Q1 2019 results will be released end of April. Below are results from 2017 and 2018 sales.
2017 – All USD Gas Sales: $24,000 Gas Trading: $13,099,000 Royalty Expense: ($7,000) Income From Equity Investment: $6,767,000 Operating Expenses (Total): $34,218,000 - $16 million one time impairment included Loss: $14,869,000 – Should have been a profit with one time expense removed
2018 – All USD Gas Sales: $142,000 Gas Trading: $20,428,000 Royalty Expense: ($38,000) Income From Equity Investment: $6,121,000 Operating Expenses (Total): $23,573,000 Income Tax Expense: $2,000 Foreign Currency Gain: $52,000 Income: $ 3,130,000 Earnings Per Share In 2018: $3,130,000 USD X 1.3344 CDN (Exchange Rate March 31 2019) = $4,176,672 **Canadian Company, Therefore earnings must be converted to reflect true share value** $4,176,672 / 314,215,355(common shares) = $0.0133 EPS
MD&A Highlights From 2018 Results The Company is a publicly-traded, international energy company engaged in exploration and development of onshore oil and gas properties in Ukraine. Key to success in this region is the Company’s strong local relationships, key operating partnerships and a history of management experience operating in-country. Current production is driven by a 35% interest in KUB-Gas LLC (“KUB-Gas”) in eastern Ukraine and the Company’s 100% operated interest in western Ukraine in Tysagaz LLC (“Tysagaz”). The Company also holds a 50% interest in CNG Holdings Netherland B.V. (“CNG Holdings”) which in turn owns CNG LLC (“CNG LLC”) to jointly explore a production licence in western Ukraine. As at December 31, 2018, the Company had an effective 35% ownership interest in KUB-Gas, a Ukrainian company which owns assets representing a substantial portion of the Company’s core operating properties, income and cashflow. The Company also owns 100% ownership of Tysagaz, whose producing assets are in western Ukraine but have been suspended since April 1, 2016 other than minor production from RK-1. In addition, the Company has an effective 50% ownership interest in CNG LLC, a Ukrainian company with a production licence in western Ukraine that has no current production but the Company expects to drill exploratory wells in 2019. Highlights • Kub-Gas successfully recompleted the Olgovskoye-3 (“O-3”) well to a “behind pipe pay” zone designated as the Bashkirian-1b (“B1b”). The well initially tested at higher rates and put into production at a stabilized rate at 1.4 million cubic feet per day (“MMcf/d”) in the fourth quarter of 2018.
• Kub-Gas also recompleted the Olgovskoye-9 (“O-9”) well to the zone designated as the Bashkirian-3 (“B3”). During a standard multi-rate test, the zone was tested up to 2.5 million cubic feet per day (“MMcf/d”) and was put into production at a stable rate of 1.7 MMcf/d during the second half of 2018.
• The Company reported income from equity investment of $6,121,000 during the year ended December 31, 2018 as compared to income of $6,767,000 in 2017.
• The Company reported net income of $3,078,000 or $0.01 per share during the year ended December 31, 2018 as compared to a net loss of $14,342,000 or $0.05 per share during 2017 when the Company recorded one-time impairment charges.
• During the year ended December 31, 2018, the Company received $5,676,000 in dividends from KUB Holdings as compared to $4,134,000 in dividends in 2017.
• The Company made a loan repayment of $1,067,000 to KUB-Gas during 2018 in conjunction with its maturity. In addition, the Company received $300,000 from Kub Holdings in conjunction with a longterm loan repayment.
• Production averaged 836 boe/d (97% weighted to natural gas and the remaining to condensate) for the year ended December 31, 2018 as compared to 977 boe/d for 2017.
• Netbacks of $29.33/boe or $4.88/Mcfe for the year ended December 31, 2018 as compared to netback of $25.19/Boe or $4.20/Mcfe for 2017.
• Achieved average natural gas price of $7.94/Mcf and condensate price of $70.47/bbl during the year ended December 31, 2018 as compared to $6.50/Mcf and $69.56/bbl for 2017.
• On January 1, 2018, the royalties on new wells drilled in Ukraine after January 1, 2018 were reduced to 12% from 29% for a minimum period of five years.
• On March 1, 2018, a new law was passed in Ukraine intended to simplify regulatory procedures for the oil and gas sector which should increase the speed and efficiency of approvals.
• The new Nitrogen Rejection Unit (“NRU”) is nearing completion and is planned to be operational in 2019. However, due to continued construction delays, on November 19, 2018, the Company filed a claim with American Arbitration Association (“AAA”), seeking $300,000 (plus interest and attorney fees) from the NRU manufacturer in contractual delay damages.
• The Company and its partner plan to start a three well exploration program at Uzhgorod in mid 2019, dependent on timing of permitting and weather conditions in the field. The well costs are expected to be incurred 100% by our partner. Eastern Ukraine KUB-Gas Assets (35%) Kub-Gas has successfully recompleted the O-3 and O-9 wells in 2018. There are ten other wells with “behind pipe pays” that may be attractive recompletion opportunities in the Olgovskoye License. As the currently producing intervals deplete, the production team can recomplete these additional zones in the existing wells. Opportunities such as these generate above average returns for shareholders, particularly given the current gas price in Ukraine. The North Yatskivska #3 (“NY-3”) well on the West Olgovskoye (“WO”) licence was drilled to a total depth of 2,300 metres and evaluated several prospective horizons. Test results indicated the well encountered noncommercial gas shows. The well was drilled based on 2D seismic and the Company believes the commencement of a 3D seismic program later this year should improve the probability of success of future exploration wells. Western Ukraine Tysagaz Assets (100% Interest) The RK field was temporarily suspended on April 1, 2016 because the nitrogen concentration exceeded the allowable limit stipulated by the gas pipeline operator. While the Company waitsfor the nitrogen rejection unit (“NRU”) that can extract nitrogen from natural gas from the shallower sands, the Company began selling a nominal amount of rich gas from a deep well to evaluate the Mesozoic formation. The Company is purchasing a new NRU to re-commence production on the RK field. The new NRU is being manufactured in the United States. The new NRU is planned to be operational in 2019. Western Ukraine CNG Assets (50% Interest) During 2017, CNG LLC completed a 118 square kilometre 3D seismic survey on the Uzhgorod production licence in western Ukraine. The results were interpreted and identified multiple drill targets. The Company and its partner plan to start a three well exploration program at Uzhgorod in mid 2019, dependent on timing of the permitting and weather conditions in the field. The well costs are expected to be incurred 100% by our partner. Ukraine Gas Prices and Currency The Ukrainian exchange, the Hryvnya (“UAH”) rate versus the USD was 27.76 UAH/USD at December 31, 2018, which was relatively flat as compared to the 28.1 UAH/USD at December 31, 2017. During the year ended December 31, 2018, gas pricesrealized were $7.94/Mcf which was higher than the 2017 price of $6.50/Mcf. The Company believes gas prices in 2018 were higher than 2017 because of a longer colder winter in Europe this year and lack of inventory. The future of natural gas prices in Ukraine is currently subject to a high degree of uncertainty and it is unknown what the future prices the Company will receive on its Ukraine production. Outlook The Company is participating with KUB-Gas to complete additional recompletion operations given the success of the O-3 and O-9 recompletions, one of which is underway at the time of this report with another 3 in the permitting phase. Kub-Gas may drill one additional well in 2019 and kickoff a 3D seismic program on the WO licence to delineate known structures found from 2D seismic. In western Ukraine, the Company is purchasing a new NRU with a plan to resume production at the RK field in 2019. The Company and its partner plan to start a three well exploration program in the Uzhgorod license in mid 2019 on structures defined by 3D seismic. The well costs are expected to be incurred 100% by our partner. From Last Information Circular: Principal Holders of Voting Shares Other than as disclosed below, to the knowledge of the Corporation's directors and executive officers, as at the date of this Information Circular, no person or corporation beneficially owns, directly or indirectly, or controls or directs voting securities carrying 10% or more of the voting rights attached to the issued and outstanding Common Shares of the Corporation. Name No. of Common Shares % of Outstanding Common Shares Pelicourt Limited(1) 124,336,089 39.5% Fergava Finance Inc. 44,444,444 14.1% Notes: (1) Mikhail Afendikov, Executive Chairman and Chief Executive Officer of the Corporation, owns a 72.4% interest in Pelicourt Limited. As of the Record Date, the directors and officers of Cub own, directly or indirectly, 3,685,572 Common Shares, representing approximately 1.2% of the issued and outstanding Common Shares, 9,900,000 Stock Options, representing approximately 57% of outstanding Stock Options, zero Restricted Share Units and zero Warrants.
Posted by chiliandrillman on :
Cub Energy's 2018 2P oil, gas reserves at 1,572 mboe
2019-03-27 07:17 MT - News Release
Mr. Mikhail Afendikov reports
CUB ENERGY INC. REPORTS YEAR-END RESERVES FOR 2018
Cub Energy Inc. has released results of its independent reserves evaluations as of Dec. 31, 2018, on its oil and gas properties in Ukraine. The evaluation of the Tysagaz LLC property (100-per-cent working interest) and KUB-Gas LLC properties (35-per-cent working interest) was conducted by Ryder Scott Petroleum Consultants, an independent qualified reserves evaluator and auditor.
All evaluations were prepared using guidelines outlined in the Canadian Oil and Gas Evaluation (COGE) Handbook and are in accordance with Canadian Securities Administrators' National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities. Cub's NI 51-101 disclosure is contained in its annual information form for the year ended Dec. 31, 2018, filed on SEDAR and posted on the company's website. Highlights of the net reserves are as follows (2):
Proved developed producing (PDP) oil and natural gas net reserves of 287,000 barrels of oil equivalent, or 1,723 million cubic feet of gas equivalent with net present value at 10-per-cent discount before tax (NPV-10) of $9.5-million (U.S.) (four cents per share) (1); Proved (1P) oil and natural gas net reserves of 988,000 barrels of oil equivalent or 5,930 million cubic feet of gas equivalent with NPV-10 of $19.47-million (U.S.) (eight cents per share) (1); Proved and probable (2P) oil and natural gas net reserves of 1,572,000 barrels of oil equivalent or 9,431 million cubic feet of gas equivalent with NPV-10 of $30.39-million (U.S.) (13 cents per share) (1). Notes:
(1) The per-share amounts are calculated by dividing the respective NPV-10 before tax numbers by the number of common shares issued and outstanding shares, being 314,215,355.
(2) Reserves net to the company's interest after deduction of royalties.
Total company reserves summary
The attached tables summarize the total company reserves and associated net present values discounted at 10 per cent before tax at Dec. 31, 2018, using forecast prices.
TOTAL COMPANY NET RESERVES VOLUMES (1)
Reserves category Natural gas NGLs Mboe Mmcfe (mmcf) (mbbl)
Developed producing 1,681 7 287 1,723 Developed non-produced 1,895 3 319 1,913 Undeveloped 2,295 - 382 2,295 Total proved (1P) 5,870 10 988 5,930 Total proved plus probable (2P) 9,311 20 1,572 9,431
Note: (1) Reserves net to the company's interest after deduction of royalties. NET PRESENT VALUE AT 10-PER-CENT DISCOUNT BEFORE TAX (NPV-10) (1) (2) (3)
Reserves category NPV-10 (US$ millions)
Proved developed producing (PDP) $9.50 Total proved (1P) $19.47 Total proved plus probable (2P) $30.39
Notes: (1) The forecast prices used in the calculations of the present value of future net revenue for year-end 2018 are based on the reserves reports of eastern Ukraine and western Ukraine asset forecast prices. (2) Estimated values do not represent fair market value. (3) The total proved NPV-10 value of the estimated future net revenues are not intended to represent the current market value of the estimated oil and natural gas reserves. NPV-10 of probable reserves represents the present value of estimated future revenues to be generated from the production of probable reserves, calculated net of estimated lease operating expenses, production taxes and future development costs, using costs as of the date of estimation and using estimated future gas prices, without giving effect to non-property-related expenses such as general and administrative expenses, debt service, depreciation, depletion, and amortization, or future income taxes, and discounted using an annual discount rate of 10 per cent. With respect to pretax NPV-10 amounts for probable reserves, they do not purport to present the fair value of the company's probable reserves. About Cub Energy Inc.
Cub Energy is an upstream oil and gas company with a proven record of exploration and production cost efficiency in Ukraine. The company's strategy is to implement Western technology and capital, combined with local expertise and ownership, to increase value in its undeveloped land base, creating and further building a portfolio of producing oil and gas assets within a high-pricing environment.
CUB ENERGY ANNOUNCES NET EARNINGS OF US $3.1 MILLION OR US $0.01 PER SHARE FOR FISCAL 2018
Cub Energy Inc. has released its audited financial and operating results for the year ended Dec. 31, 2018. All dollar amounts are expressed in United States dollars unless otherwise noted. This update includes results from KUB-Gas LLC, of which Cub has a 35-per-cent equity ownership interest, Tysagaz LLC, Cub's 100-per-cent-owned subsidiary, and CNG LLC, of which Cub has a 50-per-cent equity ownership interest.
Mikhail Afendikov, chairman and chief executive officer of Cub, said: "We wish to report net income $3.1-million or one cent per share during the year ended Dec. 31, 2018, and receipt of $5.7-million in dividends from its eastern Ukraine investment. Kub-Gas maintained deliverability over 14 million cubic feet per day by successfully recompleting two wells in the Olgovskoye licence during 2018 and Kub-Gas is continuing other recompletions in 2019. In western Ukraine, Cub and its partner plan to drill our first three wells on the jointly owned Uzhgorod licence in 2019, which costs are expected to be incurred 100 per cent by our partner."
Operational highlights:
In the fourth quarter of 2018, Kub-Gas successfully recompleted the Olgovskoye-3 well to a "behind pipe pay" zone designated as the Bashkirian-1b (B1b). The well initially tested at higher rates and put into production at a stabilized rate of 1.4 million cubic feet per day (MMcf/d). This followed the other successful recompletion, the Olgovskoye-9 (O-9) well to the zone designated as the Bashkirian-3 (B3). During a standard multirate test, the zone was tested up to 2.5 million cubic feet per day and was put into production at a stable rate of 1.7 MMcf/d. The price of natural gas averaged $7.94 per thousand cubic feet (Mcf) and condensate price of $70.47/barrel during the year ended Dec. 31, 2018, as compared with $6.50/Mcf and $69.56/bbl for 2017. Production averaged 836 barrels of oil equivalent per day (boe/d) (97 per cent weighted to natural gas and the remaining to condensate) for the year ended Dec. 31, 2018, as compared with 977 boe/d for 2017. On Jan. 1, 2018, royalties on new wells drilled in Ukraine after Jan. 1, 2018, were reduced to 12 per cent from 29 per cent for a minimum period of five years. On March 1, 2018, a new law was passed in Ukraine intended to simplify regulatory procedures for the oil and gas sector, which should increase the speed and efficiency of approvals. The new nitrogen rejection unit (NRU) is planned to be operational in 2019. However, due to continued construction delays, on Nov. 19, 2018, the company filed a claim with American Arbitration Association, seeking $300,000 (plus interest and attorney fees) from the NRU manufacturer in contractual delay damages. The company and its partner plan to start a three-well exploration program at Uzhgorod in mid-2019. The well costs are expected to be incurred 100 per cent by the company's partner. Financial highlights:
The company reported net income of $3.1-million during the year ended Dec. 31, 2018, as compared with a net loss of $14.3-million in 2017 when the company recorded one-time impairment charges. Netbacks of $29.33/boe or $4.88/Mcfe for the year ended Dec. 31, 2018, as compared with netback of $25.19/boe or $4.20/Mcfe for 2017. During the year ended Dec. 31, 2018, the company received $5.7-million in dividends from KUB Holdings as compared with $4.1-million in dividends in 2017. The company repaid $1.1-million of its loan to KUB-Gas during the year ended Dec. 31, 2018, in conjunction with its maturity. (in thousands of U.S. dollars)
Three months ended, Year ended, Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2017
Petroleum and natural gas revenue 74 - 142 24 Pro rata petroleum and natural gas revenue (1) 4,385 3,609 14,864 14,285 Revenue from gas trading (2) 6,831 3,957 20,428 13,099 Net income (loss) 570 (15,290) 3,078 (14,342) Income per share -- basic and diluted 0.00 (0.05) 0.01 (0.05) Funds generated from operations (3) 2,353 2,832 2,690 2,519 Capital expenditures (5) 2 637 221 1,678 Pro rata capital expenditures (5) 222 596 1,682 4,320 Pro rata netback ($/boe) 35.28 27.29 29.33 25.19 Pro rata netback ($Mcfe) 5.88 4.55 4.88 4.20
Dec. 31, 2018 Dec. 31, 2017
Working capital (deficit) 3,798 (478) Cash and cash equivalents 7,236 6,190 Long-term debt 5,591 5,451
Notes: (1) Pro rata petroleum and natural gas revenue is a non-international financial reporting standards measure that adds the company's petroleum and natural gas revenue earned in the respective periods to the company's 35-per-cent equity share of the KUB-Gas natural gas sales that the company has an economic interest in. (2) During the three months and year ended Dec. 31, 2018, the company recorded $6,831,000 (2017 -- $3,957,000) and $20,428,000 (2017 -- $13,099,000) in revenue for gas trading and $6,276,000 (2017 -- $3,767,000) and $19.15-million (2017 -- $12,767,000) for the cost of the sales for a net profit from gas trading of $555,000 (2017 -- $56,000) and $1,278,000 (2017 -- $233,000), respectively. (3) Funds from operations is a non-IFRS measure and is defined as cash flow from operating activities, excluding changes in non-cash working capital. (4) Pro rata funds from operations is a non-IFRS measure that adds the company's funds from operations in the respective periods to the company's 35-per-cent equity share of the KUB-Gas and 50-per-cent equity share of CNG Holdings funds from operations that the company has an economic interest in. (5) Capital expenditures includes the purchase of property, plant and equipment, and the purchase of exploration and evaluation assets. Pro rata capital expenditures are a non-IFRS measure that add the company's capital expenditures in the respective periods to the company's 35-per-cent equity share of the KUB-Gas and 50-per-cent equity share of CNG Holdings capital expenditures that the company has an economic interest in. Outlook
The company is participating with KUB-Gas to complete additional recompletion operations given the success of the O-3 and O-9 recompletions, one of which is under way at the time of this report with another three in the permitting phase. Kub-Gas may drill one additional well in 2019 and kick off a 3-D seismic program on the WO licence to delineate known structures found from 2-D seismic.
