Deutsche Rohstoff : Quarterly Report Q1 2022

OVERVIEW OF THE FIRST QUARTER 2022

The year 2022 has started well for Deutsche Rohstoff. The oil price has continued to move upwards thanks to restricted global supply coupled with rising demand. Since the end of February, this has been accelerated by the uncertainty caused by the war in Ukraine. At its peak, WTI traded at over 120 USD/barrel in March. At the end of the quarter, it was trading at around 100 USD/barrel.

The US gas price Henry Hub also saw a strong upward trend. It traded at USD 3.84/MMBtu at the beginning of the year, but clim- bed to over USD 7/MMBtu by mid-April.

Consolidated net income for the first quarter was EUR 12.8 million (previous year EUR 11.7 million). We generated revenues of EUR 28.1 million in the first three months (previous year: EUR 17.9 million). EBITDA amounted to EUR 25.2 million (previous year: EUR 21.3 million). In contrast to the previous year, the majo- rity of EBITDA is based on the operating result. Sales of securities contributed EUR 3.4 million, including a partial sale of shares in Northern Oil and Gas. At the end of the quarter, our Northern position still amounted to around 435,000 shares. For the full year, we expect sales to jump year-on-year to EUR 130 to 140 million. EBITDA is also expected to be significantly higher than the previ- ous year (EUR 66.1 million) at EUR 110 to 120 million. As things stand today, we will again close the current year with a clearly positive consolidated result.

The good results are also reflected in the balance sheet as of March 31, 2022. The total of cash and cash equivalents, current receivables, and non-current and current securities reached EUR 77.9 million, compared with EUR 63.5 million at the end of

2021. This key figure reflects the renewed high cash inflow in the first quarter. Accordingly, equity also increased to EUR 95.2 mil- lion at the end of the quarter, EUR 15.1 million higher than at year- end 2021, with the equity ratio reaching 32.4 percent compared to 30.2 percent at December 31, 2021.

Cub Creek's important Knight pad has been producing since mid- November. Contrary to the original planning, some work that is usually done after peak production had to be brought forward. For this reason, production did not increase significantly until March. We expect peak production in the 2nd quarter. Net production in the Group in the first quarter was 709,511 barrels of oil equivalent (BOE), or 380,794 barrels of oil (BO).

Our four companies in the U.S. produced an average of 7,883 BOE or 4,231 BO per day in the first quarter. All volume figures repre- sent the Group's net share. We expect a significant increase in daily production in the coming quarters. For the full year, we ex- pect 9,300 to 10,000 BOEPD. The oil price realized after deducting hedging losses (approx. USD 23.63/bbl) and transportation costs (approx. USD 3.70/bbl) was around USD 68.74/bbl.

Cub Creek Energy produced 487,967 BOE (233,567 BO) in the first three months of the year. As expected, the largest share came from Knight wells, which were already producing about 3,500 barrels per day in March.

Elster Oil & Gas produced 75,451 BOE (21,606 BO) through March 31. Production at Elster continues to run very consistently

and is ahead of expectations so far this year.

At Bright Rock Energy and Salt Creek Oil & Gas, first quarter production totaled 146,093 BOE (125,622 BO). A major contributor to this production was the Buster well drilled last year on the new acreage acquired in Wyoming in 2020. The Buster well produced 611 barrels per day in the first quarter. In total, it has produced 106,201 barrels since production commenced in October 2021.

As we did last year, we partially hedged our expected production. At the end of March, we had hedged 600,000 barrels of oil for the remaining months of April to December at an average price of around USD 64/barrel.

In the first quarter, the hedge book generated a loss of EUR 10.5 million due to the rapid and strong price increase. Hedged were 323,200 barrels, which corresponded to 85 percent of actual pro- duction.

The development of oil prices is difficult to predict due to political influences. However, there is much to suggest that prices will re- main at a high level. For our base forecast, we are using rather conservative assumptions of an oil price of 85 USD/barrel for the remainder of 2022, 4 USD/MMBtu for gas and an exchange rate of 1.12 EUR/USD.

In February, we had announced a cooperation with Oxy under which we participate in 18 Oxy wells in Wyoming. In the meanti- me, the first six wells have progressed. We continue to expect

these six wells to start production in the fourth quarter of 2022.

For the first time, we plan to drill wells in Wyoming with Cub Creek in the second half of the year. The Cub Creek team is cur- rently making all necessary preparations. Due to the tight situa- tion regarding the availability of drilling equipment and material, there may be delays in these wells.

SHARE AND BONDS

Our stock gained approximately 43 percent in the first quarter. In March, it reached an all-time high of 31 EUR. Compared with U.S. oil stocks, however, our share still shows significant potential. In recent years, we performed significantly better on a regular basis than comparable U.S. equities.

