance) and EBITDA could almost double, based on an oil price of $60/bbl. DRAG expects to invest up to $60m in FY21 to build up additional production, including c $45m in drilling 12 horizontal wells (2.25 miles in length), which should commence production in Q421, and therefore production is expected to increase further in FY22. We are encouraged by Q1 results (reported today), which show DRAG is comfortably on track to meet its full year guidance.

Deutsche Rohstoff’s (DRAG’s) flexible business model has enabled it to rise out of the 2020 downturn with cash, including marketable securities, of €22.8m and cheaply purchased undeveloped acreage (in June 2020) offering potential for up to 100 wells. Production could increase by up to 50% during FY21 (based on the top end of management guidance) and EBITDA could almost double, based on an oil price of $60/bbl. DRAG expects to invest up to $60m in FY21 to build up additional production, including c $45m in drilling 12 horizontal wells (2.25 miles in length), which should commence production in Q421, and therefore production is expected to increase further in FY22. We are encouraged by Q1 results (reported today), which show DRAG is comfortably on track to meet its full year guidance.

Deutsche Rohstoff - High operational leverage to provide benefit

Deutsche Rohstoff (DRAG) was quick to react to the COVID-19 pandemic, in cutting production from its operated Cub Creek Olander pad in mid-March 2020. This had been brought online at end 2019 and was producing c 6,000bbl/d when DRAG decided to halt production. It enabled DRAG to avoid selling oil production at historical uneconomic low oil prices and manage remaining production with its hedged portfolio. Revenues in H120 of €26.1m included €10.1m from hedging income. As oil prices are recovering from the March/April lows, management expects to restart production, beginning with Cub Creek legacy pads. This strategic flexibility is possible due to DRAG’s liquidity and healthy balance sheet. Management guides to FY20e sales at the higher end of €33–37m and EBITDA of c €15–18m, mainly due to the recent recovery and stabilisation of oil prices in the US.

Deutsche Rohstoff (DRAG) was quick to react to the COVID-19 pandemic, in cutting production from its operated Cub Creek Olander pad in mid-March 2020. This had been brought online at end 2019 and was producing c 6,000bbl/d when DRAG decided to halt production. It enabled DRAG to avoid selling oil production at historical uneconomic low oil prices and manage remaining production with its hedged portfolio. Revenues in H120 of €26.1m included €10.1m from hedging income. As oil prices are recovering from the March/April lows, management expects to restart production, beginning with Cub Creek legacy pads. This strategic flexibility is possible due to DRAG’s liquidity and healthy balance sheet. Management guides to FY20e sales at the higher end of €33–37m and EBITDA of c €15–18m, mainly due to the recent recovery and stabilisation of oil prices in the US.

Deutsche Rohstoff - Production to increase by early 2021

Germany

Deutsche Rohstoff AG is a diversified mining company. The Company develops, mines, and explores natural resource deposits in parts of the world. Deutsche Rohstoff primarily focuses on gold, and oil and gas production.

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Deutsche Rohstoff AG (DR0 GY)

Primer: Deutsche Rohstoff AG (DR0 GY) - Oct 2025

Deutsche Rohstoff AG is a German-based holding company with a primary focus on the exploration and production of oil and gas in the United...

αSK

Monday Delight: 18/08/25

Each week, I’ll share five intriguing investment ideas that recently caught my attention. These ideas are meant to spark your research and help...

Contrarian Cashflows

Deutsche Rohstoff - Solid H1 results, strong cash flow generation

Strong production and oil prices led to Deutsche Rohstoff’s (DRAG’s) solid results in H121 with EBITDA up 150% to c €40m (c €16m in H120) and net...

Edison Investment Research

Deutsche Rohstoff - High operational leverage to provide benefit

Deutsche Rohstoff’s (DRAG’s) flexible business model has enabled it to rise out of the 2020 downturn with cash, including marketable securities, of...

Edison Investment Research

Deutsche Rohstoff - Production to increase by early 2021

Deutsche Rohstoff (DRAG) was quick to react to the COVID-19 pandemic, in cutting production from its operated Cub Creek Olander pad in mid-March...

Edison Investment Research

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