TPNEF - Cub Energy Inc.

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.

 

https://www.themoscowtimes.com/2019/11/28/russia-ukraine-reach-2nd-prisoner-exchange-deal-rbc-a68356 Russia, Ukraine Reach 2nd Prisoner Exchange Deal – RBC 10 hours ago 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.

 

Ukraine and Russia agree to implement ceasefire

https://www.bbc.com/news/world-europe-50713647

Ukraine and Russia agree to implement ceasefire

2 hours ago

Ukraine and Russia have agreed to implement a "full and comprehensive" ceasefire in eastern Ukraine by the end of 2019, after top-level talks.

Russian President Vladimir Putin and Ukraine's Volodymyr Zelensky met face to face in Paris on Monday.

Five-and-a-half years of fighting between Ukrainian government forces and Russian-backed rebels have cost 13,000 lives.

The negotiations were brokered by the leaders of France and Germany.

They follow a big prisoner swap and the withdrawal of Ukraine's military from three key areas on the front line.

What was agreed?

In a written statement, the countries agreed to the release and exchange of all "conflict-related detainees" by the end of the year.

The two sides also pledged to disengage military forces in three additional regions of Ukraine by the end of March 2020, without specifying which regions would be affected.

Additional talks will be held in four month to take stock of the ceasefire's progress.

At a press conference after the talks in France's Élysée Palace, President Putin hailed the talks as an "important step" towards a de-escalation of the conflict.

President Zelensky said the issue of Russian gas exports via pipelines through Ukraine had been "unblocked" after a dispute about transit tariffs, and an agreement would now be worked out.

But Russia and Ukraine continue to disagree on issues such as the withdrawal of Russia-back troops, and elections in areas of Ukraine held by separatist rebels.

Mr Putin also called for a change in Ukraine's constitution to give special status to the Donbas region, which is held by the rebels.

Ukraine's President Zelensky also told reporters that Ukraine would not make any territorial concessions in exchange for peace.

"We saw differences today," said French President Emmanuel Macron, who hosted the talks with German Chancellor Angela Merkel.

"We didn't find the miracle solution, but we have advanced on it," he added.

 

Ukraine and pro-Russians expected to swap prisoners

https://www.aljazeera.com/news/2019...-expected-swap-prisoners-191228154200501.html

Ukraine president says exchange should take place on Sunday but details of the planned swap are scarce.

7 hours ago

Ukrainian authorities and pro-Russian separatists in the war-torn east of the country are expected to swap dozens of prisoners in a front-line operation on Sunday.

Both sides had said earlier this month they would carry out a prisoner exchange by the end of the year, following high-profile peace talks in Paris aimed at de-escalating Europe's only active war.

"The exchange should be tomorrow. We're all waiting for it," Ukrainian President Volodymyr Zelenskyy said on Saturday, calling it "the most difficult task this year".

Earlier, a spokeswoman for the self-declared rebel republic of Donetsk, Daria Morozova, announced that there was an agreement for the swap.

She said two separatist territories Donetsk and Lugansk will get 87 prisoners, while 55 others will be handed over to Kyiv, without giving details on the identity of those involved.

The prisoner exchange is expected to take place near the town of Gorlivka in the separatist-held Donetsk region in eastern Ukraine's industrial heartland.

Russian media reported that the operation will take place on the front line.

The swap would come three months after Ukraine carried out a long-awaited exchange with Russia of 35 prisoners each.

More than 13,000 people have been killed since pro-Russia fighters in eastern Ukraine launched a bid for independence in 2014, sparking the conflict.

Details of Sunday's exchange were scarce, with officials saying that lists of prisoners were still being agreed.

The Organization for Security and Co-operation in Europe (OSCE) Special Representative, Martin Sajdik, confirmed that preparations for the swap were under way.

Peace talks
At the Paris summit this month, the leaders of France, Germany, Russia and Ukraine agreed to implement a full ceasefire and proceed with a new withdrawal of forces from conflict zones by March 2020.

Russian President Vladimir Putin and his Ukrainian counterpart Zelenskyy also held their first face-to-face talks and agreed on measures to de-escalate the conflict.

The December 9 summit was the first of its kind in three years.

Since coming to power in May, comedian-turned-President Zelenskyy, 41, has sought to revive a peace process to end the separatist conflict.