In western Ukraine, the company is purchasing a new NRU with a plan to resume production at the RK field in 2019. The company and its partner plan to start a three-well exploration program in the Uzhgorod licence in mid-2019 on structures defined by 3-D seismic. The well costs are expected to be incurred 100 per cent by the company's partner.
Supporting documents
Cub's complete quarterly reporting package, including the unaudited interim financial statements and associated management's discussion and analysis, has been filed on SEDAR and has been posted on the company's website.
About Cub Energy Inc.
Cub Energy is an upstream oil and gas company, with a proven record of exploration and production cost-efficiency in Ukraine. The company's strategy is to implement Western technology and capital, combined with local expertise and ownership, to increase value in its undeveloped land base, creating and further building a portfolio of producing oil and gas assets within a high pricing environment.
December 18th 2018 interview article regarding Cub Energy's joint venture partner who will be drilling 3 wells in 2019 at no cost to KUB.V. This is a multi billion dollar company
December 18th 2018 - Nafta plans to invest almost $ 200 million in natural gas production in Ukraine
Large multinational companies are planning to invest hundreds of millions of euros in the modernization and development of oil and gas fields in Ukraine. And the first for many years a serious foreign investor who enters the domestic market of hydrocarbons is the Slovak company Nafta. This was announced today at a press conference of the management of this company. "The EPH industrial and energy holding has been operating in Ukraine for the first year. We have studied almost the entire territory of the country and concluded that in the next 5 years we will be able to effectively invest $ 200 million in Ukrainian gas fields. Directly organizing and carrying out gas exploration and production Our subsidiary Slovak company Nafta, which has been successfully operating in the western region of the country for 5 years, will be engaged in, "said Robert Bundil, project manager for EPH holding, to journalists.
According to R. Bundila, this is a guaranteed investment in the development of the Yuzovskoye field. The businessman recalled that today, in the first half of the day, the Cabinet of Ministers at its meeting approved the transfer of 90% of the rights and obligations of Nadra Yuzovskaya LLC in the Production Sharing Agreement (PSA) on Yuzovskaya Square (Kharkiv and Donetsk region) to Yuzgaz BV (Netherlands) with the investor-operator of the project represented by the Slovak company Nafta. According to the explanatory note to the draft government order, Nafta provided a guarantee of 100% collateral for Yuzgaz’s obligations, which would cover $ 200 million in search funding (drilling at least 15 wells).
In turn, Lubomir Kopchik (Nafta RV), director of the Nafta representative office in Ukraine, stressed that in his work on hydrocarbon production, the company will not only explore new sites, but also reconstruct and renew old wells, which number 47 facilities. At the same time, advanced world technologies will be used, with which the Ukrainian specialists will mainly work.
“We definitely count on attracting both local specialists and Ukrainian companies to work. This is about creating hundreds of new jobs. And at least 80% of local specialists will work in our facilities. As a result: filling local budgets through taxation” - noted L. Kopchik.
In turn, the Ambassador Extraordinary and Plenipotentiary of the Czech Republic to Ukraine, Radek Matula, noted that entering the Ukrainian investment market of such a serious representative of Central European business, like the ERN holding and its subsidiary Nafta, is an excellent example for other potential investors.
“For more than four years we have been supporting the Ukrainian government’s policy of increasing its own gas production. In the situation in which your country is today, the arrival of serious European capital will only contribute to the growth of Ukraine’s energy independence,” Radek Matula summed up.
As the Deputy Minister of Energy and Coal Industry Natalia Boyko noted on her Facebook page, an important step was taken in the direction of energy independence at the Government meeting today! A step towards new investments. Approved competitive conditions for 12 new projects on the conclusion of agreements on production sharing. Ukraine expects to attract more than 50 billion UAH to hydrocarbon production as a result of the conclusion of future agreements.
"Competitions will be held with maximum transparency. To increase transparency, a provision has been included that obliges applicants to disclose not only information about their participants, but also actual final beneficiaries ... Competitive conditions provide for a minimum investment, list and term of work at the site, main criteria for product distribution and the specifics of the terms of the agreement on the part of the state ", - said N. Boyko.
The official emphasized that in this way, in 2019, the state would offer investors at auctions and tenders over 40 oil and gas areas with a total area of over 20 thousand sq. Km.
Reference:
Oil and gas company Nafta is a leader in the field of hydrocarbon research and production in Slovakia with more than 100 years of experience. The company is engaged in the search and production of gas and oil, applies leading modern technologies in its work. During its existence, Nafta has drilled more than 3 thousand wells in the Vienna and East Slovak basins. The company has a storage capacity of 2.74 billion cubic meters. m of natural gas.
Since 2016, Nafta has been implementing a joint project with the American company Cub Energy Inc. in Ukraine. gas prospecting and production in the Transcarpathian region. In two years, Nafta carried out seismic surveys and this year began drilling three exploratory wells.
The management of the Slovak Nafta, of which 29% is owned by the state, is carried out by the infrastructure division of EPIF, which is 68% owned by the EPH Central European Energy Holding.
Posted by chiliandrillman on :
Another article done on January 15th 2019 regarding once again Cub Energy's JV Partner. Both the December and January articles mention Cub Energy Inc, which verifies that this is the actual partner.
January 15, 2019 10:35 Gas News from vEnergetike.sk vEnergetike.sk/NAFTA
NAFTA has invested in reliable and safe operation The operator of underground gas storage facilities was also active in the west of Ukraine.
Last year, NAFTA's investments were mainly directed to reliable and safe operation. “In operating operations, we focus on increasing operational safety, which is extremely important for NAFTA. Investments are geared towards security, increased automation, and the use of a wealth of collected information to further optimize processes. We are constantly working on improving the safety of our facilities, protecting the health of our employees, suppliers and people living in the vicinity of our operations and protecting the environment, ”said NAFTA spokeswoman Martina Štecová.
Last year, the company continued its projects on foreign markets. "In this context, we have expressed an interest in taking over the underground storage facilities of Inzenham, Wolfersberg and Breitbrunn in Bavaria, Germany, and we have signed a sales agreement with DEA Deutsche Erdoel AG in early 2018," Štecová added.
The operator of underground gas storage facilities was also active in the west of Ukraine. “As part of our international activities, we have been developing exploration activities in Uzhgorod, where NAFTA is actively working with Cub Energy Inc. In 2017, 3D seismic measurements were made on 118 square kilometers. Last year, the entry and clearance of land for drilling areas and access roads was provided; legislative permits and preparation for the implementation of exploration wells scheduled for this year. In this area we see a similar geological trend as in Slovakia, which gives us the opportunity to fully exploit our long-term knowledge and experience in the exploration and production of hydrocarbons, ”added Štecová.
NAFTA also continued its exploration project around Trnava with a company from Vermillion Energy Inc. In 2017, a 3D seismic measurement was carried out on an area of approximately 250 square kilometers, which is the largest 3D seismic project implemented in Slovakia. “Last year, the 2017 3D seismic data were interpreted and the brochures were identified. We are currently preparing drilling projects, ”said Štecová.
In order to increase efficiency, NAFTA has concluded a cooperation agreement with OMV Austria Exploration & Production GmbH. “The subject of the contract was mutual support in the event of an emergency in the future. In removing the emergency situation, both companies are ready to help each other by earmarking their technology or human resources, ”said Štecová.
In addition to the aforementioned cooperation, NAFTA joined the hydrogen initiative last year to maximize the potential of hydrogen produced from renewable sources. “Hydrogen as an energy carrier has the potential to cover the unevenness of electricity generation from renewable sources, while its storage will bring flexibility just for renewable electricity sources. The potential of "renewable" hydrogen is not only in its ability to tackle energy storage, but renewable hydrogen is considered a sustainable climate energy carrier that can be used in various fields - transport, energy, industry and so on. It is for these reasons that renewable hydrogen is expected to become a key instrument for the global decarbonisation of the environment in the coming years, ”Štecová concluded.
Posted by chiliandrillman on :
The Cub Energy proxy states one resolution of a rollback being considered if appropriate. I myself and several associates of mine have verified that this will not happen unless a major asset is acquired. If you look on SEDAR, several prior proxy forms show a rollback and this is just carrying forward.
From the 2019 proxy: to amend the Articles of the Corporation to consolidate the issued and outstanding common shares in a range of one common share for up to every 10 of the issued and outstanding common shares that the board of directors, in its sole discretion, determines to be appropriate;
Posted by chiliandrillman on :
Below is the website for NAFTA Gas, the JV partner who will be drilling 3 major wells this summer and KUB owns 50% of the lease and isn't paying a penny to drill those wells. As you will see on the Nafta website, this is a serious company with plans to expand across Europe. They have been waiting since 2016 to drill these wells and now the time has come to get the project started. Keeping in mind they sepent some serious money doing seismic and understand the geology perfectly since the same reservoir on the Slovakia side is owned by them. Compare the Nafta map to page 9 of the Kub presentation and you'll see how close their facility is to our lease.
NJSC Naftogaz of Ukraine will raise the price of natural gas for industrial consumers and other economic entities by 5.2-11.5% from May 1, 2019, the company’s press service has reported. “The proposed prices for natural gas from the company's resource have been differentiated depending on the volume of purchases, terms of payment and the state of previous settlements with Naftogaz. Depending on these indicators, Naftogaz proposes natural gas at the price of UAH 6,299.00 – 6,948.00 per 1,000 cubic meters (without VAT),” reads the report.
Comparing with the prices in April 2019, the prices will be raised by 5.2-11.5% in May, the company stated.
In particular, the final price for industrial consumers and other economic entities that purchase up to 50,000 cubic meters of natural gas on a prepayment basis will be UAH 7,558.8 per 1,000 cubic meters. For industrial consumers and other economic entities that purchase over 50,000 cubic meters of natural gas or make a payment during a month, the final price will be set at UAH 8,337.6 per 1,000 cubic meters.
Posted by chiliandrillman on :
From The March 2019 Company presentation, KUB has 6 projects on the go. If all work out as planned, the upside is tremendous here. See info below:
Uzhgorod Licence –Western Ukraine U Field: Asset Overview W.I. 50% owned by Cub Operator Joint Contract 20 year special production permit (expires 2036) Status No current production Area 75,000 acres Highlights ▪ The Company partnered with a Slovakian based company with extensive experience in E&P ▪ The partnership included a sale of 50% ownership in Uzhgorod. Pursuant to the agreement, the partner is to: – Pay Cub €1.5 million (paid) – Fund a 100 square kilometer 3D seismic survey (completed) – Fund the drilling and tie-in of the first three wells (2019) ▪ The licence is on the border with Slovakia, Hungary and Romania. Adjoining producing or past producing fields Work Plan ▪ Plan is to drill up to three exploratory wells in mid 2019
O Field – Eastern Ukraine O Field: Asset Overview W.I. 35% owned by Cub Operator KUB-Gas Contract 20 year special production permit (expires 2032) Status Producing Area 22,000 acres gross Highlights ▪ Recompleted the O-9 well in Q2 2018 and put into production at a stable rate of 1.7 MMcf/d since June. ▪ Recompleted the O-3 well in Q4 2018 and put into production at a stable rate of 1.4 MMcf/d since October. ▪ Multiple other recompletion opportunities exist. ▪ 100% success rate on five O wells prior to 2107 – All five wells tied in for commercial production ▪ Successful fracture stimulations performed in prior years Work Plan ▪ 2019 work plan will include several recompletion candidates.
M Field – Eastern Ukraine M Field: Asset Overview W.I. 35% owned by Cub Operator KUB-Gas Contract 20 year special production permit (expires 2032) Status Producing Area 18,000 acres gross Highlights ▪ Upgraded processing facility brought on line and boosts throughput capacity Work Plan ▪ 2019 work plan will include several recompletion candidates
West O Field – Eastern Ukraine WO Field: Asset Overview W.I. 35% owned by Cub Operator KUB-Gas Contract 20 year special production permit (expires 2035) Status No current production Area 111,000 acres gross Highlights ▪ The licence immediately offsets the O and NM licences ▪ It surrounds (but does not include) the existing Druzhelyubovskoe gas/condensate field, which has produced gas from the same zones that produce in the O and M fields. ▪ Completed 26 km of 2D seismic in 2016; Completed150 km 2D seismic survey in 2017. Interpreting results to identify drill targets. Work Plan ▪ 2019 work plan to include 3D seismic survey to evaluate new drill targets
RK Field –Western Ukraine RK Field: Asset Overview W.I. 100% owned by Cub Operator Cub Contract 20 year special production permit (expires 2030) Status Producing nominal amounts Area 2,000 acres Highlights ▪ Ordered a new Nitrogen Rejection Unit ▪ Goal of resuming material production in 2019 ▪ During 2018, the Company began selling a nominal amount of rich gas from a deep well to evaluate the Mesozoic formation ▪ Adjacent to producing fields in Hungary, Romania and Slovakia
Stanivske Licence –Western Ukraine S Field: Asset Overview W.I. 100% owned by Cub Operator Cub Contract 20 year special production permit (expires 2036) Status No current production Area 31,000 acres Highlights ▪ Recently granted 20 year production licence ▪ A 45 square kilometer 3D seismic survey was acquired by the company in 2013 ▪ Gas was discovered on the field in 1990 by a prior operator Work Plan ▪ The company is currently evaluating its 2019 work program
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KUB.V Performance from 2009 to 2018
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Cub Energy Inc. Private Placements From 2009 to 2013, all done at much higher prices compared to where the stock trades now:
Private Placement Dates & Amounts (Does Not Include Shares From Finder Fee's Or Options/Warrants Execised) May 12th 2010 - 4,186,664 shares raised at $0.15 for $628,000 July 21 2010 - KUB.V Acquired Galizien Energy Corp For 4,400,000 shares September 28 2010 - 20,035,000 shares raised at $0.25 for $5 million October 26th 2010 - 20,000,000 shares raised at $0.40 for $8 million November 25th 2011 - 17,500,000 shares raised at $0.40 for $7 million March 29 2012 - KUB.V Acquired Gastek for 123,278,089 shares December 17 2012 - 31,250,000 shares raised at $0.40 for $12.5 million April 26 2013 - KUB.V Acquired Anatolia Energy For 13,900,000 shares
Posted by chiliandrillman on :
One well was put into production in Q4 that is averaging 220boed. 10 More wells possible just from just that one location. Then add in their other projects like the JV, NRU, etc.
Cub Energy recompletes Olgovskoye-3 well in Ukraine
2018-11-20 07:52 MT - News Release
Mr. Mikhail Afendikov reports
CUB ENERGY INC. ANNOUNCES THE SUCCESSFUL RECOMPLETION OF THE O-3 WELL IN EASTERN UKRAINE
Cub Energy Inc.'s KUB-Gas LLC, owner and operator of the eastern Ukraine licences, has released results of its recent recompletion of the Olgovskoye-3 well.
Kub-Gas utilized its own workover rig and crew to recomplete a productive gas sand interval designated as the Bashkirian-1b. The well has stabilized at a rate of 1.4 million cubic feet per day since October, 2018.
Mikhail Afendikov, chairman and chief executive officer of Cub Energy, commented: "The successful O-3 recompletion, coupled with the recent success of the O-9 recompletion in the second quarter of 2018, has increased the total field production by almost 20 per cent. Given the recent successes of the recompletions, their relatively low cost and the high gas price environment in Ukraine at present, Kub-Gas's priority is to focus on additional recompletion candidates, of which at least 10 wells have been identified."
About Cub Energy Inc.
Cub Energy is an upstream oil and gas company, with a proven record of exploration and production cost-efficiency in Ukraine. The company's strategy is to implement western technology and capital, combined with local expertise and ownership, to increase value in its undeveloped land base, creating and further building a portfolio of producing oil and gas assets within a high pricing environment.
Ukraine Faces a Bleak Winter as Russia Prepares to Cut Off Gas The head of Ukraine’s state gas company Naftogaz expects deliveries to stop on January 1, 2020.
If Russia does cut off gas to Ukraine, local producer pricing could easily double given supply/demand metrics. KUB could double their current cash flow and more depending on how many new wells are drilled.
