Cub Energy Announces Third Quarter Results
HOUSTON, TX and CALGARY, AB / ACCESSWIRE / November 29, 2021 / Cub Energy Inc. ("Cub" or the "Company"
(TSX-V:KUB), a Ukraine-focused energy company, announced today its unaudited financial and operating results for the interim nine months ended September 30, 2021. 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.
Patrick McGrath, CEO of Cub said: "We are pleased to report $2,138,000 or $0.01 per share in net income during the nine months ended September 30, 2021. The increase in the price of natural gas was the primary contributor to the 2021 financial results. Cub also signed a letter agreement for the sale of its 35% equity interest in Kub-Gas for deemed consideration of $10.6 million. The proposed sale will deleverage Cub's balance and allow Cub to focus on its 100% owned assets and new opportunities."
Operational Highlights
Achieved average natural gas price of $7.66/Mcf and condensate price of $69.16/bbl during the nine months ended September 30, 2021 as compared to $3.59/Mcf and $40.33/bbl for the comparative 2020 period.
Production averaged 513 boe/d (97% weighted to natural gas and the remaining to condensate) for the nine months ended September 30, 2021 as compared to 638 boe/d for the comparative 2020 period
The power business generated 5,546 megawatts an hour ("MWh" from the Jenbacher power units in Western Ukraine for the period of commencement in mid-May 2021 to September 18, 2021 at an average price of $71/MWh. Due to the recent material increase in natural gas prices and no parallel increase in power prices, the Company has increased its sales of natural gas at the RK field and temporarily suspended the power business as of September 18, 2021 as this strategy is more profitable at present. The Company will continue to monitor the prices of both commodities and utilize whichever one produces the better return for shareholders.
On September 7, 2021, the Company announced it had entered into a letter agreement to sell its 35% interest in KUB-Gas for a cash payment of $2,600,000 and settlement of approximately $8,000,000 in debt for total deemed consideration of approximately $10,600,000. The closing of the transaction is subject to the parties entering into a definitive agreement and regulatory approval.
The Company continues to work towards closing the sale of its 50% interest in CNG Holdings, which indirectly owns the Uzhgorod licence in western Ukraine. In consideration, the Company is to receive €800,000 for its 50% interest in CNG Holdings. The consideration consists of €600,000 in cash on closing and €200,000 is a contingent payment on certain future events including a commercial discovery. The closing is subject to certain conditions including Ukraine regulatory approval.
Financial Highlights
The gross profit on the Company's gas trading business increased to $2,311,000 during the nine months ended September 30, 2021 as compared to $899,000 in gross profit in the comparative 2020 period.
The Company reported net income of $2,138,000 or $0.01 per share during the nine months ended September 30, 2021 as compared to a net loss of $2,274,000 or $0.01 per share during the comparative 2020 period.
Netbacks of $22.90/boe or $3.82/Mcfe were achieved for the nine months ended September 30, 2021 as compared to netback of $9.13/Boe or $1.52/Mcfe for the nine month comparative period in 2020.
(in thousands of US Dollars)
Three
Months Ended
September 30, 2021
Three
Months Ended
September 30, 2020
Nine
Months Ended
September 30, 2021
Nine
Months Ended
September 30, 2020
Revenue from gas trading
2,698 1,255 6,180 4,382
Pro-rata petroleum and natural gas revenue(1)
2,089 659 4,498 2,713
Revenue from sale of electricity
281 - 459 -
Petroleum and natural gas revenue
114 37 305 146
Net income (loss)
1,392 (374 ) 2,138 (2,274 )
Income (loss) per share - basic and diluted
0.00 (0.00 ) 0.01 (0.01 )
Funds generated from (used in) operations
330 (232 ) 1,414 (325 )
Capital expenditures(2)
- - 352 -
Pro-rata capital expenditures(2)
146 - 601 869
Pro-rata netback ($/boe)
31.00 9.11 22.90 9.13
Pro-rata netback ($Mcfe)
5.17 1.52 3.82 1.52
September 30,
2021
December 31,
2020
Cash and cash equivalents
5,385 4,424
Notes:
Pro-rata petroleum and natural gas revenue is a non-IFRS measure that adds the Company's petroleum and natural gas revenue earned in the respective periods to the Company's 35% equity share of the KUB-Gas natural gas sales that the Company has an economic interest in.