READ MORE
Putin, Zelenskyy agree to Russia-Ukraine prisoner swap at summit
The Kremlin has sent signals that it is ready to work with Zelenskyy, whom Putin has described as "likeable" and "sincere".

Before the summit, Kyiv and separatists completed a partial troop pullback.

French President Emmanuel Macron said at the time of the Paris meeting a new summit would be held in four months to take stock of progress on ending the conflict.

Countries have sought to revive accords signed in Minsk in 2015 that call for the withdrawal of heavy weapons, the restoration of Kyiv's control over its borders, wider autonomy for Donetsk and Lugansk, and the holding of local elections.

However, there was no sign of warmth between the leaders of Ukraine and Russia in Paris and many doubt whether Putin genuinely wants to settle the conflict.

Speaking in Moscow this month, Putin said if Kyiv gets back control of the border in the east, pro-Russian residents of separatist-held territories could be targeted.

Zelenskyy's peace plan has also been strongly criticised by war veterans and nationalists.

Various nationalist organisations even deployed their own troops to the front line in an effort to prevent a troop pullback in line with peace agreements.

 

NAFTA confirms its interest in the project in eastern Ukraine
Note: As Ukraine heals from years of battling with rebels (recent peace efforts in December), more companies will continue to invest in Ukraine's lucrative oil and gas assets. Over a million acres have been purchased over the last several months between Vermilion Energy, NAFTA and other large cap companies. This bodes well for Cub Energy Inc as the company holds 140,000 acres of mostly producing assets with many drill targets. Below it also mentions the "Uzhgorod license with a partner" this is Cub Energy. NAFTA still has 2 wells to drill at no cost to Cub, along with a dozen other possible targets after that. Add in the NRU project(completed by end of 2020) and the Eastern wells (M30 to start shortly) and we have a wonderful evolving story. Company is well funded and has great cash flow. The sell off in the fall was just a large shareholder from years ago that wanted out, but does not justify the true value of the company at present time.
https://www.nafta.sk/sk/nafta-potvrdzuje-svoje-zaujem-o-projekt-na-vychode-ukrajiny


Bratislava / Prague, 9 December 2019 - NAFTA as, together with the EPH energy group, are continuing their joint efforts to acquire the Yuzivska project in eastern Ukraine.


NAFTA as (NAFTA) and EPPE Power Europe (EPPE) are prepared to jointly develop the Yuzivska project under conditions approved by the Government of Ukraine. Both companies belong to the energy group Energy Industrial Holding (EPH), and were approved by the Interministerial Commission at the Ukrainian Ministry of Energy as investors who meet the technical and financial conditions for the development of the Yuzivska project.


NAFTA will act as a technical operator in the project. The company has been operating in the field of hydrocarbon exploration and extraction for more than 105 years and intends to use the unique know-how it has gained from many projects in the project for many years in its core areas. In addition, NAFTA has been actively operating in Ukraine since 2016, where they are developing a Uzhgorod license with a partner.


“The EPH Group declares a continuing interest in the Yuzivska project and is ready to assume the relevant investment obligations under the approved Production Sharing Agreement (PSA). Our subsidiary EP Yuzivska is ready to sign a PSA approved by the Ukrainian government and EPH is ready to issue a guarantee to the parent company to secure the financial resources needed for the implementation and rapid development of the Yuzivska project immediately after its approval. Since we have a detailed mapping of the project, we can guarantee the timely extraction of hydrocarbons for the Ukrainian market, ” said a source from the EPH Group.


“Yuzivska is a greenfield project associated with a high geological risk and requires extensive research work. We believe that by implementing our know-how, experience and methods, we will be able to uncover the full potential of the license. As part of this project, we are ready to allocate our capacities to Ukraine in order to fully develop this project and ensure increased energy independence of Ukraine, ” said the CEO of NAFTA as

NAFTA as 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 in several countries, conducts exploration activities and participates in renewable energy storage projects. With a total storage capacity of approximately 60 TWh, it is the 6th largest gas storage operator in Europe.

