HOUSTON, TEXAS--(Marketwire - April 10, 2012) - Cub Energy Inc. ("CUB", or the "Company") (TSX VENTURE:KUB), announces today that on April 9, 2012 Kub-Gas LLC ("KUB-Gas") received Special Permit No. 5506 from the State Geological Service of Ukraine authorizing full industrial production for a 20 year term on the Makeevskoye Field, replacing the previously issued five-year Special Permit for exploration. A special permit (or license) for full production by law no longer limits production to 10% of state-approved reserves and in fact contains no such limits. Based on Special Permit No. 5506, Kub-Gas is authorized to commence conversion of the field to full industrial production, with anticipation that this process will be completed by this summer 2012. The Makeevskoye License is operated by KUB-Gas, in which CUB has a 30% ownership interest.
Mikhail Afendikov, Chairman and Chief Executive Officer, stated that:
"The conversion of the Makeevskoye license into a 20-year production license shortly after the conversion of the Olgovskoye license into a production license is a significant milestone for the company as it opens the way for the full development of the license area. This conversion enhances our ability to increase production in our Eastern Fields."
The Makeevskoye-19 ("M-19") exploration well, the first KUB-Gas well to use modern logging tools, was drilled to a total depth ("TD") of 2,060 metres and commenced production in 2011 at an initial rate in excess of 5.5 million cubic feet per day ("MMcf/d"). The M-19 well has averaged approximately 7.5 MMcf/d (2.25 MMcf/d net to CUB) the last few weeks and management believes the potential exists for this to be the new production level, now that the license has been converted and production is not capped. A 3D seismic program for the Olgovskoye and Makeevskoye license areas covering approximately 180 km2 has been processed with interpretation defining a number of potential locations for further development on both licenses. Most notably, the new seismic data illustrated a potential areal extent of approximately 6 km2 for the new gas zone discovered by the M-19 well and defined two new locations. The first location Makeevskoye-21 ("M-21), an 830 metre step out from M-19 has been drilled, logged and commercially cased to TD of 2,210 metres showing two target zones totaling 16 metres of pay. The primary target encountered in the Muscovian correlates directly back to the productive zone in M-19 while the second zone with 10 metres of pay in the Bashkirian which has never been tested. DST testing of these zones is expected to occur before end of second quarter. CUB expects to drill a second location, the Makeevskoye-16 ("M-16"), to further develop later in June.
Current gross production from the four KUB-Gas producing licenses is approximately 21.5 MMcf/d with (6.5 MMcf/d net to CUB). Of the gross amount approximately 7.5 MMcf/d or 35% is produced from Makeevskoye and 11.6 MMcf/d or 55% is produced from Olgovskoye.
About CUB Energy Inc.
Cub Energy Inc. is a Canadian listed public company focused on the exploration and development of oil and gas in Ukraine. The Company is headquartered in Houston, Texas with offices in Kyiv. Cub has a large land base in two major producing basins within Ukraine made up of nine fields with 110,000 net acres and a growing inventory of drill locations with 8 permitted today to be drilled in 2012. In the Trans Carpathian Basin, CUB is the 100% owner and operator of four fields totaling approximately 80,000 acres. In the Dnieper-Donets Basin, CUB is the 30% owner and joint-operator of five fields totaling 30,000 net acres. The Corporation's strategy is to use western technology, capital, and expertise to grow its proven undeveloped reserves and build a portfolio of low cost gas production assets in Ukraine to capitalize on high regional gas prices. CUB shares are traded on the TSX Venture Exchange under the stock symbol "KUB".
For further information please contact or visit our website www.cubenergyinc.com.
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 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.