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Cub Energy Inc. Q1 2019 Results. Financials + MD&A – All Information Found On Sedar
LIABILITIES Trade & Other Payables: $4,382,000 Loan From KUB-Gas(100% Owned Subsidiary): $ 5,229,000 Shareholder Loan(current portion): $250,000 Shareholder Loans (total): $2,000,000 Provisions: $484,000 Total Liabilities: $12,345,000
Asset/Debt Ratio: 1.81
2017-2019 Performance
2017 – All USD Gas Sales: $24,000 Gas Trading: $13,099,000 Royalty Expense: ($7,000) Income From Equity Investment: $6,767,000 Operating Expenses (Total): $34,218,000 - $16 million one time impairment included Loss: $14,869,000 – Should have been a profit with one time expense removed
2018 – All USD Gas Sales: $142,000 Gas Trading: $20,428,000 Royalty Expense: ($38,000) Income From Equity Investment: $6,121,000 Operating Expenses (Total): $23,573,000 Income Tax Expense: $2,000 Foreign Currency Gain: $52,000 Income: $ 3,130,000
2019 Q1 – All USD Gas Sales: $49,000 Gas Trading: $4,479,000 Royalty Expense: ($14,000) Income From Equity Investment: $1,522,000 Operating Expenses (Total): $5,074,000 Net Income: $962,000 Foreign Currency Gain: $437,000 Income: $1,399,000
2019 Earnings: $1,399,000 X 1.30(CDN Exchange) / 314,215,355 = $0.00578 or $0.006 cents earnings *Must convert USD to CDN to get real stock value of KUB.V(Canadian listed)
Management Discussion Highlights
Highlights The Company reported income from equity investment of $1,522,000 during the three months ended March 31, 2019 as compared to income of $1,706,000 in the comparative 2018 quarter. The Company reported net income of $962,000 or $0.00 per share during the three months March 31, 2019 as compared to net income of $779,000 or $0.00 per share during the same period in 2018. The Company recorded $1,684,000 in dividends during the three months March 31, 2019 compared with $1,054,000 in dividends in the first quarter of 2018. Production averaged 895 boe/d (97% weighted to natural gas and the remaining to condensate) for the three months March 31, 2019 as compared to 837 boe/d for the 2018 first quarter. Netbacks of $24.49/boe or $4.08/Mcfe were achieved for the three months March 31, 2019 as compared to netback of $25.93/Boe or $4.32/Mcfe for the comparative 2018 period. Achieved average natural gas price of $7.11/Mcf and condensate price of $42.57/bbl during the three months March 31, 2019 as compared to $7.16/Mcf and $60.60/bbl for the first quarter of 2018. Kub-Gas recompleted the Olgovskoye-7 (“O-7”) well during 2019 and it is currently being tested.
The Company and its partner plan to drill a three-well exploration program at Uzhgorod in mid 2019, dependent on timing of permitting and weather conditions. To date, the long-lead items for drilling have been delivered and road construction to the drill pads has commenced. The cost of for the first three wells are financed 100% by our partner. Eastern Ukraine KUB-Gas Assets (35%)
Kub-Gas recompleted the O-7 well in 2019 and is awaiting testing. There are approximately ten other wells with “behind pipe pays” that may be attractive recompletion opportunities in the Olgovskoye License. As the currently producing intervals deplete, the production team can recomplete these additional zones in the existing wells. Opportunities such as these generate above average returns for shareholders, particularly given the current gas price in Ukraine. Kub-Gas is also contemplating drilling a new well on the Makeevskoye Licence later in 2019. The Company expects to commence a 3D seismic program later this year should improve the probability of success of future exploration wells.
Western Ukraine Tysagaz Assets (100% Interest)
The RK field was temporarily suspended on April 1, 2016 because the nitrogen concentration exceeded the allowable limit stipulated by the gas pipeline operator. The Company is currently selling a modest amount of rich gas from a deep well to evaluate the Mesozoic formation on the RK field. Subsequent to the three months ended March 31, 2019, due to continued delays in the completion of the NRU, the Company and the NRU manufacturer entered into a mutual release agreement, including the release of the arbitration claim, in exchange for the Company taking physical possession of the NRU “as is”. The NRU has been relocated to another manufacturer in the Houston, Texas area and will undergo an evaluation and testing during the summer of 2019 to determine what is required to complete the NRU.
Western Ukraine CNG Assets (50% Interest)
The Company and its partner plan to drill a three-well exploration program at Uzhgorod in mid 2019, dependent on timing of permitting and weather conditions. To date, the long-lead items for drilling have been delivered and road construction to the drill pads has commenced. The cost of for the first three wells are financed 100% by our partner.
Ukraine Gas Prices and Currency
The Ukrainian exchange, the Hryvnya (“UAH”) rate versus the USD was 27.25 UAH/USD at March 31, 2019, which was relatively flat as compared to the 27.76 UAH/USD at December 31, 2018. During the three months ended March 31, 2019, gas prices realized were $7.11/Mcf which was relatively flat compared to the comparative 2018 price of $7.16/Mcf. The future of natural gas prices in Ukraine is currently subject to a high degree of uncertainty and it is unknown what the future prices the Company will receive on its Ukraine production.
Commencing August 2016, the Company’s wholly owned subsidiary, Tysagaz, began taking possession of its 35% ownership of gas produced at KUB-Gas. Tysagaz purchased the gas from KUB-Gas at the same price that KUB-Gas sold its gas to an affiliate of the majority shareholder of KUB-Gas. The Company agreed to this arrangement so it could attempt to earn additional net income on the gas sales price sold to majority shareholder’s affiliate. There were impairment charges that impacted net losses in 2017. During the quarter ended December 31, 2017, the Company recorded impairment charges due to the carrying value of its petroleum and natural gas assets exceeding the net present value of expected future cash flows using a discount rate of 26%. The high discount rate relates to the local discount rate in Ukraine and related country risk at that time. During the fourth quarter of 2017, the Company took a $5,300,000 impairment charge relating to the RK field and an impairment on its equity investment in Kub Holdings of $10,700,000.
Revenue from Gas Sales, Net of Royalty
The Company began selling a modest amount of rich gas from the RK field in western Ukraine from a deep well (RK-1) in the Mesozoic formation resulting in revenue during the three months ended March 31, 2019 of $49,000 as compared to $nil in the comparative 2018 period.
Revenue from Gas Trading, Net of Cost of Sales for Gas Trading
Commencing August 2016, the Company’s wholly owned subsidiary, Tysagaz, began taking possession of some of its 35% ownership of gas produced at KUB-Gas. Tysagaz purchased the gas from KUB-Gas at the same price that KUB-Gas sold its gas to an affiliate of the majority shareholder of KUB-Gas. The Company agreed to this arrangement so it could attempt to earn additional net income from the gas sales price sold to the majority owner’s affiliate. During the three months ended March 31, 2019, the Company recorded $4,479,000 in gas trading revenue and $4,240,000 for the cost of the gas trading for a net profit of $239,000 as compared to $5,670,000 in gas sales and $5,516,000 for the cost of the sales for a net profit from gas trading of $154,000 during the comparative 2018 quarter.
Income from Equity Investments
The Company accounts for its 35% indirect ownership in KUB Holdings and 50% ownership of CNG Holdings as investments under the equity method. During the three months ended March 31, 2019, KUB-Gas generated gross revenues of approximately $9,724,000 (2018 - $9,791,000) and had net income of $4,349,000 (2018 – $4,872,000). This resulted in a net income to the Company from its equity investment for the quarterly period of $1,522,000 (2018 – $1,706,000). The net income at CNG Holdings was $30,000 (2018 – $8,000) during the three months ended March 31, 2019. Net income in both periods primarily related to finance income, net of finance expense, on intercompany loans and the effects of foreign exchange to funds the exploration activities in Ukraine. The Company only records income/losses in its consolidated financial statements from its equity investment in CNG Holdings to the extent of interest in the equity investment which amounted to nil as at March 31, 2019 and December 31, 2018.
Outlook
In eastern Ukraine, Kub-Gas is focused on additional recompletion operations given the success of the O-3 and O-9 recompletions in 2018. The O-7 recompletion was performed in 2019 and is awaiting testing. Three other recompletion opportunities are in the permitting phase. Kub-Gas may drill one additional well in late 2019 on the Makeevskoye Licence and kickoff a 3D seismic program on the WO licence to delineate known structures found from 2D seismic.
In western Ukraine, the Company and its partner plan to start a three well exploration program in the Uzhgorod license in mid 2019 on structures defined by 3D seismic. The three-well program is to be financed 100% by our partner
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HOUSTON, TX / ACCESSWIRE / May 15, 2019 / Cub Energy Inc. ("Cub" or the "Company") (TSX-V: KUB), a Ukraine-focused upstream oil and gas company, announced today its unaudited interim financial and operating results for the three months ended March 31, 2019. All dollar amounts are expressed in United States Dollars unless otherwise noted. This update includes results from KUB-Gas LLC ("KUB-Gas"), which Cub has a 35% equity ownership interest, Tysagaz LLC ("Tysagaz"), Cub's 100% owned subsidiary and CNG LLC ("CNG"), which Cub has a 50% equity ownership interest.
Mikhail Afendikov, Chairman and CEO of Cub said: "We wish to report net income $1.0 million during the three months ended March 31, 2019 and recorded $1.7 million in dividends from its eastern Ukraine investment. Kub-Gas successfully maintained deliverability of over 14 million cubic feet per day during the first quarter of 2019. In western Ukraine, preparatory works are underway for the first three wells on the jointly owned Uzhgorod license, expected to be drilled this year. All three wells are to be financed 100% by our partner. "
Financial Highlights
The Company reported net income of $1.0 million or $0.00 per share during the three months March 31, 2019 as compared to net income of $0.8 million or $0.00 per share during the same period in 2018.
Netbacks of $24.49/boe or $4.08/Mcfe were achieved for the three months March 31, 2019 as compared to netback of $25.93/Boe or $4.32/Mcfe for the comparative 2018 period.
The Company recorded $1.7 million in dividends during the three months March 31, 2019 compared with $1.0 million in dividends in the first quarter of 2018.
Operational Highlights
Kub-Gas recompleted the Olgovskoye-7 ("O-7") well during 2019 and it is currently being tested.
Achieved average natural gas price of $7.11/Mcf and condensate price of $42.57/bbl during the three months March 31, 2019 as compared to $7.16/Mcf and $60.60/bbl for the first quarter of 2018.
Production averaged 895 boe/d (97% weighted to natural gas and the remaining to condensate) for the three months March 31, 2019 as compared to 837 boe/d for the 2018 first quarter.
The Company and its partner plan to drill a three-well exploration program at Uzhgorod in mid 2019, dependent on timing of permitting and weather conditions. To date, the long-lead items for drilling have been delivered and road construction to the drill pads has commenced. The costs for the first three wells are financed 100% by our partner.
In eastern Ukraine, Kub-Gas is focused on additional recompletion operations given the success of the O-3 and O-9 recompletions in 2018. The O-7 recompletion was performed in 2019 and is awaiting testing. Three other recompletion opportunities are in the permitting phase. Kub-Gas may drill one additional well in late 2019 on the Makeevskoye Licence and kickoff a 3D seismic program on the WO licence to delineate known structures found from 2D seismic.
In western Ukraine, the Company and its partner plan to start a three-well exploration program in the Uzhgorod license in mid 2019 on structures defined by 3D seismic. The three-well program is to be financed 100% by our partner.
Supporting Documents
Cub's complete quarterly reporting package, including the unaudited interim financial statements and associated Management's Discussion and Analysis, have been filed on SEDAR (www.sedar.com) and has been posted on the Company's website at www.cubenergyinc.com.
About Cub Energy Inc.
Cub Energy Inc. (TSX-V: KUB) is an upstream oil and gas company, with a proven track record of exploration and production cost efficiency in Ukraine. The Company's strategy is to implement western technology and capital, combined with local expertise and ownership, to increase value in its undeveloped land base, creating and further building a portfolio of producing oil and gas assets within a high pricing environment.
For further information please contact us or visit our website: www.cubenergyinc.com
Mikhail Afendikov Chairman and Chief Executive Officer (713) 677-0439 mikhail.afendikov@cubenergyinc.com
Patrick McGrath Chief Financial Officer (713) 577-1948 patrick.mcgrath@cubenergyinc.com
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May 2019 - Update Company Presentation & Fact Sheet
Regarding KUB, the new Ukrainian president today said his top priority is peace with the rebels in Eastern Ukraine. This means if it happens, the area will be secured and KUB can drill without any worry or issue. This also includes investors looking at the company in a different light and bringing back value, especially since Cub Energy trades at a major discount compared to it's earnings and growth potential through drilling.
I was referred to some interesting notes regarding KUB and I missed this because it was in the financials as a note and not the MD&A. Keep in mind that Cub Energy Inc holds 35% of KUB Holdings and increasing that to 40%(5% increase) would be a significant revenue boost given current production AND all the wells being worked on now.
Per Note 1, the Company has the ability to further increase its ownership interest in KUB Holdings from 35% to 40% on meeting certain benchmarks and optional payments. The Company can earn an additional 2.5% ownership interest when the majority owner of KUB Holdings has received a cumulative $25,000 in dividends from KUB Holdings of which they have received $16,873 as at March 31, 2019. The Company also has an option to purchase, within one year of the above-mentioned 2.5% transfer from the majority owner, a further 2.5% ownership interest in KUB Holdings at a price equal to 2.5% of the net present value of 2P reserves of KUB-Gas at a 10% discount at the time of exercise.
Another note to follow given the excess of cash in the bank for KUB.V:
During the year ended December 31, 2018 and the three months ended March 31, 2019, the Company purchased Guaranteed Investment Certificates with a Canadian financial institution with annual interest rates between 2.26% and 2.5% that are redeemable at any time
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Vermilion, Aspect and EPH submitted bids for oil and gas acreage in Ukraine & Ukraine boosts gas imports by 19% in Jan-May 2019
Note - Chen fails to mention the RK field requiring the NRU unit. This well was producing 400boed and 100% owned by Cub Energy. Once in production later this year, it can increase significant cash flow.
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June 19th 2019 Interview: Majors expected back in hunt for Ukraine gas as activity picks up
London — International energy majors will be tempted back to Ukraine to drill for gas in the future, according to the head of the country's gas industry association, on the back of a period of intense exploration activity in the eastern European nation.
Ukraine, whose gas production has been steady at some 20 Bcm/year for the past 25 years, has vast untapped potential in its onshore blocks -- both for conventional and unconventional resources -- as well as in the Black Sea.
New exploration has been hampered in the past by the lack of a transparent licensing process and concern over political instability. But Ukraine is now looking to attract international companies back to the upstream through a series of tenders and license rounds for blocks.
"The majors will come. It is just a matter of time," Roman Opimakh, the executive director of the Association of Gas Producers of Ukraine, said in an interview.
Big hitters such as Chevron and Shell came to Ukraine in the early 2010s in an attempt to develop the country's unconventional gas resources, but none remain.
Drilling resurgence
Despite that, the upstream in Ukraine is enjoying a resurgence with 84 active rigs drilling exploration, development and production wells in the country -- almost half of the 186 rigs operational in Europe -- according to Baker Hughes.
"The number of wells drilled in Ukraine has increased significantly since 2017," Opimakh said. "Many positive reforms have been introduced for the upstream industry in the past two years."
Last year more than 150 wells were spudded, mostly in eastern Ukraine where reserves are located at deeper intervals of more than 5,000 meters.
"The domestic fleet of rigs has been modernized and sophisticated rigs are coming to replaced outdated equipment," Opimakh said, adding that foreign outsourced contractors were also contributing resources.
The increased activity could help Ukraine boost its domestic gas production as the government looks to eliminate imports, which currently all come from Europe after it halted direct Russian gas purchases in November 2015. Domestic gas production has edged up in recent years, reaching 20.9 Bcm in 2018.
Opimakh expected it would take "5-6 years" for Ukraine to become self-sufficient in gas -- meaning Ukraine could produce all the gas it needs by 2024 -- assuming annual demand remained in the range of 30-32 Bcm.
In a bid to boost exploration yet further, some 36 blocks have been offered in 2019 in two tenders for 50-year production sharing agreements and three license rounds for 20-year exploration contracts.
The PSA tenders have attracted the most international interest, with bids from Canada's Vermilion Energy, US-based Aspect Energy, Slovakia's Nafta and Poland's Unimot.
The deadline for bids for the nine onshore blocks was May 28 and for the offshore Dolphin block was June 12, with results of both expected within one month of their deadlines (June 28 and July 12, respectively).
Opimakh said four companies had submitted bids for the Dolphin block, located in the shallow waters of the Black Sea.
"There is significant interest, especially taking in account ongoing political elections in Ukraine," he said.
License rounds
As well as the PSA tenders, three rounds of bidding for smaller exploration licenses have been held, hosted on an open electronic platform to ensure full transparency following accusations of wrongdoing in previous contract awards to upstream companies in the country.
A total of 26 blocks were offered, with 16 block licenses awarded. Some 10 of the blocks across the three rounds received no bids.
The big winner in the three bid rounds was Ukraine's state-owned UkrGasVydobuvannya (UGV), a subsidiary of Naftogaz Ukrayiny, with a total of 13 blocks awarded.
The other three were awarded to private Ukraine-based upstream companies: Burisma, DTEK, and Yedyna Oil & Gas.
A further six blocks were expected to be auctioned at a later date along with the 10 blocks not awarded in the first three rounds.
The 36 blocks offered so far -- including those in the PSA tenders -- cover a combined acreage of some 25,000 sq km and are all in well-developed petroleum provinces of Ukraine, Opimakh said.
"The chance of making a discovery is high," he said.
Asked what obstacles there were to even more upstream activity in Ukraine, Opimakh said the country still needed to "simplify the access to geological data" to attract more investors.
-- Stuart Elliott, stuart.elliott@spglobal.com
-- Edited by Dan Lalor, daniel.lalor@spglobal.com
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Club members only: Would foreign companies be allowed to extract Ukraine's gas?