 

Cub Energy unit begins drilling M-30 well

2020-01-28 07:48 MT - News Release

Mr. Mikhail Afendikov reports

CUB ENERGY INC. ANNOUNCES SPUDDING OF THE M-30 WELL IN EASTERN UKRAINE

Cub Energy Inc.'s 35-per-cent-owned KUB-Gas LLC subsidiary, which owns and operates the eastern Ukraine licences, has commenced drilling of the Makeevskoye-30 (M-30) well. The M-30 well is planned to a total depth of 1,985 metres to evaluate several prospective horizons. The M-30 well is financed through existing Kub-Gas cash flow.

Mikhail Afendikov, chairman and chief executive officer of Cub, said: "We are pleased to announce the spudding of the M-30 well in eastern Ukraine. The M-30 well will be the first well drilled on the producing M field in over three years after recent successful recompletions on the M and O fields at Kub-Gas."

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.

© 2020 Canjex Publishing Ltd. All rights reserved.

 

FT: Putin's new Ukraine man lifts hopes of peace progress in Kyiv

10:19, 30 January 2020 WORLD 1577 0 People close to the peace talks said the changes were intended to formalise Mr. Kozak's emergence as Mr. Putin's lead negotiator on Ukraine.

https://www.unian.info/world/108519...an-lifts-hopes-of-peace-progress-in-kyiv.html

Vladimir Putin's promotion of a crucial figure driving peace talks with Ukraine has been welcomed by Kyiv as a signal of renewed willingness in Moscow to resolve the six-year conflict between the two countries. Dmitry Kozak, a former deputy prime minister, was appointed to a newly created position in the presidential administration last week as part of sweeping changes in the Kremlin that analysts said were designed to lengthen Mr. Putin's rule, according to the Financial Times. The announcement was followed by the reported resignation of Vladislav Surkov, Mr. Putin's chief negotiator on Ukraine.

People close to the peace talks said the changes were intended to formalise Mr. Kozak's emergence as Mr. Putin's lead negotiator on Ukraine. Mr. Kozak oversaw two landmark prisoner exchanges last year that were widely hailed as progress in efforts to bring an end to the conflict between Ukraine and Russia-backed armed forces. The conflict in eastern Ukraine, which started with Russia's annexation of Crimea from Ukraine in 2014, has claimed 14,000 lives.

Mr. Kozak has also helped resurrect four-party peace talks led by France and Germany. The so-called "Normandy four" negotiations resumed last month after years of stalling under Mr. Surkov. "Surkov was playing interference. If he is really gone this is good," said a person close to Ukrainian president Volodymyr Zelensky.

Mr. Kozak will now have to reconcile Ukraine's efforts to reclaim the two Moscow-backed breakaway states on its border with Russia. Mr. Zelensky has refused to grant the regions lasting autonomy – a move seen in Ukraine as giving Russia a veto over Kyiv's pro-western foreign policy – and instead wants to include them in a planned decentralisation reform. "Surkov was [driving] a policy of weakening Ukraine and preventing the signature of future EU and Nato agreements by politically destabilising the territory," a person familiar with the peace talks said. "Now we are more into managing the process on the ground. [ . . .] It's a more pragmatic approach. Kozak is a stronger administrator and good on the economy." But other people close to the talks cautioned that Mr. Putin, who has shown no sign of easing pressure on Ukraine, will remain the ultimate decision maker. "Zelensky's guys just associate all the problems with Surkov. They don't get who they're dealing with," the former Kremlin colleague said. "Of course they won't give the territories back. It's a fantasy."

 

Looks like the M30 well missed unfortunately, but KUB had $7.5 million USD in cash and this well cost them around $500,000 to do. That means they still have 3 cents a share in cash, no value given on producing assets or additional projects ongoing. A new company presentation came out today and clearly shows they have a lot on the go. So not sure how their first free JV well in September and this recent well destroyed 80% of the company value when they are still up in cash year over year and Ukraine is starting to push a peace effort through.

February 2020 presentation: http://www.cubenergyinc.com/_resources/corporate-presentation.pdf

Recent news:

Cub Energy interest Kub-Gas to abandon M-30 well

2020-02-28 07:52 MT - News Release


Mr. Mikhail Afendikov reports

CUB ENERGY INC. ANNOUNCES UPDATE ON THE M-30 WELL IN EASTERN UKRAINE

Kub-Gas LLC, Cub Energy Inc.'s 35-per-cent-owned subsidiary, which owns and operates the eastern Ukraine licences, has drilled the Makeevskoye-30 well to a total depth of 1,985 metres. Logging was performed on several horizons and was evaluated as having non-commercial gas shows. The well will be abandoned and Kub-Gas is reviewing its options for its next operation.

