Mr Rieck, Deutsche Oel & Gas S.A. recently announced that the holding company ECP has committed up to $ 35 million US dollars. Was this step necessary?
The tax credits from the US state of Alaska have always been an important element in the corporate financing of Deutsche Oel & Gas Group. However, payment of the tax credits has repeatedly been modified and delayed due to the state of Alaska’s rapidly decreasing income over the past few years and the tight government budgets. At the moment around 147 million dollars is outstanding. For this reason, we have reviewed different alternatives and have entered into this agreement with ECP.
How would you classify ECP’s commitment?
We see ECP’s commitment as a very positive development because they are familiar with the project and have been participating in the project since 2014. With this additional investment, ECP makes it clear that they are convinced of the Kitchen Lights Unit’s potential for growth and our expertise. The financing for the drilling season 2018 is now fully secured so that we can continue to further develop the Kitchen Lights Unit.
What are the prospects regarding the timetable of the Kitchen Lights Unit?
We are on schedule. We are already producing from two natural gas wells in the Kitchen Lights Unit. As our next step, we are planning to complete the third well KLU#3c and start production from it; we also plan to drill a fourth natural gas well. With these additional two wells, we will be able to increase daily production capacity by 50 to 70%. Additionally, the contract with ENSTAR, Alaska’s largest gas supplier, went into effect as scheduled in April. The total value will reach up to 247 million US dollars by 2022.
What can you say about the listing the company on a European stock exchange?
Due to legal reasons, we are not allowed to disclose the expected listing date. The only thing I can say is that we are currently having intensive and constructive talks with the exchange in Riga. We are currently working on the annual financial statement for 2017, which must formally be submitted to the stock exchange.
What are your thoughts about the future?
During the past several years, we have firmly established ourselves as the second largest private natural gas producer in south-central Alaska and we will continue to expand this position in the future. Thanks to ECP’s financial commitment, we will sustainably increase our natural gas production in the Kitchen Lights Unit. We currently anticipate that we will increase the previous year’s production of 5.7 billion cubic feet by 50%. In the medium term, we are planning to start producing oil, which will lend our company’s growth an entirely different dynamic.