New company presentation from Cub Energy below. Keeping in mind that their RK Field project after 5 years will be going into production in the next 60 days. Rather than the RK field producing natural gas, it will now produce electricity (converted from high nitrogen natural gas) which is in more demand and more lucrative in Ukraine. This project is 100% owned by the company and they had to write off tens of millions of dollars in the past because they couldn’t get their NRU unit completed. Therefore, this will add tremendous shareholder value once producing, as it should be added back to the balance sheet as a productive asset. Below is information on the two RK wells which both produced over 2MMCF, or a total of 777boed.
Cub Energy Annual Information 2020
Page 27: RK field: proven commercial production currently shut-in since April 1, 2016 due to its inability to meet pipeline specifications; but began selling rich gas from a deep well (RK1) in the Mesozoic formation resulting in minor production in 2017, 2018 and 2019. Given the low rate of production for the past three years and unspecified future date of commercial production, proven reserves are classified as contingent resources should commercial production begins again.
Cub Energy 2019 Management Discussion (Released March 2020)
There were impairment charges that impacted net losses in 2019. During the quarter ended December 31, 2019, the Company recorded impairment charges due to the carrying value of its petroleum and natural gas assets exceeding the net present value of expected future cash flows using a discount rate of 26%. The high discount rate relates to the local discount rate in Ukraine and related country risk at that time. During the fourth quarter of 2019, the Company took a $5,014,000 impairment charge relating to the RK field and an impairment on its equity investment in Kub Holdings of $5,864,000. During the year ended December 31, 2017, the Company recorded impairment charges due to the carrying value of its petroleum and natural gas assets exceeding the net present value of expected future cash flows using a discount rate of 26%. The high discount rate relates to the local discount rate in Ukraine and related country risk. During 2017, the Company took a $5,300,000 impairment charge relating to the RK field and an impairment on its equity investment in Kub Holdings of $10,700,000.
News Release Cub Energy Inc. Q4 Operations Update and RSU Grant Houston, Texas – January 23, 2015 – Cub Energy Inc. (“Cub” or the “Company”) (TSX-V: KUB) announces fourth quarter production and operational update, including a 2014 exit rate of approximately 2,407 barrels of oil equivalent (“boe/d”) (a 16% increase over the Company’s 2013 exit rate of 2,070 boe/d). This update includes ongoing operations from KUB-Gas LLC (“KUBGas”), which Cub has a 30% ownership interest, and Tysagaz LLC (“Tysagaz”), Cub’s 100% owned subsidiary. Fourth Quarter Production Average production for the fourth quarter was approximately 2,112 boe/d, representing a 3% decrease from 2,174 boe/d in the third quarter of 2014 and a 25% increase over the 2013 fourth quarter average production of 1,687 bod/d. Production for the first 20 days of January has averaged 2,063 boe/d. Production increased in the fourth quarter as a result of the Rusko-Komarovske 23 (“RK-23”) well that tested gas at a rate of over 2.3 million cubic feet per day (“MMcf/d”) through an eight millimetre choke in November 2014 and was subsequently tied in. The RK-23 well is 100% owned and operated by Cub in western Ukraine. The RK-23 well produced an average of 2.1 MMcf/d during the latter half of the fourth quarter. Production at KUB-Gas decreased during the fourth quarter by approximately 11% substantially due to: • The existing surface facilities are having difficulty meeting sales gas dew point specifications, and some wells have been choked back. This will be addressed with new compression in the Olgovskoye field due to be installed in May 2015. • The M-16, M-17 and O-12 wells were shut in for approximately three days each for their annual build-up tests. • M-16 was shut in in November to recomplete the well to the S5 zone, as it was determined that the M-17 well is capable of fully draining the S6 pool in which both wells were originally completed. M-22 Drilling Update and RK-21 Workover As previously disclosed, the KUB-Gas M-22 well reached TD in late December, and logs and drilling data indicate 18 metres of net pay in two zones, including the S13a, which has not been previously tested in the area. The well also encountered four other zones with aggregate thickness of 22 metres that have resource potential. The well has been cased and completion and testing is ongoing. A flowline was pre-built earlier in 2014, and the tie-in is anticipated to be finished by the first quarter of 2015, pending regulatory approvals. The RK-21 well, originally completed in a single zone in May of 2014, indicated the presence of a number of potentially productive intervals that could be added to maintain a steady rate of production from the well. Rather than completing all of the intervals at the same time, management decided to open additional intervals to maintain a reasonable steady production 2 stream from the well. Recently, the company added the fourth, fifth and sixth sets of perforations to the well. The well responded favorably by displaying an immediate increase in flowing tubing pressure with a corresponding increase of production from a 5-day average of 0.8 MMcf/d to over 2.6 MMcf/d for the subsequent 5-day period. These perforations were added over a two-day period at small incremental cost.