Tpnef - Cub Energy Inc.

Discussion in 'Penny Stocks' started by Jon Alba, Apr 24, 2019.

  1. Jon Alba

    Jon Alba Senior Investor

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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
    [email protected]

    Patrick McGrath
    Chief Financial Officer
    (713) 577-1948
    [email protected]
     
  2. Jon Alba

    Jon Alba Senior Investor

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  3. Jon Alba

    Jon Alba Senior Investor

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    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.

    https://www.washingtonpost.com/worl...233fe5811ef_story.html?utm_term=.2b7dfa84edf2
     
  4. Jon Alba

    Jon Alba Senior Investor

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    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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