Foreign investors are making another attempt to break into Ukraine’s gas production industry. The competition to attract investors to the development of nine oil and gas areas on the terms of production-sharing agreements involves six foreign companies. Foreigners are taking part in the competition for the shelf area: the name of the winning company to be announced no earlier than September. Ukrgazvydobyvannia state-owned enterprise and companies owned by Ukrainian oligarchs also participate in the competition.
Crony gas perspectives
Despite the declarations of the authorities, in recent years not a single major foreign investor was able to enter Ukraine. Permits for the best deposits were concentrated in the hands of the Ukrainian oligarchs and state-owned companies; about a third of them fell into the hands of the speculators. Almost 80% of gas in Ukraine is mined by the state-owned Ukrgazvydobyvannia and the semi-state-owned Ukrnafta (oligarch Igor Kolomoysky maintains control over the company). Private companies have no more than 20% of production – DTEK strategic holding company of oligarch Rinat Akhmetov, companies controlled by Igor Kolomoysky, Regal Petroleum, part of Smart Holding of MP Vadym Novinsky, Geo Alliance of oligarch Viktor Pinchuk, Burisma company of Mykola Zlochevsky.
Related: Poland is ready to connect its gas pipeline to Ukrainian gas transporting system
Another part of special permits is concentrated in the hands of second-hand dealers, who are waiting for the best time to resell the companies. At the same time, these blocks do not operate. According to the State Service of Geology and Mineral Resources of Ukraine, there is about a third of “frozen” special permits.
After world giants Shell and Chevron left Ukraine in 2014-2015, foreign companies in the field of gas production were represented rather modestly. Cub Energy operates in Ukraine, the largest shareholder of which is Mikhail Afendikov, a native of eastern Ukraine, which has become a US citizen. The company implements, in particular, a joint (50 to 50%) project with the Slovak Nafta on the Uzhgorod gas area (301.4 sq. km). Gas production within the framework of this project is not in progress yet: a 3D seismic survey was carried out on the area, which made it possible to estimate possible reserves, three exploration wells were planned to be drilled.
Since 2015, Nafta has been trying to become a party to the production sharing agreement for Yuzivska Square (Kharkiv and Donetsk regions), from which the American Shell emerged. According to the Nadra Ukraine national company, Yuzivska PSA Block is promising for the search for reserves of natural gas, shale gas, the gas of central basin type, methane, oil, condensate, and also coal deposits. Potential reserves of the area are estimated at 148 billion cubic meters of natural gas, 3200 billion cubic meters of shale gas/gas of the central-basin type. The area can give an estimated annual production of more than 10 billion cubic meters.
Related: Russia ready to keep gas transit across Ukraine
In mid-December, Ukraine’s Cabinet approved the transfer of 90% of the rights and obligations of Nadra Yuzivska to the production sharing agreement for Yuzivska PSA Block in favor of Yuzgaz B.V, belongs to entrepreneurs Yaroslav Kinakh and Timothy M. Elliott. Liubomyr Kopchyk, the director of Nafta representative office in Ukraine, voiced the intention to buy out 100% of Yuzgaz B.V from entrepreneurs, which would allow Nafta to enter the project and begin to study and develop Yuzivska PSA Block. The deal has not been completed yet. There are no necessary decisions of the Antimonopoly Committee and the Kharkiv Regional Council. Also, the environmental impact assessment is still not done. According to the World Bank, not only in the hydrocarbon industry but in general in the economy of Ukraine in 2018, foreign investment is only 2% of GDP, which is very small.
Why are foreigners interested in Ukraine’s subsoil?
The interest of foreign companies in the Ukrainian subsoil became obvious after two large-scale projects to attract investors to develop 9 areas on land and one on the Black Sea shelf. The total area of the plots exceeds 20 thousand square meters. The results of the competition on the shelf will be announced no earlier than September. After the major foreign players left in 2015, new ones did not come due to the lack of an attractive investment climate, said Roman Opimakh, Executive Director of the Association of Gas Production Companies of Ukraine.
"For many years, Ukraine had a monopoly of state-owned companies on oil and gas production, and there were practically no auctions for oil and gas subsoil. Moreover, hydrocarbon rent was extremely high. There was no access to the subsoil, regulatory environment, and regulatory systems were unstable, access to land was problematic, local authorities conducted situational blocking of work - these factors have created an unfavorable investment climate," the press service of one of Ukraine’s largest gas producing companies D Fuel and Naftogaz Energy Complex (they participate in a competition to conclude a PSA on Sofiivska and Zinkivska PSA blocks).
Related: Ukrtransgaz claims low tariffs on gas transporting cause lack of funds
The current competition for 9 gas areas is the first serious competition and an attempt to attract an investor, said Vadym Bodayev, the head of the American Sigma Bleyzer Foundation in Ukraine (together with Aspect Energy applied for a PSA competition on Varvynska Block).
In recent years, Ukrainian authorities have done a lot of work to change the regulatory and investment environment in the field of gas production, Yulia Borzhemsk, manager of regulatory policy at DTEK Naftogaz, noted. “They have elaborated the special stabilization clause regarding the fixation of stimulating rents for the period from January 1, 2018, to January 1, 2023,” she stated.
What foreign companies claim to manage Ukrainian subsoil?
Vermilion Energy, the Canadian company, claims for four out of nine development projects on land on a PSA basis. The stock is listed on New York and Toronto stock exchanges. According to Opimakh, the company's main business is concentrated in North America: the region accounts for 62% of Vermilion’s total production. The company operates in 10 more countries: seven of them are located in Europe: France, Germany, the Netherlands, Ireland, Croatia, Hungary, Slovakia. Presented by Vermilion and in Australia. Its market capitalization is $ 5.5 billion. Revenue in 2018 is $ 1.25 billion, profit is $ 240 million. The company has experience in the extraction of traditional and unconventional gas deposits.
Slovakian Nafta together with EPH, a vertically integrated energy-industrial holding, which owns 68% of the company (another 29% is owned by the state of Slovakia), also claims to Sofiyivska PSA Block. EPH is among the ten largest energy companies in Europe. The total installed capacity of generating facilities, including two NPPs located in Slovakia, exceeds 24.3 GW, and the annual production of electrical energy reaches 100.2 TWh.
Pretending to Varvynska Block, Sigma Bleyzer is the largest private equity fund operating in the country with assets of over $ 1 billion. Its founder, Mikhail Bleyzer, emigrated to the United States in 1978, and from the 90s began to conduct business in Ukraine. The most successful and well-known project of Blazer is the creation of Volya Kabel telecommunication company, which has become the largest provider of television and the Internet. The fund withdrew from the project in 2007, selling the company at a price peak for about $ 300 million with an initial investment of $ 12 million. In total, Sigma Bleyzer invested up to 100 million euros in telecommunications. One of the co-investors was the EBRD.
Who else wants to produce gas?
Competition to foreign companies in the PSA competition consists of the largest Ukrainian gas producers. In particular, the company DTEK Naftogaz, which specializes in deep drilling (over 5 thousand meters). Since 2013, the company has increased its gas production in Ukraine three times. DTEK Naftogaz participates in tenders for Sofiyivska and Zinkivska PSA Blocks.
Ukraine’s well-known gas producers Geo Alliance Group of Viktor Pinchuk (claims for Sofiyivska Block), Ukrnaftoburinnia of Igor Kolomoysky, Vitaliy Homutynnik, and Pavlo Fuks (claims for Rusanivska and Zinkivska PSA Blocks) also take part in the competition. Ukrnaftoburinnia also claims on the site “Dolphin,” located on the shelf. Semi-state enterprise Ukrnafta, co-owned by Kolomoysky, also takes part in the competition. Despite the difficult situation with tax debt and regulatory restrictions, the company increased production by 10.1% over 5 months of the current year, producing 481.5 million cubic meters of gas. Ukrnafta filed applications for Rusanivska and Sofiyivska PSA Blocks. Eurogas Ukraine is one of the participants, but there is no information about it, it claims for Zinkivska Block.
Related: Naftogaz comments on Gazprom statements about direct gas supplies contract from Russia
However, the biggest irritation among market participants is caused by Ukrgazdobuvannia, which, in addition to the four areas for which it claims together with Vermilion, has applied for five other areas on land. The claims of Ukrgazdobuvannia in all nine areas are not clear. This is not a private company. According to our information, at least 70 licenses that the company already has are not completely used.
Unofficially, Ukrgazdobuvannia talked about some interests in developing f the shelf. In addition, another subsidiary of Naftogaz, Chornomornaftogaz company, has extensive experience in drilling on the shelf.
Why does Ukraine need foreigners in its gas production?
In such conditions, it is difficult to predict whether foreign investors will be able to win the battle, however. However, if at least one foreign investor concludes a real PSA in Ukraine, there will be many more advantages than disadvantages.
Related: Gazprom: Ukraine will not have time to sign gas contract in 2019
In particular, this will increase the attractiveness of Ukraine in the eyes of other foreign players, who are closely watching the development of the situation. It also activates the demand for services, and in fact, even the processes that occurred in the last 5 years in the country, gave a huge boost to the service market. Over the past three years, such players as Schlumberger, Halliburton, Baker Hughes GE, Weatherford, NOV, Bentec, Crosco, Honghua, National Oilwell Varco, Tacrom, Belarusneft have entered Ukraine over the past three years, Ukrgazdobuvannia press service reported.
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How Ukraine is the 'last frontier market' for investors The Ukraine Reform Conference brings together government and private sector stakeholders to assess the progress of democratic reforms in the region. Lenna Koszarny, CEO of Horizon Capital, a leading private equity firm in Ukraine, joins BNN Bloomberg to discuss how the country is attracting investment.
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The Canadian oil and gas stocks we’ve identified with market caps under $1B have demonstrated strong price momentum of late SmallCapPower | July 18, 2019: Today we have drilled down and discovered four Canadian oil and gas stocks that have seen strong stock-price momentum thus far in 2019. We compared both the 30 day and year-to-date returns of oil & gas companies trading in Canada with a market cap under $1B and pinpointed four companies that have impressed us the most.
*Share prices as at close Tuesday, July 16, 2019, data obtained from S&P Capital IQ
Cub Energy Inc. (TSXV:KUB) – $0.09 Oil and Gas Exploration and Production
Cub Energy has 311,000 gross acres in two prospective basins in Ukraine. KUB is focused on growing its acreage position in strategic basins in Ukraine. Cub aims to develop this asset portfolio to take advantage of natural gas prices by applying western equipment and expertise to prospective and underexplored basins. Learn more about Cub Energy here.
Market Cap: $26.7M 30 Day Return: 30.8% YTD Return: 240% Average 90 Day Trading Volume: 490,000
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KUB will have Q2 results in 2-3 weeks which should be another profitable quarter. On top of that we should get an update on the JV wells in Western Ukraine, the NRU that was worked on this summer and the recompletion wells.
New photos were recently added to the company website showing that things are proceeding with the JV wells as drilling pads are being prepared: http://www.cubenergyinc.com/media_centre/gallery/ Posted by chiliandrillman on :
CUB ENERGY ANNOUNCES NET EARNINGS OF US $0.8 MILLION FOR FIRST HALF OF 2019
Cub Energy Inc. has released its unaudited interim financial and operating results for the three and six months ended June 30, 2019. All dollar amounts are express in United States dollars unless otherwise noted. This update includes results from Kub-Gas LLC ("Kub-Gas"), which Cub has a 35% equity ownership interest, Tysagaz LLC ("Tysagaz"), Cub's 100% owned subsidiary and CNG LLC ("CNG"), which Cub has a 50% equity ownership interest.
Mikhail Afendikov, Chairman and CEO of Cub said: "We are pleased to announce net income $0.8 million during the six months ended June 30, 2019, and receipt of $1.7 million in dividends, plus a further $1.1 million in dividends subsequent to the quarter end. In western Ukraine, the CNG drilling contractor has begun mobilization of the rig for the planned three-well program. All costs for the three wells will be borne 100% by our partner. In addition, in eastern Ukraine, we are pleased to announce that Kub-Gas plans to drill a new well, the M-30 well, in Q4 2019."
Operational Highlights
Achieved average natural gas price of $6.28/Mcf and condensate price of $45.88/bbl during the six months June 30, 2019 as compared to $7.34/Mcf and $65.18/bbl for the comparative 2018 period. Production averaged 873 boe/d (97% weighted to natural gas and the remaining to condensate) for the six months June 30, 2019 as compared to 819 boe/d for the 2018 comparative period. The CNG drilling contractor has commenced mobilization of its rig for the three-well program on the Uzghorod licence. The costs of drilling will be incurred 100% by our partner.Kub-Gas recompleted the Olgovskoye-7 ("O-7") well to the M6v which increased its production to 0.6 million cubic feet of gas per day ("MMcf/d"). The M6v is a relatively small gas reservoir and the current rate is approximately 0.3 MMcf/d. Kub-Gas also recently recompleted two other wells for a combined additional increase of approximately 0.35 MMcf/d in field production. Kub-Gas uses its own completion equipment and personnel.
Financial Highlights
The Company reported net income of $0.8 million or $0.00 per share during the six months June 30, 2019 as compared to net income of $1.4 million or $0.00 per share during the same period in 2018.Netbacks of $20.50/boe or $3.42/Mcfe were achieved for the six months June 30, 2019 as compared to netback of $26.45/Boe or $4.41/Mcfe for the comparative 2018 period. The Company received $1.7 million in dividends during the six months June 30, 2019 as compared to $2.4 million in dividends in the comparative 2018 period. Subsequent to the quarter ended June 30, 2019, the Company recorded an additional $1.1 million in dividends from KUBGAS Holdings.
Three Three Six Six Months Ended Months Ended Months Ended Months Ended June 30, 2019 June 30, 2018 June 30, 2019June 30, 2018 (in thousands of US Dollars) Petroleum and natural gas revenue 77 18 126 18 Pro-rata petroleum and natural gas revenue(1) 2,485 3,354 5,937 6,781 Revenue from gas trading(2) 2,975 3,079 7,454 8,749 Net income (loss) (205) 596 757 1,375 Income (loss) per share - basic and diluted (0.00) 0.00 0.00 0.00 Funds generated from operations(3) 678 596 643 993 Capital expenditures(4) 9 77 9 211 Pro-rata capital expenditures(4) 302 526 358 861 Pro-rata netback ($/boe) 16.19 26.98 20.5 26.45 Pro-rata netback ($Mcfe) 2.70 4.50 3.42 4.41 June 30,2019December 31, 2018
Cash and cash equivalents 7,429 7,236 Notes:Pro-rata petroleum and natural gas revenue is a non-IFRS measure that adds the Company's petroleum and natural gas revenue earned in the respective periods to the Company's 35% equity share of the KUB-Gas natural gas sales that the Company has an economic interest in.During the three and six months ended June 30, 2019, the Company recorded $2,975,000 (2018 - $3,079,000) and $7,454,000 (2018 - $8,749,000) in revenue for gas trading and $2,616,000 (2018 - $2,877,000) and $6,856,000 (2018 - $8,393,000) for the cost of the sales for a net profit from gas trading of $359,000 (2018 - $202,000) and $598,000 (2018 - $356,000), respectively.Funds from operations is a non-IFRS measure and is defined as cash flow from operating activities, excluding changes in non-cash working capital.Capital expenditures includes the purchase of property, plant and equipment and the purchase of exploration and evaluation assets. Pro-rata capital expenditures are a non-IFRS measure that adds the Company's capital expenditures in the respective periods to the Company's 35% equity share of the KUB-Gas and 50% equity share of CNG Holdings capital expenditures that the Company has an economic interest in.
Management Change
Effective September 1, 2019, subject to regulatory approval, the Company has appointed Sergey Panchuk as Chief Operating Officer, replacing Kerry Kendrick. Mr. Kendrick will remain with the Company as a senior advisor. Mr. Panchuk is a mechanical engineer and previously served as the Chief Executive Officer of Kub-Gas from 2006 to 2017. During Mr. Panchuk's tenure at Kub-Gas, the company grew to be the third largest private oil and gas producer in Ukraine. Since 2017, Mr. Panchuk, a resident of Ukraine, has been overseeing the Company's working interests in Ukraine.
Supporting Documents
Cub's complete quarterly reporting package, including the unaudited interim financial statements and associated Management's Discussion and Analysis, have been filed on SEDAR (www.sedar.com) and has been posted on the Company's website at www.cubenergyinc.com. About Cub Energy Inc.
Cub Energy Inc. (TSX-V: KUB) is an upstream oil and gas company, with a proven track record of exploration and production cost efficiency in Ukraine. The Company's strategy is to implement western technology and capital, combined with local expertise and ownership, to increase value in its undeveloped land base, creating and further building a portfolio of producing oil and gas assets within a high pricing environment.
A lot of investors are still ignorant to the fact that Russia will be cutting off Ukraine's natural gas in 4 months. Don't have to be an economist to understand supply/demand metrics here and that prices will sky rocket in that country, making producers like Cub Energy extremely important.
Kyiv Pursues Additional Reverse Gas Flows In Preparation For Potential Russian Gas-Transit Cutoff
August 20, 2019 05:36 GMT
Ukraine's state-run gas-transport company, Ukrtransgaz, is preparing to open another reverse-flow point for the import of an additional 1.5 billion cubic meters (bcm) of natural gas by January 1 in anticipation of Russia halting gas transit through the country when their contract expires at the end of the year.
