Cub Energy Inc. Reports Year-End Reserves for 2012
01 Abril 2013 - 5:00AM
Marketwired Canada
Cub Energy Inc. ("Cub" or the "Company") (TSX VENTURE:KUB) announces the results
of its independent reserves evaluation as of December 31, 2012 on its oil and
gas properties in Ukraine. The evaluation was conducted by RPS Energy
Consultants LLC ("RPS"), an independent qualified reserves evaluator and
auditor, on the Company's properties in Ukraine in its report dated 20 March
2013 ("The RPS Report"). All evaluations were prepared using guidelines outlined
in the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook") and are in
accordance with National Instrument 51-101 National Standards of Disclosure for
Oil and Gas Activities ("NI 51-101").
HIGHLIGHTS:
-- Proved developed producing ("PDP") oil and natural gas reserves of 1.2
MMboe or 7.3 Bcfe with PV-10 (as defined herein) of $54.5 million
-- Proved ("1P") oil and natural gas reserves of 2.25 MMboe or 13.5 Bcfe
with PV10 of $79.3 million
-- Proved and probable ("2P") oil and natural gas reserves of 4.26 MMboe or
25.61 Bcfe with PV-10 of $146.2 million
-- Proved, probable and possible oil and natural gas reserves ("3P") of
8.47 MMboe or 50.79 Bcfe with PV-10 of $257.5 million
-- Current daily production of 1,531 Boepd or 9,186 Mcfed
The December 31, 2012 estimated future net cash flows from reserves, discounted
at an annual rate of 10%, before income taxes ("PV-10") is $79.3 million for
proved reserves and $146.2 million for 2P reserves.
The value of the Company's reserves discounted at 10 percent for proved is
$35.24 per boe and $34.25 per boe for proved plus probable for the period
reported, December 31, 2012.
Total Company Reserves Summary
The Company used annualized fourth quarter volumes based on field estimates for
reserve life of 6.2 years for 1P reserves and 11.7 for 2P reserves.
The following tables summarise total company reserves and associated net present
value discounted at 10% before tax at December 31, 2012 using forecast prices.
Table 1 Total Company Reserves Volumes(1)
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Natural Gas NGL's
Reserves Category (MMcf) (Mbbl) MMboe Bcfe
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Developed producing 7,155.6 33.6 1.20 7.30
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Developed non-produced 1754.3 6.7 0.30 1.80
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Undeveloped 4271.5 12.8 0.70 4.30
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Total Proved (1P) 13,181.5 53.2 2.25 13.50
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Total Proved plus Probable (2p) 24,844.1 128.1 4.26 25.61
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Total Proved plus Probable plus Possible (3P) 48,929.2 310.1 8.47 50.79
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Note: Reserves are after deduction of royalties
(1) See "Oil and Gas Equivalents" below
Table 2 Net Present Value at 10% before tax (US$ Millions )(1)
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Reserves Category NPV
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Proved Developed Producing (PDP) 54.5
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Total Proved (1P) 79.3
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Total Proved plus Probable (2P) 146.2
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Total Proved plus Probable plus Possible (3P) 257.5
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(1) The forecast prices used in the calculations of the present value of
future net revenue for year-end 2012 are based on the RPS Reports of Eastern
Ukraine and Western Ukraine asset forecast prices.
Oil and Gas Equivalents
Production information is commonly reported in units of barrel of oil equivalent
("boe" or "Mboe" or "MMboe") or in units of natural gas equivalent ("Mcfe" or
"MMcfe" or "Bcfe"). However, boe(s) or Mcfe(s) may be misleading, particularly
if used in isolation. A boe conversion ratio of 6 Mcf = 1 barrel, or a Mcfe
conversion ratio of 1 barrel = 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.
Reserves Classifications
"Company gross reserves" are the Company's working interest share before
deducting royalties and without including any royalty interests of the Company.
Defined Terms
"Reserves" are those quantities of petroleum anticipated to be commercially
recoverable by application of development projects to known accumulations from a
given date forward under defined conditions. Reserves must further satisfy four
criteria: they must be discovered, recoverable, commercial, and remaining (as of
the evaluation date) based on the development project(s) applied.
Reserves are further categorized in accordance with the level of certainty
associated with the estimates and may be sub-classified based on project
maturity and/or characterized by development and production status.
"Proved Reserves" are those quantities of petroleum, which by analysis of
geosciences and engineering data, can be estimated with reasonable certainty to
be commercially recoverable, from a given date forward, from known reservoirs
and under defined economic conditions, operating methods and government
regulations.
"Probable Reserves" are those additional Reserves which analysis of geosciences
and engineering data indicate are less likely to be recovered than Proved
Reserves but more certain to be recovered than Possible Reserves.
"Possible Reserves" are those additional Reserves which analysis of geosciences
and engineering data indicate are less likely to be recoverable than Probable
Reserves. There is a 10% probability that the quantities actually recovered will
equal or exceed the sum of proved plus probable plus possible Reserves.
About Cub Energy Inc.
Cub Energy Inc. (TSX VENTURE:KUB) is an upstream oil and gas company with
110,000 net acres in nine exploration and production licences within the two
major producing basins of 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 visit our website: www.cubenergyinc.com.
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 Ukraine 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 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Cub Energy Inc.
Lionel C. McBee
Director of Investor Relations
(713) 677-0439
lionel.mcbee@cubenergyinc.com
Cub Energy Inc.
Mikhail Afendikov
Chairman and Chief Executive Officer
(713) 677-0439
mikhail.afendikov@cubenergyinc.com
www.cubenergyinc.com
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