TPNEF - Cub Energy Inc.

Discussion in 'Stock picks and trading strategies' started by goldismyfriend, Apr 24, 2019.

  1. Cub Energy Announces Sale of CNG Interest

    http://www.cubenergyinc.com/_resources/news/nr_2021-04-30.pdf

    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
     
  2. 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
     
  3. 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.
     
  4. 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.

    http://www.cubenergyinc.com/media_centre/gallery/

     
  5. Cub Energy earns $483,000 (U.S.) in Q2 2021

    2021-08-25 14:44 ET - News Release


    Mr. Patrick McGrath reports

    CUB ENERGY ANNOUNCES SECOND QUARTER RESULTS

    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.


    [​IMG]
    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.
     
  6. 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)

    ASSETS
    Cash & Equivalents: $5,137,000
    Prepaid Expenses: $80,000
    Trade & Other Receivables: $83,000
    Equity Investments: $3,041,000
    Property, Plant & Equipment: $1,817,000
    Non-Current Receivables: $626,000
    Total Assets: $10,784,000

    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.
     
  7. So what are the catalysts for KUB right now:

    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
     
  8. 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.
     
  9. 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.
     

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