In an August 19 news release, pipeline operator Ukrtransgaz said the fuel will come from Romania via Ukraine's shared border with Moldova, where gas-metering stations will be upgraded on both sides to accommodate the expected volume of gas.
"For Ukraine and Moldova, this project is of strategic importance, because by diversifying the gas-supply routes, both states will increase their dependability and the uninterrupted supply of gas to their customers," Ukrtransgaz said.
The additional volume is the equivalent of 15 percent of last year's total imports.
However, the 50-kilometer stretch of the modernized gas line will cross Transdniester, Moldova's pro-Russian breakaway region. Ukrtransgaz didn't focus on the issue of Russia possibly interfering with this gas flow.
Since Ukraine's gas-transportation system is designed for output, pipelines need to be upgraded to open so-called reverse gas flows.
Ukraine already receives gas this way from Slovakia, Poland, and Hungary. Kyiv stopped importing gas from Russia in November 2015 after Moscow invaded Ukrainian territory and annexed its Crimean Peninsula the previous year.
Ukrtransgaz said it was currently in talks with its Romanian counterpart, SNTGN Tansgaz, as well as other countries to receive the gas from the Trans-Balkan pipeline.
In 2018, Ukraine imported 10.6 billion cubic meters of gas, or one-third of what the country consumed.
Fears that Russia's Gazprom will completely stop gas transit through Ukraine next year, when Moscow's Nord Stream 2 pipeline network goes online, are forcing Ukraine to store higher volumes of gas in underground storage facilities ahead of winter.
Ukrtransgaz operates 12 gas-storage facilities that have a total capacity of 31 bcm.
The company has completed upgrading five gas compressor stations that will allow them to pump gas from reservoirs in western Ukraine to eastern and southern Ukraine.
The pipeline operator is owned by state-run Naftogaz Group, a vertically-integrated oil and gas company.
Posted by chiliandrillman on :
Cub Energy's CNG begins drilling Uzhgorod-101 well
2019-09-16 06:29 MT - News Release
Mr. Patrick McGrath reports
CUB ENERGY ANNOUNCES SPUDDING OF FIRST OF THREE WELLS IN WESTERN UKRAINE
CNG LLC, Cub Energy Inc.'s 50-per-cent-owned subsidiary which owns and operates the western Ukraine Uzhgorod licence, has commenced drilling of the Uzhgorod-101 (U-101) well. This is the first well in a three-well drill program for which all costs will be borne 100% by our partner, NAFTA International B.V. ("NAFTA"). The average planned depth of the wells is in range from 1,500 to 1,900 metres to evaluate several prospective horizons identified by 3D seismic.
Mikhail Afendikov, Chairman and CEO of Cub said: "The spudding of the U-101 well is a major milestone for Cub. This is a cumulative effort between Cub and NAFTA as we performed 3D seismic, generated an inventory of prospects and are now executing with the drilling of our first exploratory well. These wells all qualify for the reduced 12% royalty."
The Uzhgorod licence encompasses approximately 75,000 gross acres. The licence adjoins Cub's 100%-owned producing RK field and is near the producing Ptruksa field located on the Slovakian side of the border.
About Cub Energy Inc.
Cub Energy Inc. (TSX-V: KUB) is an upstream oil and gas company, with a proven track record of exploration and production cost efficiency in Ukraine. The Company's strategy is to implement western technology and capital, combined with local expertise and ownership, to increase value in its undeveloped land base, creating and further building a portfolio of producing oil and gas assets within a high pricing environment.
Then I also saw on Vermillion Energy's website that they are partnered in Slovakia with NAFTA, the same partner KUB has right now, drilling the JV wells in the West.
In Slovakia, we have partnered with NAFTA, the country's dominant E&P in a farm-in arrangement which grants us a 50% working interest to jointly explore 490,000 acres across two licenses. In Ukraine, we have been awarded two exploration licenses in a 50/50 partnership with Ukrgazvydobuvannya ("UGV“), a Ukrainian state owned gas producer: https://www.vermilionenergy.com/our-operations/europe/central-eastern-europe.cfm
The point here is that Vermillion is likely to buy Cub Energy down the road for their production and large lease holdings.
Posted by chiliandrillman on :
Diesel began to look for new gas deposits in Ukraine
The depth of all three wells will be in the range of 1500 - 1900 meters.
18 Sep 2019 at 14:15 TASR
BRATISLAVA. Nafta has started exploration license and is looking for gas fields in western Ukraine.
Together with American company Cub Energy Inc. announced the launch of the first of three planned exploration wells under the Uzhgorod license.
Reducing dependence on imports
The depth of all three boreholes will be in the range of 1500 - 1900 meters, the company said on its website.
The Slovak company thus helps Ukraine to reduce its dependence on Russian gas imports.
Under the license Uzhhorod Nafta with Cub Energy conducted a 3D seismic survey over an area of ​​118 square kilometers. As a result, several prospective sites were identified.
"We consider working with Cub Energy Inc. to be a successful start to our foreign activities. We particularly appreciate that this partnership has given the opportunity to showcase our extensive experience in areas such as geology, bearing engineering and drilling," said Nafta CEO Martin Bartosovic.
Mining license
Cub Energy Inc. acquired a 20-year mining license in Uzhgorod covering an area of ​​approximately 300 square kilometers in March 2016.
Diesel, through its subsidiary Nafta International BV, entered the Ukrainian market after acquiring 50% of Uzhgorod license three months later.
Uzhgorod license is a geological continuation of already explored areas in eastern Slovakia and follows the trend of discovered deposits in Slovakia.
Nafta is the sixth largest operator of gas storage facilities in Europe and also a Slovak leader in the exploration and production of hydrocarbons.
The company is active in Central European countries and is present in the Czech Republic, Germany and Austria in addition to Slovakia and Ukraine .
Posted by chiliandrillman on :
New Video From Cub Energy Showing Western JV Well Sites & Drilling
Cub finds trace natural gas in first Uzhgorod well
2019-10-21 14:28 MT - News Release
Mr. Mikhail Afendikov reports
CUB ENERGY ANNOUNCES UPDATE ON DRILLING OF WELLS IN WESTERN UKRAINE
Cub Energy Inc. has released results of the drilling of the first well in the Uzhgorod drilling program. The Uzhgorod-101 well showed that the prospective reservoir sands were water saturated with traces of natural gas that indicate there was gas migration, but no viable trapping mechanism in this particular prospect.
CNG LLC, Cub's 50-per-cent-owned subsidiary, which owns and operates the western Ukraine Uzhgorod licence, obtained valuable subsurface geological and petrophysical data from the U-101 well that will be used to refine the seismic mapping and geo-modelling prior to drilling additional wells on the licence. This upcoming study may result in revising the drilling priorities for the identified prospect inventory. CNG has released the drilling rig while these new data are being analyzed.
The Uzhgorod licence encompasses approximately 75,000 gross acres. The licence adjoins Cub's 100-per-cent-owned producing RK field and is near the producing Ptruksa field located on the Slovakian side of the border. The U-101 well was the first well in a planned three-well drill program for which all costs will be borne 100 per cent by Cub's partner.
About Cub Energy Inc.
Cub Energy is an upstream oil and gas company, with a proven record of exploration and production cost efficiency in Ukraine. The company's strategy is to implement western technology and capital, combined with local expertise and ownership, to increase value in its undeveloped land base, creating and further building a portfolio of producing oil and gas assets within a high-pricing environment.
Ukrainian government troops and Russian-backed separatists have begun withdrawing from a key front-line area in eastern Ukraine.
"The separation of forces in Zolote is happening right now," Ukrainian Foreign Minister Vadym Prystaiko said.
A separatist official quoted by Russia's RIA news agency said both sides had fired coloured signalling rockets to mark both sides' withdrawal.
A deal was agreed this month to end the Donbas region's five-year conflict.
Under the deal, both sides were to start withdrawing from their positions in the towns of Zolote and Petrivske on 9 October.
But there were skirmishes between Ukrainian police and war veterans, who tried to prevent the troop pullout.
Will a deal with Russia bring peace to Ukraine? On 26 October Ukrainian President Volodymyr Zelensky visited the scene and ordered the war veterans to disarm.
Mr Prystaiko said shooting in Zolote stopped on 17 October and the withdrawal began on Tuesday once OSCE international monitors were there to check compliance by both sides.
Ukraine's military high command confirmed that the withdrawal had begun at 12:00 local time (10:00 GMT).
Image copyrightGETTY IMAGES Image caption Military representatives from both sides arranged the withdrawal with the OSCE How did this peace deal come about? For at least two years the fighting has been much less intense than back in 2014.
There have been daily exchanges of fire, but the front line has remained generally static.
A framework ceasefire deal was agreed in February 2015 - the Minsk agreement - but was soon violated as fighting resumed.
This year there have been several significant moves towards a peace settlement:
President Zelensky was elected by a big majority, having set a Donbas peace deal as his number one priority In June, Ukrainian troops and separatists withdrew a kilometre from the front-line town of Stanytsia Luhanska In September, a long-awaited prisoner swap with Russia was finally completed On 1 October, Ukraine, Russia and the separatists agreed a deal to bring special status to the separatist-held parts of Donetsk and Luhansk regions (jointly called the Donbas) What could be the next steps? Mr Prystaiko said that if the Zolote disengagement goes according to plan, both sides will also withdraw from their positions in Petrivske within the next 10 days.
He also voiced hope that, next month, President Zelensky would meet Russian President Vladimir Putin for peace talks, mediated by the leaders of France and Germany, in what is known as the Normandy format.
"Several times already it was postponed for technical reasons, but you see how complicated all this is," he told reporters on Tuesday. "We are doing all we can to make this meeting happen."
Media captionSurviving the chaos in Ukraine - and living with the memories The new impetus stems from a plan proposed in 2016 by Germany's then-foreign minister, Frank-Walter Steinmeier, calling for: free and fair elections in the east under Ukrainian law; verification by the OSCE international security organisation; and self-governing status for Donetsk and Luhansk in return.
What triggered the conflict? Pro-Russian separatists seized control of large swathes of Donetsk and Luhansk regions in April 2014, just after Russia's annexation of Ukraine's Crimea peninsula.
It was an insurgency against the new pro-Western authorities in the capital Kyiv, who had ousted the pro-Russian President Viktor Yanukovych in street protests dubbed the "Maidan Revolution".
The separatists later declared independence from Ukraine - but no country has recognised their "republics".
Nato and Western intelligence experts have repeatedly accused Russia of sending heavy weapons and combat troops into eastern Ukraine to help the rebels.
Russia denies that, but admits that Russian "volunteers" are helping the rebels.
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Today VET announced results and also put out a company presentation. Information regarding their Ukraine purchase was unknown until now. But if you compare the presentation information and maps below, you can see that Vermilion is very close to Cub Energy. So keeping an eye on both companies for drill results. In truth, it almost makes more sense for VET to acquire KUB since VET shares the same JV in Slovakia(NAFTA) and have similar mineral leases. They also share directors.
Awarded two exploration licenses totaling approximately 500,000 gross acres in Ukraine, in a 50/50 partnership with Ukrgazvydobuvannya ("UGV“), a Ukrainian state owned gas producer ► Partnership includes access to technical data, local drilling fleet, and key infrastructure ► Licenses located in one of Europe’s most prolific natural gas basins, the Dnieper-Donets Basin ► Adjacent to several existing multi-TCF gas fields ► Limited application of modern exploration and exploitation technology ► Production sharing agreement has attractive fiscal regime with gas market priced on European imports at Ukrainian hub (TTF premium) ► Modest back-end capital commitment over a 5-year period
NAFTA became the winner of the tender for Vatazhkivskou license Bratislava, October 31, 2019 - NAFTA, through its subsidiary NAFTA RV LLC in Ukraine, has participated in a tender for Vatazhkiv license. With its bid in the auction succeeded and obtained a license Vantazhkivske near the city of Poltava.
NAFTA has participated in an online auction offering five licenses covering a total area of more than 700 km 2 . According to the official results of the tender, the company was successful with its offer. Once all the conditions and other formal steps have been fulfilled , NAFTA will acquire a license for the exploration and subsequent production of hydrocarbons under that license for 20 years. The main objective of the company is to use its long-term experience, to comprehensively explore the potential of the license and to identify all extractable stocks.
NAFTA has been active in Ukraine since 2016, when it acquired fifty percent of its license for exploration and production of hydrocarbons in the west of Ukraine with CUB Energy Inc. In this exploration region, NAFTA and its partner carried out a 3D seismic survey and in September 2019 began the first exploration well under the Uzhhorod license.
NAFTA is an international company with extensive experience in the field of storage and construction of underground gas storage facilities in Slovakia and also a Slovak leader in the exploration and extraction of hydrocarbons. The company is active in Central European countries and is present in the Czech Republic, Germany, Austria and Ukraine. NAFTA operates underground storage facilities with a total storage capacity of approximately 60 TWh in several countries, making it the 6th largest gas storage operator in Europe, conducting exploration activities and participating in renewable energy storage projects .
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Kremlin Confirms Putin to Take Part in Ukrainian Peace Summit in Paris
Kremlin Confirms Putin to Take Part in Ukrainian Peace Summit in Paris
By Reuters Nov. 18, 2019 Updated 6:28 a.m. ET
MOSCOW — The Kremlin confirmed on Monday that Russian President Vladimir Putin would take part in a four-way international summit in Paris on Dec. 9, an attempt to advance efforts for a peaceful resolution to the conflict in eastern Ukraine.
The French presidency said on Friday that the leaders of France, Germany, Russia and Ukraine would take part. But until Monday the Kremlin had failed to publicly confirm its attendance.
Kremlin spokesman Dmitry Peskov told reporters on Monday that Putin would attend, but declined to discuss what Moscow's expectations for the event were.
(Reporting by Alexander Marrow and Maria Kiselyova; Editing by Andrew Osborn)
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Cub Energy Inc. Financial Results For Nine Months (In US Dollars. Multiple By 1.33 For CAD Value) All information below is available on Sedar
ASSETS Cash: $7,515,000 Prepaid Expenses: $978,000 Receivables: $257,000 Equity Investment: $9,912,000 Property & Equipment: $4,923,000 Non-Current Receivables: $842,000 Total Assets: $24,427,000 (June Asset Value: $23 million, increase of $1.4 million in assets)
Liabilities Payables: $4,022,000 Loan from KUB-Gas: $5,917,000 Shareholder Loan: $2,000,000 - From CEO who owns majority of CUB shares Provisions: $588,000 Total Liabilties: $12,527,000 (June Liabilities: $12.444 million)
MD&A Highlights:
• The Company reported income from equity investment of $2,350,000 during the nine months ended September 30, 2019 as compared to income of $4,953,000 in the comparative 2018 period. • The Company reported net income of $260,000 or $0.00 per share during the nine months September 30, 2019 as compared to net income of $2,508,000 or $0.01 per share during the same period in 2018. • The Company recorded $2,790,000 in dividends during the nine months September 30, 2019 compared with $3,847,000 in dividends in the comparative 2018 period. • Production averaged 824 boe/d (97% weighted to natural gas and the remaining to condensate) for the nine months September 30, 2019 as compared to 826 boe/d for the 2018 comparative period. • Netbacks of $18.49/boe or $3.08/Mcfe were achieved for the nine months September 30, 2019 as compared to netback of $27.22/Boe or $4.54/Mcfe for the comparative 2018 period. • Achieved average natural gas price of $5.85/Mcf and condensate price of $48.43/bbl during the nine months September 30, 2019 as compared to $7.47/Mcf and $59.80/bbl for the same period in 2018. • CNG drilled the U101 well that showed that the prospective reservoir sands were water saturated with traces of natural gas that indicate there was gas migration, but no viable trapping mechanism in this particular prospect. The U101 well obtained valuable subsurface geological and petrophysical data that will be used to refine the seismic mapping and geo-modelling prior to drilling additional wells on the license. This upcoming study may result in revising the drilling priorities for the identified prospect inventory. • Kub-Gas expects to drill a new well called Makeevskoye-30 (“M-30”). The Makeevskoye licence has produced nearly half of the historical production for Kub-Gas. The M-30 well is expected to spud in Q1 2020. • During the quarter ended September 30, 2019, Kub-Gas performed a recompletion of the Olgovskoye18 (“O-18”) well in the B-8-9 reservoir which resulted in a 30% increase in production and the well is now producing at a combined rate of approximately 0.9 million cubic feet per day (“MMcf/d”). KubGas uses its own completion equipment and personnel. • The Company has determined that the Nitrogen Rejection Unit (“NRU”) requires process improvements before it can be deployed to Ukraine. The Company is currently negotiating with engineering firms to complete the required modifications.
Eastern Ukraine KUB-Gas Assets (35%) Kub-Gas expects to drill the M-30 well in Q1 2020. The Makeevskoye licence has produced nearly half of the historical production for Kub-Gas. The M-30 well will target the M-7 horizon. Kub-Gas recompleted the Olgovskoye-7 (“O-7”) well to the M6v which increased its production to 0.6 MMcf/d. The M6v is a relatively small gas reservoir and the current rate is approximately 0.3 MMcf/d. Kub-Gas also recently recompleted two other wells for a combined additional increase of approximately 0.35 MMcf/d in field production. During the quarter ended September 30, 2019, Kub-Gas performed a recompletion of the O18 well in the B-8-9 reservoir which resulted in a 30% increase in production and the well is now producing at a combined rate of approximately 0.9 MMcf/d. Kub-Gas uses its own completion equipment and personnel, so the costs are associated with materials and outside services as needed for particular activities. There are approximately ten other wells with “behind pipe pays” that may be attractive recompletion opportunities in the Olgovskoye License. As the currently producing intervals deplete, the production team can recomplete these additional zones in the existing wells. On the West Olgovskoye licence, Kub-Gas expects to commence a 270 km2 3D seismic program in 2020 to delineate known structures found from 2D seismic.
