Mr Rieck, how were things for the Deutsche Oel & Gas Group back at the start of the year?
Kay Rieck: We started off the year with an optimistic outlook and so far, 2018 has not disappointed. In January, to enable us to do everything we had set out to do and to achieve our ambitious exploration objectives, we recruited a number of new team members for our Alaska site. This included getting experienced geophysicist and oil industry expert Scott Pinsonnault on board as our new Chief Operating Officer.
And what key events took place in the months that followed?
Kay Rieck: We gained a greater financial commitment from US investor Energy Capital Partners, which enabled us to finance the entire 2018 season and begin drilling. We’re now in the process of implementing the next few months of our exploration plan: We’re currently finishing off the KLU#3c bore, and we’ll then move on to commissioning. The next step is to drill another bore, KLU#3d, which we aim to obtain gas from before the end of this season.
How many bores are you extracting at the moment?
Kay Rieck: We started the season with two bores. From November 2018, we’ll be producing natural gas from a total of four bores, which will massively increase our volumes.
And have you secured the sale of all of this gas?
Kay Rieck: Yes. This year, we’ve concluded a new contract with local energy supplier Municipal Light & Power (ML&P). We also agreed a contract with Enstar, Alaska’s largest gas supplier, effective from 1 April 2018. And things are looking good for the future too: A study by the Petrotechnical Resources of Alaska Consulting Company shows that the demand for gas in the Cook Inlet is expected to increase until 2021, surpassing current local production capacity. We are one of the few companies actually investing in expanding our capacity.
Has there been any news on tax credit payments?
Kay Rieck: In June, the governor of Alaska, Bill Walker, signed a bill enabling all outstanding and future tax credit payments to be paid to natural gas and crude oil extraction companies in Alaska. As these tax credits are an important part of the Deutsche Oel & Gas Group’s financing, we were pleased to hear this news – we’re due payments of around 147 million US dollars. If everything goes to plan, we should start seeing payments come in in the next six to nine months.