Cub Energy Achieves Record Exit Production over 2,000 boe/d and
Updates Fourth Quarter 2013 Operations
HOUSTON, TEXAS--(Marketwired - Jan 13, 2014) - Cub Energy Inc.
("Cub", or the "Company") (TSX-VENTURE:KUB) announces fourth
quarter operational update including the seventh consecutive
quarter of production growth, record quarterly production and a
2013 exit rate of approximately 2,070 barrels of oil equivalent
("boe/d") (a 35% increase over the Company's 2012 exit rate).
Fourth Quarter
Update
Average production from the Company's Ukrainian assets for the
fourth quarter of 2013 was 1,687 boe/d, an 11.5% increase over
third quarter production of 1,513 boe/d. Cub realised a significant
increase in corporate production from the tie in of its first 100%
working interest ("WI") well, the Rusko-Komarovskye-22 ("RK-22")
late in the fourth quarter. Average production for 2013 was 1,562
boe/d (an increase of 29% over 2012 production of 1,210 boe/d).
During the fourth quarter Cub drilled, completed and brought on
production the RK-22 well. The Company announced in December the
RK-22 well tested gas at a maximum flow rate of 2.5 million cubic
feet per day ("MMcf/d"). The well commenced production in
late-December and is currently producing approximately 1.9 MMcf/d
or 318 boe/d.
During the quarter, the Company also commenced drilling of the
Makeevskoye-17 ("M-17") and began testing the Olgovskoye-24
("O-24") wells in eastern Ukraine. The M-17 and O-24 wells are
operated by KUB-Gas LLC ("KUB-Gas"), a partially-owned subsidiary
in which Cub has a 30% ownership interest through its 30%
shareholding of KUBGas Holdings Limited.
Infrastructure
Development
The Company continued work on the expansion of its Makeevskoye
facilities designed to increase capacity from 30 MMcf/d to 68
MMcf/d for production from both the Makeevskoye and Olgovskoye
fields. Upon completion of the expansion, Cub expects an increase
in production from several wells that are currently flowing at
restricted rate due to the current capacity of the facilities.
Completion of the expansion project is expected during the first
quarter of 2014.
2014 Work Program and
Budget
The company expects to execute a capital expenditure budget of
approximately $23 to $27 million (net to Cub) for 2014 and is
contingent on the level of operating cash flow.
The program will primarily focus on further development of
producing assets in both the eastern and western Ukraine with plans
to drill eleven wells (six with a 100% WI and the balance with
25%-30% WI).
With the successful tie-in of the RK-22 well, Cub expects to
commence drilling of the follow up RK-21 well during the first
quarter of 2014. Two additional wells are planned on the RK licence
during the balance of the year.
Additionally, Cub expects additional production volumes through
of program of workovers, fracture stimulations and re-entries on
7-10 wells beginning in the first quarter of 2014.
Ukraine Industrial Gas
Pricing
Based on current legislation, the Company expects first quarter
industrial gas pricing to be between US $10.00 and $11.00 per
thousand cubic feet. All of the Company's Ukraine production is
marketed and sold to industrial-end users.
Updated Corporate
Presentation
For more information on this operational update and Cub's plans
for 2014, please see the Company's January 2014 corporate
presentation at www.cubenergyinc.com.
About Cub Energy Inc.
Cub Energy is an upstream oil and gas company, with a proven
track record of exploration and production cost efficiency in the
Black Sea region. 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.
Oil and Gas Equivalents
A barrel of oil equivalent ("boe") or units of natural gas
equivalents ("Mcfe") is calculated using the conversion factor of 6
Mcf (thousand cubic feet) of natural gas being equivalent to one
barrel of oil. A boe conversion ratio of 6 Mcf: 1 bbl (barrel) or
an Mcfe conversion of 1bbl: 6 Mcf is, based on an energy
equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the wellhead and
is not based on either energy content or current prices. While the
boe ratio is useful for comparative measures, it does not
accurately reflect individual product values and might be
misleading, particularly if used in isolation. As well, given that
the value ratio, based on the current price of crude oil to natural
gas, is significantly different from the 6:1 energy equivalency
ratio, using a 6:1 conversion ratio may be misleading as an
indication of value.
Reader Advisory
Except for statements of historical fact, this news release
contains certain "forward-looking information" within the meaning
of applicable securities law. Forward-looking information is
frequently characterized by words such as "plan", "expect",
"project", "intend", "believe", "anticipate", "estimate" and other
similar words, or statements that certain events or conditions
"may" or "will" occur. Cub believes that the expectations reflected
in the forward-looking information are reasonable; however there
can be no assurance those expectations will prove to be correct. We
cannot guarantee future results, performance or achievements.
Consequently, there is no representation that the actual results
achieved will be the same, in whole or in part, as those set out in
the forward-looking information.
Forward-looking information is based on the opinions and
estimates of management at the date the statements are made, and
are subject to a variety of risks and uncertainties and other
factors that could cause actual events or results to differ
materially from those anticipated in the forward-looking
information. Some of the risks and other factors that could cause
the results to differ materially from those expressed in the
forward-looking information include, but are not limited to:
general economic conditions in the Ukraine, Turkey and globally;
industry conditions, including fluctuations in the prices of
natural gas; governmental regulation of the natural gas industry,
including environmental regulation; unanticipated operating events
or performance which can reduce production or cause production to
be shut in or delayed; failure to obtain industry partner and other
third party consents and approvals, if and when required;
competition for and/or inability to retain drilling rigs and other
services; the availability of capital on acceptable terms; the need
to obtain required approvals from regulatory authorities; stock
market volatility; volatility in market prices for natural gas;
liabilities inherent in natural gas operations; competition for,
among other things, capital, acquisitions of reserves, undeveloped
lands, skilled personnel and supplies; incorrect assessments of the
value of acquisitions; geological, technical, drilling, processing
and transportation problems; changes in tax laws and incentive
programs relating to the natural gas industry; failure to realize
the anticipated benefits of acquisitions and dispositions; and the
other factors. Readers are cautioned that this list of risk factors
should not be construed as exhaustive.
This cautionary statement expressly qualifies the
forward-looking information contained in this news release. We
undertake no duty to update any of the forward-looking information
to conform such information to actual results or to changes in our
expectations except as otherwise required by applicable securities
legislation. Readers are cautioned not to place undue reliance on
forward-looking information.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Cub Energy Inc.Mikhail AfendikovChairman and Chief Executive
Officer(713) 677-0439mikhail.afendikov@cubenergyinc.comCub Energy
Inc.Lionel C. McBeeDirector of Investor Relations(713)
577-1955lionel.mcbee@cubenergyinc.comwww.cubenergyinc.com
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