Western Ukraine CNG Assets (50% Interest) In western Ukraine, CNG drilled the U101 well that showed that the prospective reservoir sands were water saturated with traces of natural gas that indicate there was gas migration, but no viable trapping mechanism in this particular prospect. The U101 well obtained valuable subsurface geological and petrophysical data that will be used to refine the seismic mapping and geo-modelling prior to drilling additional wells on the license. This upcoming study may result in revising the drilling priorities for the identified prospect inventory. The costs of drilling the first three wells will be incurred 100% by our partner.
Western Ukraine Tysagaz Assets (100% Interest) The RK field was temporarily suspended on April 1, 2016 because the nitrogen concentration exceeded the allowable limit stipulated by the gas pipeline operator. The Company is currently selling a modest amount of rich gas from a deep well to evaluate the Mesozoic formation on the RK field. During the nine months ended September 30, 2019, and due to continued delays in the completion of the NRU, the Company and the NRU manufacturer entered into a mutual release agreement, including the release of the arbitration claim, in exchange for the Company taking physical possession of the NRU “as is”. The Company has determined that the NRU requires process improvements before it can be deployed to Ukraine. The Company is currently negotiating with engineering firms to complete the required modifications
Foreign Currency Translation Income/Loss During the third quarter ended September 30, 2019, the foreign currency translation income was $1,832,000 as compared to a loss of $1,721,000 in the comparative 2018 quarter. The foreign currency translation income was $3,011,000 during the nine months ended September 30, 2018 as compared to a loss of $376,000 in the comparative 2018 period. The income and losses relate to the revaluation of the Company’s foreign assets and liabilities from the local currency (Ukrainian, Canadian and European currencies) to the US dollar in accordance with the Company’s accounting policy for the translation of its subsidiaries. The recent foreign currency translation income was primarily the result in the strengthening of the Ukrainian Hryvnya against the US dollar. The carrying value of the assets of the Ukrainian subsidiaries were materially impacted by the volatility of the local currencies in the past. The appreciation/devaluation materially raises/lowers the carrying value of the Ukrainian property, plant and equipment and the value of the equity investment in KUB Holdings. These gains/losses do not impair the ability of those assets or liabilities to perform their intended purpose.
Liquidity, Capital Resources and Financings At September 30, 2019, the Company had a cash balance of $7,515,000 (December 31, 2018 - $7,236,000) and working capital deficit of $1,189,000 (December 31, 2018 – working capital of $3,798,000). The working capital was largely impacted by the Kub Gas loans being classified as current liabilities as a result of callable feature allowing the loans to be called any time before the maturity date of December 31, 2020. The Kub Gas loans amount to $5,917,000. The Company had no long-term debt or capital leases other than the Pelicourt loan. The Company has historically been able to raise funds through the issuance of common shares or debt although there are no assurances funds will be able in the future. The Company has a $2,000,000 secured shareholder loan with Pelicourt, a related party to the Company. The shareholders loan bears interest at 12% per annum payable quarterly and the principal of the shareholder loan is due on January 31, 2021. Pelicourt was granted security over Gastek which indirectly owns the 35% interest in KUB-Gas. The security is available on an event of default and limited only to the amount owing on the shareholder loan including principal and interest. In June 2017, the Company entered into a second shareholder loan agreement with an officer of the Company. The shareholder loan is for $1,000,000 with an annual interest rate of 6% payable monthly. The shareholders loan was repaid in four equal quarterly installments and repaid in full on June 30, 2019. During the nine months ended September 30, 2019, the Company received $2,790,000 in dividends from KUB Holdings as compared to $3,847,000 in dividends in the 2018 comparative period. During the nine months ended September 30, 2019, the Company expended $9,000 on capital expenditures as compared to $219,000 in the 2018 comparative period, which was largely related to the NRU. During the nine months ended September 30, 2019, KUB-Gas incurred approximately $1,226,000 (2018 - $3,444,000) of capital expenditures on property, plant and equipment which was the workovers in 2019 and primarily the NY-3 well in 2018. CNG expended approximately $1,670,000 for drilling the U101 well during the nine months ended September 30, 2019 as compared to $71,000 in the 2018 comparative period. The CNG capital expenditures are largely paid by the company’s 50% equity partner. There remains significant doubt about the ability of the Company to continue as a going concern and meet its obligations as they become due.
Outlook In eastern Ukraine, Kub-Gas is focused on drilling the Makeevskoye-30 (“M-30”) well in Q1 2020 and evaluating additional recompletion operations given the success of recompletions in 2018 and 2019. Kub-Gas expects to commence a 3D seismic program in 2020 on the West Olgovskoye licence to delineate known structures found from 2D seismic. In western Ukraine, CNG is utilizing the valuable subsurface data from the U101 well and refining its model to determine the next drilling priorities. The costs of drilling the first three wells will be incurred 100% by our partner.
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Ukraine and Russia have reached the final stages of an all-for-all prisoner exchange agreement ahead of a key peace summit next month, the RBC news website reported Thursday.
Russia and Ukraine swapped 35 prisoners each in September, a move that appeared to presage a thaw in relations that have been frozen since Moscow annexed Crimea in 2014. Kiev and Moscow said afterward that the sides were working on a fresh prisoner swap ahead of a four-way peace summit on the eastern Ukraine conflict set for Dec. 9.
Ukraine is ready to hand over 250 prisoners in exchange for 100 prisoners held by pro-Russian rebels in eastern Ukraine, RBC cited four unnamed sources familiar with the negotiations as saying.
“The lists have already been agreed and approved,” one of the sources was quoted as saying. “The legal stage is coming to an end.”
The new prisoner swap could be adopted when the leaders of France, Germany, Russia and Ukraine meet in Paris on Dec. 9, a source close to the Ukrainian president told RBC. Still, the source close to Volodymyr Zelenskiy and an unnamed negotiator cautioned that the exchange depends on the outcome of the four-way summit.
The Sept. 7 exchange included Ukrainian filmmaker Oleg Sentsov, the 24 Ukrainian sailors captured by Russia in the Kerch Strait, potential MH17 crash witness Vladimir Tsemakh and Russian journalist Kirill Vyshinsky.
The conflict between pro-Russian rebels and Ukrainian troops in the Donbass has killed 14,000 people since it broke out in 2014, according to the United Nations.
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2020-11-17 15:45 MT - News Release
Mr. Mikhail Afendikov reports
CUB ENERGY ANNOUNCES THIRD QUARTER OF 2020 RESULTS
Cub Energy Inc. has released its unaudited financial and operating results for the interim nine months ended Sept. 30, 2020. All dollar amounts are expressed in United States Dollars unless otherwise noted. This update includes results from Kub-Gas LLC, which Cub has a 35-per-cent equity ownership interest, Tysagaz LLC, Cub's 100-per-cent-owned subsidiary, and CNG LLC, which Cub has a 50-per-cent equity ownership interest in.
Mikhail Afendikov, chairman and chief executive officer of Cub, said: "We are pleased to report the two Jenbacher units have arrived on site on the RK field and currently undergoing the installation, commissioning and ultimately connecting to the power grid. The company plans to have the units commercially operative in early 2021."
Operational highlights
Achieved average natural gas price of $3.59/thousand cubic feet (Mcf) and condensate price of $40.33/barrel (bbl) during the nine months Sept. 30, 2020, as compared with $5.85/Mcf and $48.43/bbl for 2019. The decrease is due, in large part, to increased volumes of gas stored in Europe, a warmer-than-expected winter in Europe and the impact of COVID. Production averaged 638 boe/d (97 per cent weighted to natural gas and the remaining to condensate) for the nine months Sept. 30, 2020, as compared with 873 barrels of oil equivalent per day (boe/d) for 2019. In April, 2020, the company has signed a contract for the purchase of two Jenbacher gas power generation engines that should convert the natural gas produced from the RK field into power that can be sold in Western Ukraine at local market rates. The two units were manufactured and delivered to the RK field in late October, 2020, to begin installation and commissioning. Each power generation unit will have the capacity to produce as much as 1.5 megawatts (MW) of power or three MW in total. The RK field was materially suspended on April 1, 2016, and this new plan should result in the restart of the RK field. Financial highlights
The company reported a net loss of $2,274,000 or one cent per share during the nine months Sept. 30, 2020, as compared with net income of $260,000 or zero cents per share during 2019. Netbacks of $9.13/boe or $1.52/Mcfe were achieved for the nine months Sept. 30, 2020, as compared with netback of $18.49/boe or $3.42/Mcfe for 2019. The company has implemented certain cost-cutting initiatives during the second and third quarters of 2020, including the layoff of 11 team members, salary and director fee reductions, the signing of office leases at lower rent levels, and a general decrease in the use of external consultants. Reader advisory
With the current cash resources, negative working capital, suspension of the RK field, uncertainty surrounding the successful installation of the Jenbacher power generation units, fluctuating commodity prices, dividend uncertainty, currency fluctuations, reliance on a limited number of customers and impact on carrying values, the company may not have sufficient cash to continue the exploration and development activities. These matters raise significant doubt about the ability of the company to continue as a going concern and meet its obligations as they become due.
Supporting documents
Cub's complete quarterly reporting package, including the unaudited interim financial statements and associated management's discussion and analysis, has been filed on SEDAR and has been posted on the company's website.
About Cub Energy Inc.
Cub Energy is an upstream oil and gas company with a proven record of exploration and production cost-efficiency in Ukraine. The company's strategy is to implement Western technology and capital, combined with local expertise and ownership, to increase value in its undeveloped land base, creating and further building a portfolio of producing oil and gas assets within a high-pricing environment.
We seek Safe Harbor.
Posted by chiliandrillman on :
New company presentation from Cub Energy below. Keeping in mind that their RK Field project after 5 years will be going into production in the next 60 days. Rather than the RK field producing natural gas, it will now produce electricity (converted from high nitrogen natural gas) which is in more demand and more lucrative in Ukraine. This project is 100% owned by the company and they had to write off tens of millions of dollars in the past because they couldn’t get their NRU unit completed. Therefore, this will add tremendous shareholder value once producing, as it should be added back to the balance sheet as a productive asset. Below is information on the two RK wells which both produced over 2MMCF, or a total of 777boed. http://www.cubenergyinc.com/_resources/corporate-presentation.pdf Cub Energy Annual Information 2020 Page 27: RK field: proven commercial production currently shut-in since April 1, 2016 due to its inability to meet pipeline specifications; but began selling rich gas from a deep well (RK1) in the Mesozoic formation resulting in minor production in 2017, 2018 and 2019. Given the low rate of production for the past three years and unspecified future date of commercial production, proven reserves are classified as contingent resources should commercial production begins again. Cub Energy 2019 Management Discussion (Released March 2020) There were impairment charges that impacted net losses in 2019. During the quarter ended December 31, 2019, the Company recorded impairment charges due to the carrying value of its petroleum and natural gas assets exceeding the net present value of expected future cash flows using a discount rate of 26%. The high discount rate relates to the local discount rate in Ukraine and related country risk at that time. During the fourth quarter of 2019, the Company took a $5,014,000 impairment charge relating to the RK field and an impairment on its equity investment in Kub Holdings of $5,864,000. During the year ended December 31, 2017, the Company recorded impairment charges due to the carrying value of its petroleum and natural gas assets exceeding the net present value of expected future cash flows using a discount rate of 26%. The high discount rate relates to the local discount rate in Ukraine and related country risk. During 2017, the Company took a $5,300,000 impairment charge relating to the RK field and an impairment on its equity investment in Kub Holdings of $10,700,000. News Release Cub Energy Inc. Q4 Operations Update and RSU Grant Houston, Texas – January 23, 2015 – Cub Energy Inc. (“Cub” or the “Company”) (TSX-V: KUB) announces fourth quarter production and operational update, including a 2014 exit rate of approximately 2,407 barrels of oil equivalent (“boe/d”) (a 16% increase over the Company’s 2013 exit rate of 2,070 boe/d). This update includes ongoing operations from KUB-Gas LLC (“KUBGas”), which Cub has a 30% ownership interest, and Tysagaz LLC (“Tysagaz”), Cub’s 100% owned subsidiary. Fourth Quarter Production Average production for the fourth quarter was approximately 2,112 boe/d, representing a 3% decrease from 2,174 boe/d in the third quarter of 2014 and a 25% increase over the 2013 fourth quarter average production of 1,687 bod/d. Production for the first 20 days of January has averaged 2,063 boe/d. Production increased in the fourth quarter as a result of the Rusko-Komarovske 23 (“RK-23”) well that tested gas at a rate of over 2.3 million cubic feet per day (“MMcf/d”) through an eight millimetre choke in November 2014 and was subsequently tied in. The RK-23 well is 100% owned and operated by Cub in western Ukraine. The RK-23 well produced an average of 2.1 MMcf/d during the latter half of the fourth quarter. Production at KUB-Gas decreased during the fourth quarter by approximately 11% substantially due to: • The existing surface facilities are having difficulty meeting sales gas dew point specifications, and some wells have been choked back. This will be addressed with new compression in the Olgovskoye field due to be installed in May 2015. • The M-16, M-17 and O-12 wells were shut in for approximately three days each for their annual build-up tests. • M-16 was shut in in November to recomplete the well to the S5 zone, as it was determined that the M-17 well is capable of fully draining the S6 pool in which both wells were originally completed. M-22 Drilling Update and RK-21 Workover As previously disclosed, the KUB-Gas M-22 well reached TD in late December, and logs and drilling data indicate 18 metres of net pay in two zones, including the S13a, which has not been previously tested in the area. The well also encountered four other zones with aggregate thickness of 22 metres that have resource potential. The well has been cased and completion and testing is ongoing. A flowline was pre-built earlier in 2014, and the tie-in is anticipated to be finished by the first quarter of 2015, pending regulatory approvals. The RK-21 well, originally completed in a single zone in May of 2014, indicated the presence of a number of potentially productive intervals that could be added to maintain a steady rate of production from the well. Rather than completing all of the intervals at the same time, management decided to open additional intervals to maintain a reasonable steady production 2 stream from the well. Recently, the company added the fourth, fifth and sixth sets of perforations to the well. The well responded favorably by displaying an immediate increase in flowing tubing pressure with a corresponding increase of production from a 5-day average of 0.8 MMcf/d to over 2.6 MMcf/d for the subsequent 5-day period. These perforations were added over a two-day period at small incremental cost.
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Ukraine natural gas prices are back to $7.50 an MCF as per the link below.
If you look at past prices and profitability, Cub Energy was making good money when pricing was over $7 an MCF. Add in the cost cut measures put in place this year and the RK field about to go into production, there is some good upside coming.
January 2021 7 540,06 7 443,85 7 573,23 December 2020 6 329,75 5 943,76 6 344,48 November 2020 6 101,31 6 186,71 6 039,92 October 2020 5 983,81 6 051,61 5 555,96 September 2020 4 702,90 4 521,84 4 853,50
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No cheap gas in 2021: Why Ukraine cannot increase blue fuel production?
EU to offer gas plants a green finance label, under certain conditions
The European Union plans to label some gas power plants as sustainable investments, after an initial proposal to deny them a green label faced a backlash from a group of 10 EU member states.
The European Commission’s new proposal, shared with EU countries on Saturday, would class gas-fuelled plants that generate power plus heating or cooling as a green investment if strict conditions on emissions are met and they are operating by 2025.
The EU’s updated proposal for gas plants is part of its Sustainable Finance Taxonomy, which defines what economic activities can be marketed in Europe as sustainable investments from next year. The full text of the proposal was published online by specialised news site Contexte.
The Commission declined to comment on the draft proposal. It plans to finalise the sustainable finance rules by April 21.
The EU’s aim is to steer more capital into environmentally friendly projects to help it deliver on its plan to rapidly slash the greenhouse gas emissions causing climate change.
But the taxonomy has become mired in disputes between EU countries over how to treat investments in natural gas, forcing the Commission to rewrite its original proposal from November.
Natural gas, a fossil fuel, produces roughly half the carbon dioxide (CO2) emissions of coal when burned in a power plant and countries such as Poland and Germany plan to use gas to wean themselves off the more polluting fuel.
However, gas is not emissions-free and there are growing concerns that leaks of potent planet-warming methane from gas infrastructure could cancel out the benefits of switching to gas from coal.
Strict conditions
Under the draft plan, gas plants that generate power and also provide heating or cooling can be classed as a green investment if they replace a high-emitting fossil fuel-based facility and result in a cut in greenhouse gas emissions of at least 50% per kilowatt hour (kWh) of energy produced.
The gas plant must be operating by 2025, have the potential to use low-carbon fuels in future, and emit no more than 270 grams of CO2 equivalent per kWh of energy.
For plants only producing power, or those that also provide heating or cooling but do not replace a more polluting plant, the Commission stuck to its plan to restrict the green label to plants with life-cycle emissions below 100g of CO2 equivalent per kWh, according to the draft document.
That means gas power plants operating now would need to add technology to capture their emissions to qualify.
Sean Kidney, chief executive of the Climate Bonds Initiative, said it was a major win for climate action that the Commission had not weakened this 100g emissions limit.
“That is a key marker for electricity generation that we need to spread globally,” said Kidney, a member of the EU’s advisory group on the sustainable finance taxonomy.