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.

We seek Safe Harbor.


© 2020 Canjex Publishing Ltd. All rights reserved.

 

Cub signs contract to purchase power generation engines

2020-04-15 06:49 MT - News Release


Mr. Mikhail Afendikov reports

CUB ENERGY INC. ANNOUNCES CAPITAL COMMITMENT TO RESTART THE RK FIELD FOR POWER GENERATION

Cub Energy Inc.'s 100-per-cent-owned subsidiary, Tysagaz LLC, 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. Each power generation unit will have the capacity to produce as much as 1.5 megawatts ("MW&quot of power each or 3 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.

The Jenbacher units will be manufactured in Europe and expected delivery is in the fourth quarter of 2020 with power revenue expected in the first quarter of 2021. The successful sale of power into the local grid will be subject to the successful installation of the Jenbacher units, regulatory commissioning and tie-in to the local power supply. The direct capital costs of the two units are approximately US$1.4 million and the total investment is expected to be approximately US$1.9 million. The total investment amount includes approximately $0.3 million in Value Added Tax (VAT) which should be refunded on commercial production. There are approximately 60 of these power generators units currently in operation in Ukraine.

Mikhail Afendikov, Chairman and CEO of Cub said: "We reviewed various alternatives to maximize the value of the RK field and we believe the Jenbacher power generation is the best path for shareholders. It has the potential to generate material cashflow while at the same time capitalizing on the restart of the RK field."

Currently, all of the Company's facilities remain fully operational. 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. The Company has implemented certain cost-cutting initiatives during the second quarter of 2020, including the layoff of eleven team members, salary adjustments of up to 25% and a general reduction in the use of external consultants.

About Cub Energy Inc.

Cub Energy Inc. (TSX-V: KUB) is an upstream oil and gas and power generation 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 energy assets.

We seek Safe Harbor.

© 2020 Canjex Publishing Ltd. All rights reserved.

 

Article : Cub Energy JV Partner Moves Forward In Ukraine

Nafta has obtained a mining license in Ukraine

The Ukrainian government decided on Wednesday.

https://ekonomika.sme.sk/c/22395869/spolocnost-nafta-ziskala-licenciu-na-tazbu-na-ukrajine.html

May 1, 2020 at 11:26 AM SITA

BRATISLAVA. The company Nafta, which operates gas storage facilities in Slovakia and is engaged in the exploration and extraction of hydrocarbons, is consolidating its position in Ukraine.

EP Ukraine, in which Nafta has a 10% share and Energetický a průmyslový holding (EPH) has a 90% share, has obtained a license to explore and extract mainly natural gas in the Ukrainian projects Grunivska and Ochtyrska.

The Ukrainian government decided on Wednesday.

Two mining sites

As EPH further informed through the portal of the Slovak Gas and Oil Association slovgas.sk, its subsidiary EP Ukraine was selected on the basis of evaluation criteria developed by experts, international consulting companies and energy organizations.

"We welcome the opportunity to use our financial and technological advantages in the dynamic development of the Ukrainian energy sector," said EP Ukraine in response.

EP Ukraine will now launch an extensive investment program, including in the first phase the implementation of seismic measurements and the drilling of a significant number of exploratory wells. For the supply of services and materials will use local Ukrainian companies and experts.

The Grunivska project is located in the Sumy and Poltava self-governing areas and covers an area of almost 1,100 square kilometers.

The Ochtyrska project with a total area of 670 square kilometers extends on the border of the Sumy, Poltava and Kharkiv self-governing regions.

Diesel will be involved in the development of mining

Nafta, as a Central European leader in the production and storage of oil and natural gas with more than 105 years of experience, is ready to ensure the active development of individual licenses for the exploration and production of hydrocarbons, especially natural gas, in the Ukrainian project.

Last year, through its subsidiary Nafta RV LLC, it participated in the tender for Vantazhkivsk's license.

With its bid in the auction, it succeeded and obtained the right to a Vantazhkivske license near the town of Poltava.

