2.000 Acres net / Up to 50 horizontal drilling possible
Heidelberg / Denver. Cub Creek Energy (CCE), the oil and gas subsidiary of Deutsche Rohstoff AG in the USA, has signed a joint development agreement with a private oil and gas producer for an area in the core area of the Wattenberg field in Colorado. There are approximately 2.000 acres (8,1 km2) of prospective areas in the northwestern part of the field. Cub Creek will develop these areas as operator. Cub Creek does not make an upfront payment.
The size of the newly acquired leases corresponds to the share of the areas sold successfully in May 2014 around the city of Windsor, on which the Tekton Energy investment of Deutsche Rohstoff had previously drilled numerous holes.
The management of Cub Creek expects to be able to drill up to 50 horizontal wells in the new areas in the next three years. Cub Creek will begin to obtain the relevant permits shortly. Cub Creek had already taken over leases in the vicinity in January, for which up to 12 horizontal wells are currently being prepared. Cub Creek will also develop these areas as an operator.
Thomas Gutschlag, CEO of Deutsche Rohstoff, said: "With this acquisition and the space of our second US subsidiary Elster Oil and Gas, we already have an equally attractive portfolio as the former Tekton Energy. Thanks to the lower oil prices, we were able to secure all land on favorable terms. "
Based on its own technical analyzes, the CCE management expects that the acquired land will be economically attractive from a WTI oil price of around 40 US dollars. The management also assumes that the sharp drop in oil prices in recent months will result in a significant reduction in costs per well.
The second US subsidiary of Deutsche Rohstoff AG, Elster Oil & Gas, will initially co-develop five wells on the so-called Magpie area as a non-operator. These will start at the end of March 2015. The start of further drilling depends to a large extent on the development of the oil price.
Cub Creek Energy, based in Denver, Colorado, was founded in June 2014 as the successor to Tekton Energy. Deutsche Rohstoff currently holds a 74 percent stake. In the same field, just a few miles to the north, Tekton Energy (now Elster Oil and Gas), co-founded by Deutsche Rohstoff in 2011, sold its main assets for USD 2014 million in May 200. Elster still has a 50% share (around 700 acres or 2,83 km2) on an area called Magpie, which is also near the areas now acquired.
Heidelberg, 23. March 2015