James Watson, secretary general of gas industry group Eurogas, declined to comment on the draft proposal but said the 100g limit was a barrier to switching to gas from coal.
“The taxonomy must leverage all viable technology, including highly efficient gas-fired solutions and renewable and low-carbon gas-ready units,” Watson said.
The new proposal aims to placate countries split over the finance rules, as it would take a majority of the bloc’s 27 members to veto them.
A group of 10 EU countries, including Bulgaria and Poland, had urged the Commission to label gas power as green by giving plants a feasible threshold they could meet.
States including Denmark and Spain, however, have warned Brussels not to weaken its initial plan to deny gas a green label.
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Cub Energy Announces Appointment of Board Member and Power Generation Update
Houston, Texas – March 23, 2021 – Cub Energy Inc. (“Cub” or the “Company”) a Ukraine-focused power and upstream oil and gas company, announces the appointment of Eugene Chaban as a member of the board of directors effective immediately. Mr. Chaban has been working with the Company in a management position since 2014 and was appointed Chief Financial Officer on February 2, 2021. Mr. Chaban has worked in the energy sector in Ukraine for over 10 years including oil and gas, power generation and energy trading.
The Company’s two Jenbacher gas power generation engines were successfully tested and installed to the local power grid in February 2021. To commence commercial production, the Company requires government regulatory approval which is still pending and the Company believes will be granted in due course. This should result in the restart of the RK field in western Ukraine.
About Cub Energy Inc.
Cub Energy Inc. is a power and upstream oil and gas company, with a proven track record of exploration and production cost efficiency in Ukraine. The Company’s strategy is to implement western technology and capital, combined with local expertise and ownership, to increase value in its undeveloped land base, creating and further building a portfolio of assets within a high pricing environment.
For further information please contact us or visit our website: www.cubenergyinc.com
Patrick McGrath Interim Chief Executive Officer (713) 577-1948 patrick.mcgrath@cubenergyinc.com
Posted by chiliandrillman on :
Note: $165,000 USD profit for Q4. This is with lower natural gas pricing compared to 2021 and without the RK producing, which is currently awaiting government approval.
Houston, Texas – March 31, 2021 – Cub Energy Inc. (“Cub” or the “Company”) (TSX-V: KUB), a Ukraine-focused upstream oil and gas company, announced today its audited financial and operating results for the year ended December 31, 2020. All dollar amounts are expressed in United States Dollars unless otherwise noted. This update includes results from Kub-Gas LLC (“Kub-Gas”), which Cub has a 35% equity ownership interest, Tysagaz LLC (“Tysagaz”), Cub’s 100% owned subsidiary and CNG LLC (“CNG”), which Cub has a 50% equity ownership interest. Patrick McGrath, Interim CEO of Cub said: “We are pleased to report the two Jenbacher power units arrived on site on the RK field in Q4 2020 and were successfully installed and tested during Q1 2021 and just awaiting final regulatory approval to start selling into the local power grid. While the commercialization has taken longer than expected, we look forward to the commencement of power production. Due to stronger gas trading margins in the fourth quarter of 2020, the Company reported net income of $165,000 during the three months ended December 31, 2020.” Operational Highlights
• Achieved average natural gas price of $3.79/Mcf and condensate price of $41.07/bbl during the year December 31, 2020 as compared to $5.36/Mcf and $49.51/bbl for 2019. The decrease in gas price is in large part due to the impact of COVID-19. To date in 2021, the Company has seen the price of natural gas in Ukraine rebound to the $5/Mcf-$6/Mcf range.
• Production averaged 619 boe/d (97% weighted to natural gas and the remaining to condensate) for the year December 31, 2020 as compared to 784 boe/d for 2019.
• In 2020, the Company has signed a contract for the purchase of two Jenbacher gas power generation engines that should convert the natural gas produced from the RK field into power that can be sold in western Ukraine at local market rates. The two units were manufactured and delivered to the RK Field in the fourth quarter of 2020 to begin installation and commissioning. Each power generation unit will have the capacity to produce as much as 1.5 megawatts (“MW”) of power or 3 MW in total.
Financial Highlights
• The gross profit on the Company’s gas trading business increased to $1,523,000 during the year ended December 31, 2020 as compared to $825,000 in gross profit in 2019.
• The Company reported net income of $165,000 or $0.00 per share during the three months ended December 31, 2020 as compared to a net loss of $11,320,000 or $0.04 per share during 2019. The Company reported a net loss of $2,109,000 or $0.01 per share during the year December 31, 2020 as compared to a net loss of $11,060,000 or $0.04 per share during 2019. Excluding the one-time impairment and provision charges in 2019, the Company would have had net income of $262,000.
• Netbacks of $8.55/boe or $1.43/Mcfe were achieved for the year December 31, 2020 as compared to netback of $15.88/Boe or $2.65/Mcfe for 2019.
• The Company has implemented certain cost-cutting initiatives during 2020, including the layoff of eleven team members, salary and director fee reductions, the signing of office leases at lower rent levels and a general decrease in the use of external consultants.
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Cub Energy Inc. Reports Year-End Reserves for 2020
Houston, Texas – March 31, 2021 – Cub Energy Inc. (“Cub” or the “Company”) (TSX-V: KUB) announces the results of its independent reserves evaluations as of December 31, 2020 on its oil and gas properties in Ukraine. The evaluation was performed on the Company’s 35% working interest in KUB-Gas LLC (“KUB-Gas”) and was conducted by Ryder Scott Petroleum Consultants (“Ryder Scott”), an independent qualified reserves evaluators and auditor (“Reserves Report”).
The 100% owned RK field, held by the Company’s wholly-owned subsidiary Tysagaz LLC, was not subject to a Reserve Report in 2020 given the Company is awaiting the commencement of commercial production at the power generation project which will utilize the gas at the RK field. The Company expects to re-evaluate the reserve category of the RK field in 2021.
Patrick McGrath, Interim CEO of Cub said: “The natural gas price assumptions in the 2020 reserve report were approximately 15%-20% lower than the World Bank forecasts for the same period which had a negative impact on the value of the 2020 reserve results. However, to date in 2021, the Company has seen the price of natural gas in Ukraine rebound to the $5/Mcf-$6/Mcf range. In addition, the Company hopes to have its RK field re-evaluated to a reserve category in 2021 upon the material re-start of the RK field.”
All evaluations were prepared using guidelines outlined in the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook") and are in accordance with Canadian Securities Administrators National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Cub’sNI 51-101 disclosure for the year ended December 31, 2020 is in its Form 51-101 F1 filed on SEDAR www.sedar.com and posted on the Company’s website at www.cubenergyinc.com Posted by chiliandrillman on :
Cub Energy Inc. April 2021 Company Presentation & Natural Gas Pricing In Ukraine
Based on the natural gas pricing in Ukraine, which was substantially lower in 2020 compared to 2021, Cub Energy should have much larger profitable quarters going forward, especially when the RK field begins producing.
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Houston, Texas – April 30, 2021 – Cub Energy Inc. (“Cub” or the “Company”) (TSX-V: KUB), announces it has entered into a share purchase agreement (“SPA”) to sell its 50% interest in CNG Holdings Netherlands B.V. (“CNG”), which in turn owns CNG LLC (Ukraine LLC), the 100% owner of the Uzghorod licence in western Ukraine.
Cub is to receive consideration of €800,000 (US $970,000) for its 50% interest in CNG. The consideration consists of €600,000 (US $728,000) in cash on closing and €200,000 (US $242,000) is a contingent payment on certain future events including a commercial discovery. The closing is subject to certain conditions including Ukraine regulatory approval.
The Company expects the closing in approximately one to two months’ time and will use the cash for general working capital. Patrick McGrath, Cub’s Interim Chief Executive Officer, said “Cub decided to divest its interest in CNG as we view it as a non-core asset that will likely be capital intensive in the near future as it is at the exploration stage.”
About Cub Energy Inc. Cub Energy Inc. (TSX-V: KUB) is a power and upstream oil and gas company. The Company’s strategy is to implement western technology and capital, combined with local expertise and ownership, to increase value in its undeveloped land base, creating and further building a portfolio of producing power and oil and gas assets within a high pricing environment. For further information please contact us or visit our website: www.cubenergyinc.com Patrick McGrath Interim Chief Executive Officer (713) 577-1948 patrick.mcgrath@cubenergyinc.com
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Cub Energy Announces Commencement of Power Generation
Houston, Texas – May 17, 2021 – Cub Energy Inc. (“Cub” or the “Company”) (TSX-V: KUB), a Ukraine-focused power and energy company, announces that its 100% owned subsidiary, Tysagaz LLC (“Tysagaz”), has commenced commercial production of its Jenbacher gas power generation units in western Ukraine.
“Cub is pleased to report it has successfully executed on its power generation plan and has had over ten days of sales into the local power grid” Patrick McGrath, Interim CEO of Cub stated “I would like to thank the Cub team members for their work in bringing the project to fruition and maximizing the value of our RK field. We’ll continue to review additional opportunities in the energy and power sectors.”
The Jenbacher power units are converting natural gas produced from the RK field into power that is being sold into the local power grid. The Jenbacher units can also utilize gas from the nearby pipeline. The power generation units have the capacity to produce as much as 3 megawatts (“MW”) per hour of power. The local power rates are approximately $73/MW per hour and subject to local market fluctuations. The Company also announces the appointment of Patrick McGrath as Chairman of the Company. Mr. McGrath is currently the Interim CEO and a Director.
About Cub Energy Inc.
Cub Energy Inc. (TSX-V: KUB) is a power and upstream oil and gas company. The Company’s strategy is to implement western technology and capital, combined with local expertise and ownership, to increase value in its undeveloped land base, creating and further building a portfolio of producing power and oil and gas assets within a high pricing environment.
For further information please contact us or visit our website: www.cubenergyinc.com
Patrick McGrath Interim Chief Executive Officer (713) 577-1948 patrick.mcgrath@cubenergyinc.com
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Cub Energy obtains $792K (U.S.) loan from Ukraine bank
2021-06-01 12:28 MT - News Release
Mr. Patrick McGrath reports
CUB ENERGY ANNOUNCES UKRAINE BANK LOAN; PARTIAL REPAYMENT OF PELICOURT LOAN
Cub Energy Inc.'s 100-per-cent-owned subsidiary, Tysagaz LLC, has entered into a 650,000-euro $792,000 (U.S.)) loan with a Ukraine bank. The Ukraine bank loan will bear interest at 7 per cent, will mature in November, 2023, and is secured by the Jenbacher power generation units and a general guarantee by the company. Proceeds of the loan will be used to make a principal repayment of $750,000 (U.S.) on the Pelicourt Ltd. shareholder loan that bears interest at 10.8 per cent. The remaining balance on the Pelicourt loan is $900,000 (U.S.) following the prepayment.
"Cub is pleased to establish a banking relationship with a local Ukraine financial institution as it builds out its power generation business," Patrick McGrath, interim chief executive officer of Cub stated. "The loan and concurrent repayment of a similar amount on the Pelicourt loan allows the company to lower its interest rate from 10.8 per cent to 7 per cent and resulting cash savings."
About Cub Energy Inc.
Cub Energy is a power and upstream oil and gas company. The company's strategy is to implement western technology and capital, combined with local expertise and ownership, to increase value in its undeveloped land base, creating and further building a portfolio of producing power and oil and gas assets within a high-pricing environment.
We seek Safe Harbor.
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From Cub Energy's News Letter This Week:
Cub Energy welcomes you to view the below video demonstrating Cub's transition in western Ukraine to power generation. The project is located in the Transcarpathian Basin bordering Hungary, Slovakia and Romania. Cub invested in the power generation business to utilize its existing natural gas field and to supply energy to an area that is underserved. The Company continues to explore further opportunities including clean technology initiatives.
Cub Energy Inc. has released its unaudited financial and operating results for the interim six months ended June 30, 2021. All dollar amounts are expressed in United States dollars unless otherwise noted. This update includes results from Kub-Gas LLC, which Cub has a 35-per-cent equity ownership interest, Tysagaz LLC, Cub's 100-per-cent-owned subsidiary, and CNG LLC, which Cub has a 50-per-cent equity ownership interest.
Patrick McGrath, chief executive officer of Cub, said: "We are pleased to report $1,488,000 in profit from our gas trading business during the six months ended June 30, 2021, which resulted in the company reporting net income of $746,000 for same period. This was the best net income growth in over two years. Other significant accomplishments during the current period include the commencement of commercial production of the new power generation business and entering into an agreement to divest its non-core western Ukraine licence for proceeds of up to approximately $1-million."
Operational highlights
Achieved average natural gas price of $6.50/Mcf (thousand cubic feet) and condensate price of $68.12/bbl (barrel) during the six months ended June 30, 2021, as compared with $2.77/Mcf and $33.01/bbl for the comparative 2020 period. The increase in commodity prices is due, in large part, to a colder European winter, the lessening global impacts of COVID-19 and geopolitical events. The company's two Jenbacher power units were installed and commenced commercial production in the second quarter of 2021. The power generation units produced 2,253 megawatts an hour (MWh) for the period of commencement in mid-May, 2021, to June 30, 2021, at an average price of $73/MWh. Production averaged 532 boe/d (barrels of oil equivalent per day) (97 per cent weighted to natural gas and the remaining to condensate) for the six months ended June 30, 2021, as compared with 648 boe/d for the comparative 2020 period. On April 30, 2021, the company announced it had entered into a share purchase agreement (SPA) to sell its 50 per cent interest in CNG Holdings, which indirectly owns the Uzhgorod licence in western Ukraine. In consideration, the company is to receive 800,000 euros ($970,000 (U.S.)) for its 50-per-cent interest in CNG Holdings. The consideration consists of 600,000 euros ($728,000 (U.S.)) in cash on closing and 200,000 euros ($242,000 (U.S.)) is a contingent payment on certain future events including a commercial discovery. The closing is subject to certain conditions including Ukraine regulatory approval and is expected to close in Q4 2021. Financial highlights
The gross profit on the company's gas trading business increased to $1,488,000 during the six months ended June 30, 2021, as compared with $332,000 in gross profit in the comparative 2020 period. The company reported net income of $746,000 or zero cents per share during the six months ended June 30, 2021, as compared with a net loss of $1.9-million or one cent per share during the 2020 comparative period. Netbacks of $19.17/boe or $3.20/Mcfe were achieved for the six months ended June 30, 2021, as compared with netback of $3.77/Boe or $0.63/Mcfe for the six-month comparative period in 2020.
Reader advisory
With the current cash resources, negative working capital, fluctuating commodity prices, currency fluctuations, reliance on a limited number of customers, the company may not have sufficient cash to continue the exploration and development activities. These matters raise significant doubt about the ability of the company to continue as a going concern and meet its obligations as they become due.
Supporting documents
Cub's complete interim reporting package, including the unaudited consolidated interim financial statements and associated management's discussion and analysis, have been filed on SEDAR and have been posted on the company's website.
About Cub Energy Inc.
Cub Energy is a power and upstream oil and gas company, with a proven record of exploration and production cost-efficiency in Ukraine. The company's strategy is to implement western technology and capital, combined with local expertise and ownership, to increase value in its undeveloped land base, creating and further building a portfolio of assets within a high-commodity-price environment.
We seek Safe Harbor.
Posted by chiliandrillman on :
Cub Energy Inc. Q2 2021 Financials + MD&A (All Information Can Be Found On Sedar)
Ticker Symbols: KUB.V & TPNEF.OTCQB Price: $0.015 Common Shares: 314,215,355 Market Cap: $4.71 million CAD Insider/Institutional Holdings: 172,466,105 or 55% of common shares Options: 10,900,000 million Most Recent Company Presentation: http://www.cubenergyinc.com/_resources/corporate-presentation.pdf
Financials – All Numbers Are Express In US Dollars (Ending June 30, 2021)
LIABILITIES Loan From KUB-Gas: $5,243,000 Trade & Other Payables: $3,646,000 Shareholder Loan: $938,000 – owed to prior CEO who also holds nearly half of company stock Bank Loan(Current): $303,000 Bank Loan(Non Current): $454,000 Provisions: $342,000 Total Liabilities: $10,926,000
Quarterly Performance Net Revenue: $2,071,000 – RK field was only producing for half of the quarter Income From Equity Investment: $82,000 Operating Expenses + G&A: $1,670,000 Foreign Currency Loss: $35,000 Comprehensive Income: $448,000
Note: Cub Energy Inc. has now generated three quarters of back to back profits Q4 2020 Profit: $165,000 USD Q1 2021 Profit: $263,000 USD Q2 2021 Profit: $483,000 USD Total Profit Earned In 3 Quarters: $911,000 USD or $1.15 million CDN (based on current exchange rate)
MD&A Highlights For Q2 2021 • The Company reported net income of $746,000 or $0.00 per share during the six months ended June 30, 2021 as compared to a net loss of $1,900,000 or $0.01 per share during the comparative 2020 period. The Company benefited from higher natural gas prices. • Energy generation of 2,253 MWh from the Jenbacher power generation project in Western Ukraine for the period of commencement in mid May 2021 to June 30, 2021 at an average price of $73/MWh. • Netbacks of $19.17/boe or $3.20/Mcfe were achieved for the six months ended June 30, 2021 as compared to netback of $3.77/Boe or $0.63/Mcfe for the six month comparative period in 2020. • Achieved average natural gas price of $6.50/Mcf and condensate price of $68.12/bbl during the six months ended June 30, 2021 as compared to $2.77/Mcf and $33.01/bbl for the comparative 2020 period. The increase in commodity prices is due, in large part, to a colder European winter, the lessening global impacts of COVID-19 and geopolitical events. • Production averaged 532 boe/d (97% weighted to natural gas and the remaining to condensate) for the six months ended June 30, 2021 as compared to 648 boe/d for the comparative 2020 period. • In May 2021, the Company commenced commercial production of its Jenbacher gas power generation units that are converting natural gas produced from its wholly-owned RK gas field into power that is being sold in western Ukraine at local market rates. • On April 30, 2021, the Company announced it had entered into a share purchase agreement (“SPA”) to sell its 50% interest in CNG Holdings, which indirectly owns the Uzhgorod licence in western Ukraine. In consideration, the Company is to receive €800,000 (US $970,000) for its 50% interest in CNG Holdings. The consideration consists of €600,000 (US $728,000) in cash on closing and €200,000 (US $242,000) is a contingent payment on certain future events including a commercial discovery. The closing is subject to certain conditions including Ukraine regulatory approval and is expected to close in Q4 2021. • The company is monitoring recommendations by the public health authorities related to COVID-19 in all its operating regions and is adjusting operational requirements as required. All of the Company's facilities remain fully operational.