Diesel also started last year with Cub Energy Inc. to implement the first of three planned exploratory wells near Uzhhorod.

The Slovak company Nafta, through its subsidiary Nafta International BV, entered the Ukrainian market about four years ago after obtaining 50 percent in the Uzhhorod license.

Since then, the partners have been working on a joint project aimed at exploring the Uzhhorod license in western Ukraine.

The Uzhhorod license is a geological continuation of highly explored areas in eastern Slovakia and copies the trend of discovered deposits in Slovakia.

As the main shareholder of EP Ukraine, EPH is active in the Czech Republic, Slovakia, Germany, France, the United Kingdom, Ireland , Italy , Poland and Hungary. The holding covers the entire spectrum of energy production and distribution.

 

So as we expected, Q1 was not going to be good. Reason being that around $500,000 USD was spent on the M30 well and that was factored into this quarter. At the same time, KUB has $6.1 million USD in cash(minus $1.7 mil with RK field equipment purchase as of recent), and then the company presentation below shows work happening on all 5 leases this year. On top of that, cost cutting measures were implemented(see below) where 11 team members were layed off, not sure if that includes the $60k a year director, along with other savings. So I feel that the cost reductions will help a lot.

New company presentation: http://www.cubenergyinc.com/_resources/corporate-presentation.pdf?v=4.2

2020-05-21 14:49 MT - News Release


Mr. Mikhail Afendikov reports


CUB ENERGY ANNOUNCES FIRST QUARTER OF 2020 RESULTS


Cub Energy Inc. has released its unaudited financial and operating results for the interim three months ended March 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.


Mikhail Afendikov, Chairman and CEO of Cub said: "In April 2020, we made a capital commitment to purchase two Jenbacher power generation units in order to better utilize the Company's RK field in western Ukraine to generate potential cashflow for the Company."


Operational Highlights

• Achieved average natural gas price of $3.45/Mcf and condensate price of $36.25/bbl during the three months March 31, 2020 as compared to $7.11/Mcf and $42.57/bbl for 2019. The decrease is due, in large part, to increased volumes of gas stored in Europe and a warmer than expected winter in Europe.
• Production averaged 646 boe/d (97% weighted to natural gas and the remaining to condensate) for the three months March 31, 2020 as compared to 895 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. Each power generation unit will have the capacity to produce as much as 1.5 megawatts ("MW") of power each or 3 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 $706,000 or $0.00 per share during the three months March 31, 2020 as compared to net income of $962,000 or $0.00 per share during 2019.
• Netbacks of $5.40/boe or $0.90/Mcfe were achieved for the three months March 31, 2020 as compared to netback of $24.49/Boe or $4.08/Mcfe for 2019.
• The Company has implemented certain cost-cutting initiatives during the second quarter of 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.

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.

Three Months Ended Three Months Ended
(in thousands of US Dollars) March 31, 2020 March 31, 2019
Petroleum and natural gas revenue 66 49
Pro-rata petroleum and natural gas revenue(1) 1,262 3,452
Revenue from gas trading(2) 2,204 4,479
Net income (loss) (706) 962
Income (loss) per share - basic and diluted (0.00) 0.00
Funds generated from (used in) operations 350 (35)
Capital expenditures(3) - -
Pro-rata capital expenditures(3) 851 56
Pro-rata netback ($/boe) 5.40 24.49
Pro-rata netback ($Mcfe) 0.90 4.08

March 31, 2020 December 31, 2019
Cash and cash equivalents 6,100 6,206

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 twelve months ended March 31, 2020, the Company recorded $2,204,000 (2019 - $4,479,000) and $2,070,000 (2019 - $4,240,000) in revenue for gas trading and $134,000 (2019 - $239,000).
• Capital expenditures include 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.

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.


We seek Safe Harbor.


© 2020 Canjex Publishing Ltd. All rights reserved.

 

KUB rollback removed after 5 years: https://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00027219

 

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.

 

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.

 

Ukraine natural gas prices are back to $7.50 an MCF as per the link below.

https://www.ueex.com.ua/eng/exchange-quotations/natural-gas/medium-and-long-term-market/


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

 

No cheap gas in 2021: Why Ukraine cannot increase blue fuel production?

https://112.international/finance/n...nnot-increase-blue-fuel-production-57745.html