Our bonds are consistently trading above par. At the beginning of February, we were able to place the 19/24 bond to a volume of EUR 100 million. The convertible bond rose above the strike price for the first time in the course of the first quarter. Two bondhol- ders exercised their conversion rights and together received 9,357 new shares.

GOLD AND OIL PORTFOLIO

A smaller contribution was made in the first quarter by our equity portfolio, which contributed EUR 0.9 million to net income. At the end of March, unrealized gains of around EUR 4.0 million were still

on the books. Since the portfolio was launched in April 2020, we have realized gains of EUR 22.1 million in profits.

We are confident about the further development this year. The current year and also the coming year are characterized by strong growth in terms of production, sales and earnings. Our share port- folio should continue to be able to make a positive contribution to earnings. We are pleased to be able to propose an attractive di- vidend of 60 cents per share again at this year's Annual General Meeting. As in 2019, there is also the option to receive the divi- dend in the form of shares. We encourage all shareholders to

make use of this option.

With best regards from Mannheim

Thomas Gutschlag CEO

WELLPAD IN WYOMING, USA

Jan-Philipp Weitz CFO

IV.

ASSETS

I. 1. 2.

A.

FIXED ASSETS Intangible assets

Purchased franchises, industrial and similar rights and assets, and licenses in such rights and assets Goodwill

2.

II.

1.

3.

Property, plant and equipment Petroleum extraction equipment Exploration and evaluation Plant and machinery

4.

Other equipment, furniture and fixtures

5.

Advance payments and assets under construction

III. 1. 2. 3.

Financial assets Equity investments

Loans to other investees and investors Securities classified as fixed assets

B.

I.

CURRENT ASSETS Inventories

Finished goods and merchandiseII. 1. 2. 3.

Receivables and other assets Trade receivables

Receivables from other investees and investors Other assets

III.

Securities classified as current assets

Bank balances

C. D.

PREPAID EXPENSES DEFERRED TAX ASSETS TOTAL ASSETS

31.03.2022	31.03.2021	31.12.2021
EUR	EUR	EUR
30,119,379	21,209,762	28,569,435
1,237,533	1,322,855	1,252,075
31,356,912	22,532,617	29,821,510
147,460,594	109,654,607	143,612,198
2,031,325	4,208,453	5,225,207
107,396	119,871	111,402
87,967	198,685	107,480
11,302,723	0	0
160,990,005	114,181,616	149,056,287
14,551,553	16,900,936	14,551,553
5,224,903	4,712,026	4,781,640
11,485,458	13,213,826	13,630,221
31,261,914	34,826,788	32,963,414
174,500	185,720	174,500
174,500	185,720	174,500
25,260,936	14,384,799	16,794,783
2,374,371	149,002	1,103,287
8,748,703	7,397,081	8,529,081
36,384,010	21,930,882	26,427,151
12,765,998	19,459,226	10,791,863
17,246,684	16,236,222	12,699,856
1,172,493	1,211,826	892,604
2,228,132	1,238,540	2,163,570
293,580,648	231,803,437	264,990,755

EQUITY AND LIABILITIESA.

I.

EQUITY Subscribed Capital . / . less nominal value of treasury shares

D. E.

Conditional capital EUR 2,200,000 (previous year: EUR 2,200,000)

III. IV. V. VI.

II.

Capital reserves

4.

Retained income

3.

Equity differences from currency translation Consolidated net retained profit Non-controlling interests

B. 1. 2.

PROVISIONS Tax provisions Other provisions

2.

C.

1.

LIABILITIES

Bonds, thereof convertible EUR 10,700,000 (previous year: EUR 10,700,000) Liabilities to banks

Trade payables Other liabilities

DEFERRED INCOME DEFFERED TAX LIABILITIES

TOTAL EQUITY AND LIABILITIES

31.03.2022	31.03.2021	31.12.2021
EUR	EUR	EUR
5,081,747	5,081,747	5,081,747
-127,810	4,953,937	-127,810	4,953,937	-127,810 4,953,937
29,999,609	30,066,884	29,999,609
0	0	0
5,971,524	-622,749	3,469,855
46,176,841	20,523,307	34,299,480
8,095,162	6,898,907	7,351,182
95,197,073	61,820,286	80,074,063
34,000	0	34,028
22,208,922	12,812,545	18,808,319
22,242,922	12,812,545	18,842,347
110,700,000	114,419,000	97,761,000
19,696,743	9,637,527	19,630,556
12,930,680	4,251,459	20,764,318
11,456,596	11,866,932	9,936,605
154,784,018	140,174,918	148,092,479
258,780	0	0
21,097,854	16,995,688	17,981,866
293,580,648	231,803,437	264,990,755