Western Ukraine Tysagaz Assets (100% Interest)
The Company commenced power generation in mid-May 2021 through two Jenbacher gas power generation engines that are converting the natural gas produced from the RK field into power that is being sold in western Ukraine at local market rates. The power generation units have the capacity to produce as much as 3 megawatts (“MW”) of power utilizing the 100% owned RK gas field.
Eastern Ukraine KUB-Gas Assets (35%)
There are approximately ten recompletion opportunities with “behind pipe pays” that Kub-Gas is reviewing with one recompletion planned for the third quarter of 2021. As the currently producing intervals deplete, the production team can recomplete these additional zones in the existing wells. Kub-Gas uses its own completion equipment and personnel. Kub-Gas is also planning on drilling an exploration well in 2021 on the Olgovskoye licence (well O-114) to a depth of approximately 2,800 meters that will target multiple zones.
Western Ukraine CNG Assets (50% Interest)
On April 30, 2021, the Company announced it had entered into an agreement to sell its 50% interest in CNG Holdings, which indirectly owns the Uzhgorod licence in western Ukraine. In consideration, the Company is to receive €800,000 (US $970,000) for its 50% interest in CNG Holdings. The consideration consists of €600,000 (US $728,000) in cash on closing and €200,000 (US $242,000) is a contingent payment on certain future events including a commercial discovery. The closing is subject to certain conditions including Ukraine regulatory approval and is expected to close in Q4 2021.
Ukraine Currency
The Ukrainian exchange, the Hryvnya (“UAH”) rate versus the USD was 27.18 UAH/USD at June 30, 2021, which appreciated approximately 5% as compared to the 28.27 UAH/USD at December 31, 2020.
Posted by chiliandrillman on :
1) Positive cashflow from KUB-GAS operations. Still producing over 500+BOED
2) Positive cashflow from the RK field electricity generation (asset value has not been added back yet. Over $10 million written off over the last few years because of this project, but there are reserves they can now add back)
3) Drilling of a new well (mentioned in the presentation + MD&A)
4) Well recompletions (also mentioned in the presentation + MD&A)
5) Rising natural gas prices in Ukraine. Increased commodity price means larger earnings going forward
6) Pending sale of Uzhgorod, which will add around $1.2 million CDN cash back to the books
Posted by chiliandrillman on :
Cub Energy to sell Kubgas stake for $10.6M (U.S.)
2021-09-07 08:12 ET - News Release
Mr. Patrick McGrath reports
CUB ENERGY ANNOUNCES LETTER AGREEMENT FOR SALE OF 35% INTEREST IN KUBGAS
Cub Energy Inc. has entered into a letter agreement dated Sept. 3, 2021, with its partner to sell its 35-per-cent interest in Kubgas Holdings Ltd. The sale is for a deemed consideration of approximately $10.6-million (U.S.). The consideration comprises a cash payment of $2.6-million (U.S.) and the settlement of approximately $8-million (U.S.) in debt that the company owes Kubgas, subject to adjustments on the completion date. The sale terms were negotiated at arm's length with the partner, and closing of the transaction is subject to the parties entering into a definitive agreement and the company obtaining TSX Venture Exchange approval.
Patrick McGrath, chief executive officer of Cub, said: "Cub Energy's founder and former CEO, Mikhail Afendikov, built Kubgas into one of the largest natural gas producers in Ukraine during the 2000s. The company is proud of its success, but it has decided to divest its remaining interest in this asset. The sale will add cash and substantially deleverage Cub's balance sheet by reducing 80 per cent of the company's debt as of the last quarterly financial results. The divesture allows Cub to focus on its 100-per-cent-owned western Ukraine gas assets and its associated power generation business. The company continues to review new opportunities."
About Cub Energy Inc.
Cub Energy is a power and upstream oil and gas company with a proven record of exploration and production cost efficiency in Ukraine. The company's strategy is to implement Western technology and capital, combined with local expertise and ownership, to increase value in its undeveloped land base, creating and further building a portfolio of assets within a high commodity price environment.
We seek Safe Harbor.
Posted by chiliandrillman on :
What does this sudden news release mean for Cub Energy: 1) Cub Energy has de-risked itself politically, as mentioned in the news. This company was getting a huge discount before because of fears that Rebels/Russians would takeover their assets in East. This happened to some assets in 2014, so the fear is justified. This is no longer an issue. 2) Cub Energy has also de-risked itself from a company balance sheet standpoint. Yes the cash flow will be reduced, but who cares about revenue if the liabilities/debt are too high. Natural Gas rates are very good right now, but Cub Energy has gone from almost 1000boed in 2018 to now around half of that. That means even with $500k USD profits, cleaning the books would take several years, assuming gat prices stay above $6 an MCF for the next 5 years, which there’s no certainty. 3) Cub Energy has also sold the Uzhgorod lease for $970,000USD, which means it’s only asset is the RK Field and this is more a utility asset then a regular natural gas producing field. So what does this all boil down to once both asset sales are complete and we are left with cash and the RK field. Lets take the last quarterly results and combine them with what we are expecting from this deal. - Last quarter came out 2 weeks ago and the Assets were at $10.8 million USD($5.14 million being cash) and liabilities were $10.93 million. - Uzhgorod will add $970,000 USD in cash once the deal is completed - Deal announced today worth $10.6 million USD will reduce the debt by $8 million and leave around $2.6 million USD in cash So let’s start adding these up. We don’t know RK’s value, but the company wrote off over $10 million from that asset, so I’m guessing that will be added back, plus the generators that were purchased as assets. That being said, lets assume for a minute that only cash is left on the assets, which is $5.14 million. CASH: $5.14M(current cash on hand) + $0.97M(Uzhgorod) + $2.6M(KUB Gas Sale) = $8.71 million USD or $11 million CAD based on today’s rates. That works out to $0.035c CAD per share just in cash. No value for RK added. Most juniors trade at 2X cash just FYI. DEBT/LIABILITIES: $10.93M –$8M = $2.93M left in Debt/Liabilities. This is clearly mentioned on the news release.
So what are we left with in the end, and this is a rough estimate, as well as assuming both deals close: - $8.71 million USD in CASH - $2.93M million USD in Debt/Liabilities RK Field which is worth quite a bit. Last quarter it cash flowed $178K USD for only half a quarter, so it would be safe to say that $300K cash flow per quarter is realistic, or around $1.2 million USD per year. $178K was revenue from electricity sales and cost on the books show $67K USD, so the margins are good.
Posted by chiliandrillman on :
Cub Energy Announces Third Quarter Results
HOUSTON, TX and CALGARY, AB / ACCESSWIRE / November 29, 2021 / Cub Energy Inc. ("Cub" or the "Company") (TSX-V:KUB), a Ukraine-focused energy company, announced today its unaudited financial and operating results for the interim nine months ended September 30, 2021. All dollar amounts are expressed in United States Dollars unless otherwise noted. This update includes results from Kub-Gas LLC ("Kub-Gas"), which Cub has a 35% equity ownership interest, Tysagaz LLC ("Tysagaz"), Cub's 100% owned subsidiary and CNG LLC ("CNG"), which Cub has a 50% equity ownership interest.
Patrick McGrath, CEO of Cub said: "We are pleased to report $2,138,000 or $0.01 per share in net income during the nine months ended September 30, 2021. The increase in the price of natural gas was the primary contributor to the 2021 financial results. Cub also signed a letter agreement for the sale of its 35% equity interest in Kub-Gas for deemed consideration of $10.6 million. The proposed sale will deleverage Cub's balance and allow Cub to focus on its 100% owned assets and new opportunities."
Operational Highlights
Achieved average natural gas price of $7.66/Mcf and condensate price of $69.16/bbl during the nine months ended September 30, 2021 as compared to $3.59/Mcf and $40.33/bbl for the comparative 2020 period. Production averaged 513 boe/d (97% weighted to natural gas and the remaining to condensate) for the nine months ended September 30, 2021 as compared to 638 boe/d for the comparative 2020 period The power business generated 5,546 megawatts an hour ("MWh") from the Jenbacher power units in Western Ukraine for the period of commencement in mid-May 2021 to September 18, 2021 at an average price of $71/MWh. Due to the recent material increase in natural gas prices and no parallel increase in power prices, the Company has increased its sales of natural gas at the RK field and temporarily suspended the power business as of September 18, 2021 as this strategy is more profitable at present. The Company will continue to monitor the prices of both commodities and utilize whichever one produces the better return for shareholders. On September 7, 2021, the Company announced it had entered into a letter agreement to sell its 35% interest in KUB-Gas for a cash payment of $2,600,000 and settlement of approximately $8,000,000 in debt for total deemed consideration of approximately $10,600,000. The closing of the transaction is subject to the parties entering into a definitive agreement and regulatory approval. The Company continues to work towards closing the sale of its 50% interest in CNG Holdings, which indirectly owns the Uzhgorod licence in western Ukraine. In consideration, the Company is to receive €800,000 for its 50% interest in CNG Holdings. The consideration consists of €600,000 in cash on closing and €200,000 is a contingent payment on certain future events including a commercial discovery. The closing is subject to certain conditions including Ukraine regulatory approval. Financial Highlights
The gross profit on the Company's gas trading business increased to $2,311,000 during the nine months ended September 30, 2021 as compared to $899,000 in gross profit in the comparative 2020 period. The Company reported net income of $2,138,000 or $0.01 per share during the nine months ended September 30, 2021 as compared to a net loss of $2,274,000 or $0.01 per share during the comparative 2020 period. Netbacks of $22.90/boe or $3.82/Mcfe were achieved for the nine months ended September 30, 2021 as compared to netback of $9.13/Boe or $1.52/Mcfe for the nine month comparative period in 2020. (in thousands of US Dollars) Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Revenue from gas trading 2,698 1,255 6,180 4,382 Pro-rata petroleum and natural gas revenue(1) 2,089 659 4,498 2,713 Revenue from sale of electricity 281 - 459 - Petroleum and natural gas revenue 114 37 305 146 Net income (loss) 1,392 (374 ) 2,138 (2,274 ) Income (loss) per share - basic and diluted 0.00 (0.00 ) 0.01 (0.01 ) Funds generated from (used in) operations 330 (232 ) 1,414 (325 ) Capital expenditures(2) - - 352 - Pro-rata capital expenditures(2) 146 - 601 869 Pro-rata netback ($/boe) 31.00 9.11 22.90 9.13 Pro-rata netback ($Mcfe) 5.17 1.52 3.82 1.52
September 30, 2021 December 31, 2020 Cash and cash equivalents 5,385 4,424 Notes:
Pro-rata petroleum and natural gas revenue is a non-IFRS measure that adds the Company's petroleum and natural gas revenue earned in the respective periods to the Company's 35% equity share of the KUB-Gas natural gas sales that the Company has an economic interest in. Capital expenditures includes the purchase of property, plant and equipment and the purchase of exploration and evaluation assets. Pro-rata capital expenditures are a non-IFRS measure that adds the Company's capital expenditures in the respective periods to the Company's 35% equity share of the KUB-Gas and 50% equity share of CNG Holdings capital expenditures that the Company has an economic interest in. For purposes of the pro-rata netback calculation, the Company's profit from gas trading is added to the revenue of Kub-Gas to better reflect the true natural gas price achieved and field netback. Reader Advisory
With the current cash resources, negative working capital, fluctuating commodity prices, currency fluctuations, reliance on a limited number of customers, the Company may not have sufficient cash to continue the exploration and development activities. These matters raise significant doubt about the ability of the Company to continue as a going concern and meet its obligations as they become due.
Supporting Documents
Cub's complete interim reporting package, including the unaudited consolidated interim financial statements and associated Management's Discussion and Analysis, have been filed on SEDAR (www.sedar.com) and has been posted on the Company's website at www.cubenergyinc.com.
About Cub Energy Inc.
Cub Energy Inc. (TSX-V:KUB) is a power and upstream oil and gas company, with a proven track record of exploration and production cost efficiency in Ukraine. The Company's strategy is to implement western technology and capital, combined with local expertise and ownership, to increase value in its undeveloped land base, creating and further building a portfolio of assets within a high commodity price environment. For further information please contact us or visit our website: www.cubenergyinc.com
Patrick McGrath Chief Executive Officer (832) 499-6009 patrick.mcgrath@cubenergyinc.com
Posted by chiliandrillman on :
Cub Energy closes sale of CNG Holdings interest
2021-12-21 10:14 ET - News Release
Mr. Patrick McGrath reports
CUB ENERGY ANNOUNCES CLOSING OF SALE OF CNG INTEREST
Cub Energy Inc. has closed the sale of its 50-per-cent interest in CNG Holdings Netherlands BV, which in turn owns CNG LLC (Ukraine LLC), the 100-per-cent owner of the Uzhgorod licence in western Ukraine, as originally announced on April 30, 2021.
Cub is to receive consideration of up to 800,000 euros ($900,000 (U.S.)) for its 50-per-cent interest in CNG consisting of 600,000 euros ($675,000 (U.S.)) in cash received on closing and 200,000 euros ($225,000 (U.S.)) as a contingent payment on certain future events including a commercial discovery.
Patrick McGrath, Cub's chief executive officer, said, "Cub is pleased to have monetized this asset as part of its strategy to divest non-core assets as it pursues new opportunities."
About Cub Energy Inc.
Cub Energy is a power and upstream oil and gas company, with a proven record of exploration and production cost efficiency in Ukraine. The company's strategy is to implement western technology and capital, combined with local expertise and ownership, to build a portfolio of assets within a high-commodity-price environment.
We seek Safe Harbor.
Posted by chiliandrillman on :
Not sure if anyone has been paying attention to the European Natural Gas crisis, but prices have hit a level that I always thought was impossible to achieve. January pricing is at $73 an MCF, equivalent to $460 USD a barrel of oil equivalent!
We saw the Uzhgorod asset sale close this week, which gives me hope that the subsidiary sale should also close. Reason I believe this will occur is because Burisma is making a fortune right now with their 65% ownership and payback on the acquisition will be quick.
Cub Energy made $1.4 million USD in profit last quarter and the average pricing was $7.66 an MCF. The average from October on has been over $20+ an MCF, this can be seen on page 4 of KUB’s December 2021 Company Presentation:
â–Ş Q1-Q3 2021 average sales price of $7.66/Mcf and a corporate netback of $3.82/Mcfe(1) â–Ş October/November sale price has been closer to $20.00/Mcf
As well, Cub Energy started selling Natural Gas from their RK field rather than electricity because of this. From the financial results press release:
• The power business generated 5,546 megawatts an hour from the Jenbacher power units in western Ukraine for the period of commencement in mid-May, 2021, to Sept. 18, 2021, at an average price of $71 per MWh. Due to the recent material increase in natural gas prices and no parallel increase in power prices, the company has increased its sales of natural gas at the RK field and temporarily suspended the power business as of Sept. 18, 2021, as this strategy is more profitable at present. The company will continue to monitor the prices of both commodities and utilize whichever one produces the better return for shareholders.
Posted by chiliandrillman on :
Cub Energy Announces Closing of Sale of 35% Interest in KUBGAS
Houston, Texas, and Calgary, Alberta – February 2, 2022 – Cub Energy Inc. (“Cub” or the “Company”) (TSX-V: KUB) announces it has closed the sale of its 35% interest in KUBGAS Holdings Limited (“KUB Holdings”). The sale was for a deemed consideration of approximately US $10.9 million. The consideration was comprised of a cash payment of US $2.6 million and the settlement of US $8.3 million in debt. The US $8.3 million in debt was settled in full through the repayment of debt and the simultaneous issuance of US $7.9 million in dividends to the Company with the difference being the applicable withholding taxes. The Company continued gas trading of its 35% interest in KUBGAS through to November 15, 2021.
Patrick McGrath, CEO of Cub said: “The sale of the Company’s eastern Ukraine asset essentially derisks the Company’s eastern Ukraine exposure and eliminates the majority of Cub’s debt. The Company is now focused on its 100% owned western Ukraine assets and will continue to review new opportunities.”
About Cub Energy Inc.
Cub Energy Inc. (TSX-V: KUB) is a power generation and upstream oil and gas company, with a proven track record of exploration and production cost efficiency in Ukraine. The Company’s strategy is to implement western technology and capital, combined with local expertise and ownership, to build a portfolio of assets within an advantaged commodity price environment. For further information please contact us or visit our website: www.cubenergyinc.com
Patrick McGrath Chief Executive Officer (832) 499-6009 patrick.mcgrath@cubenergyinc.com