12 horizontal wells planned/Low upfront payment and high flexibility
Heidelberg/Denver. Cub Creek Energy (CCE), oil and gas subsidiary of Deutsche Rohstoff AG, acquired acreage within the core area of the Wattenberg field in Colorado/USA.
The company has initiated the permitting of twelve horizontal wells on the acquired acreage to facilitate development with a surface drilling location already having been contractually secured. CCE intends to obtain the necessary 3D seismic data within the next several months to assist with horizontal well planning. CCE made a one-time payment of USD 700,000 to secure the acreage and intends to drill and complete these wells as controlling operator.
Based on company technical analyses the CCE management team expects the acquired acreage to have attractive economics. At current cost levels the company’s break even commodity price to continue operating drilling activity in Wattenberg Field is 40USD/bbl WTI. Mangement expects that due to the sharp decline in oil prices over the past months a further increase in development cost efficiencies will be achievable further optimizing the company’s development economics
Bob Gardner, CEO of Cub Creek, commented: “The DJ Basin and Wattenberg Field collectively are well understood technically and economically by CCE and is currently one of the most economically robust oil fields within the U.S. capable of generating strong returns even at lower prices. We are very pleased to have found, and due to lower oil prices will continue to pursue, acquisition opportunities for economically attractive development. The current market environment will facilitate our ability to acquire acreage at reasonable valuations and is a significant part of the company’s development strategy.”
Thomas Gutschlag, CEO of Deutsche Rohstoff, said: “The acquisition of Cub Creek fits very well with our strategy. We want to acquire areas that promise good returns even at much lower oil prices and that come with very low to minimum financial obligations at the same time. Actual start of drilling will be fully aligned with oil price development.”
Cub Creek Energy was founded as successor of Tekton Energy in June 2014, with its headquarters in Denver, Colorado. Deutsche Rohstoff currently holds a stake of 74%. Tekton Energy (now Elster Oil & Gas), which was founded by Deutsche Rohstoff in 2011, sold their main assets in the same field, only a few miles further north, for USD 200 million in May 2014. Elster still holds about 50% interest in an area (approximately 700 acres) called Magpie, which is also located close to the areas now acquired.
Heidelberg, 12 January 2015
Deutsche Rohstoff AG
Dr. Thomas Gutschlag
Tel. +49 6221 871 000