Cub Energy Announces Net Earnings of US $0.8 million for the First Half of 2019

CUB ENERGY ANNOUNCES NET EARNINGS OF US $0.8 MILLION FOR THE FIRST HALF OF 2019 Houston, Texas – August 27, 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 and six months ended June 30, 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 are pleased to announce net income $0.8 million during the six months ended June 30, 2019, and receipt of $1.7 million in dividends, plus a further $1.1 million in dividends subsequent to the quarter end. In western Ukraine, the CNG drilling contractor has begun mobilization of the rig for ehe planned three-well program( Uzhgorodske oi&gas field).  All costs for the three wells will be borne 100% by CNG. In addition, in eastern Ukraine, we are pleased to announce that Kub-Gas plans to drill a new well, the M-30 well, in Q4 2019."

OPERATIONAL HIGHLIGHTS     

  • Achieved average natural gas price of $6.28/Mcf and condensate price of $45.88/bbl during the six months June 30, 2019 as compared to $7.34/Mcf and $65.18/bbl for the comparative  2018 period.     
  • Production averaged 873 boe/d (97% weighted to natural gas and the remaining to condensate) for the six months June 30, 2019 as compared to 819 boe/d for the 2018 comparative period.     
  • The CNG drilling contractor has commenced mobilization of its rig for the three-well program on the Uzghorod licence. The costs of drilling will be incurred 100% by our partner.     
  • Kub-Gas recompleted the Olgovskoye-7 (“O-7”) well to the M6v which increased its production to 0.6 million cubic feet of gas per day (“MMcf/d"). The M6v is a relatively small gas reservoir and the current rate is approximately 0.3 MMcf/d. Kub-Gas also recently recompleted two other wells for a combined additional increase of approximately 0.35 MMcf/d in field production. Kub-Gas uses its own completion equipment and personnel.

FINANCIAL HIGHLIGHTS

  • The Company reported net income of $0.8 million or $0.00 per share during the six months June 30, 2019 as compared to net income of $1.4 million or $0.00 per share during the same period in 2018.
  •  Netbacks of $20.50/boe or $3.42/Mcfe were achieved for the six months June 30, 2019 as compared to netback of $26.45/Boe or $4.41/Mcfe for the comparative 2018 period.
  • The Company received $1.7 million in dividends during the six months June 30, 2019 as compared to $2.4 million in dividends in the comparative 2018 period. Subsequent to the quarter ended June 30, 2019, the Company recorded an additional $1.1 million in dividends from KUBGAS Holdings.

(in thousands of US Dollars)

Three Months Ended  September 30, 2019  Three Months Ended  September 30, 2018 
 
Six Months Ended  September 30, 2019

Six  Months Ended  September 30, 2018

Petroleum and natural gas revenue 

77 18 126 18

Pro-rata petroleum and natural gas revenue

2.785 3,354 5.937 6.781

Revenue from gas trading

2.975 3,079 7.454 8.749

Net income 

(205) 596 757 1.375

Income per share – basic and diluted

(0,00) 0,00 0,00 0,00

Funds generated from operations

678 596 643 993

Capital expenditures

9 77 9 211

Pro-rata capital expenditures 

302 526 358 861

Pro-rata netback ($/boe)

16.19 26.98 20.5 26.45

Pro-rata netback ($Mcfe)

2.70 4.50 3.42 4.41

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.

13:36 / 28 August, 2019

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