Capital expenditures includes the purchase of property, plant and equipment and the purchase of exploration and evaluation assets. Pro-rata capital expenditures are a non-IFRS measure that adds the Company's capital expenditures in the respective periods to the Company's 35% equity share of the KUB-Gas and 50% equity share of CNG Holdings capital expenditures that the Company has an economic interest in.
For purposes of the pro-rata netback calculation, the Company's profit from gas trading is added to the revenue of Kub-Gas to better reflect the true natural gas price achieved and field netback.
Reader Advisory
With the current cash resources, negative working capital, fluctuating commodity prices, currency fluctuations, reliance on a limited number of customers, the Company may not have sufficient cash to continue the exploration and development activities. These matters raise significant doubt about the ability of the Company to continue as a going concern and meet its obligations as they become due.
Supporting Documents
Cub's complete interim reporting package, including the unaudited consolidated 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 a power and 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 assets within a high commodity price environment. For further information please contact us or visit our website: www.cubenergyinc.com
Patrick McGrath
Chief Executive Officer
(832) 499-6009
patrick.mcgrath@cubenergyinc.com
HOUSTON, TX and CALGARY, AB / ACCESSWIRE / November 29, 2021 / Cub Energy Inc. ("Cub" or the "Company"
(TSX-V:KUB), a Ukraine-focused energy company, announced today its unaudited financial and operating results for the interim nine months ended September 30, 2021. 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. Patrick McGrath, CEO of Cub said: "We are pleased to report $2,138,000 or $0.01 per share in net income during the nine months ended September 30, 2021. The increase in the price of natural gas was the primary contributor to the 2021 financial results. Cub also signed a letter agreement for the sale of its 35% equity interest in Kub-Gas for deemed consideration of $10.6 million. The proposed sale will deleverage Cub's balance and allow Cub to focus on its 100% owned assets and new opportunities."
Operational Highlights
Achieved average natural gas price of $7.66/Mcf and condensate price of $69.16/bbl during the nine months ended September 30, 2021 as compared to $3.59/Mcf and $40.33/bbl for the comparative 2020 period.
Production averaged 513 boe/d (97% weighted to natural gas and the remaining to condensate) for the nine months ended September 30, 2021 as compared to 638 boe/d for the comparative 2020 period
The power business generated 5,546 megawatts an hour ("MWh"
from the Jenbacher power units in Western Ukraine for the period of commencement in mid-May 2021 to September 18, 2021 at an average price of $71/MWh. Due to the recent material increase in natural gas prices and no parallel increase in power prices, the Company has increased its sales of natural gas at the RK field and temporarily suspended the power business as of September 18, 2021 as this strategy is more profitable at present. The Company will continue to monitor the prices of both commodities and utilize whichever one produces the better return for shareholders. On September 7, 2021, the Company announced it had entered into a letter agreement to sell its 35% interest in KUB-Gas for a cash payment of $2,600,000 and settlement of approximately $8,000,000 in debt for total deemed consideration of approximately $10,600,000. The closing of the transaction is subject to the parties entering into a definitive agreement and regulatory approval.
The Company continues to work towards closing the sale of its 50% interest in CNG Holdings, which indirectly owns the Uzhgorod licence in western Ukraine. In consideration, the Company is to receive €800,000 for its 50% interest in CNG Holdings. The consideration consists of €600,000 in cash on closing and €200,000 is a contingent payment on certain future events including a commercial discovery. The closing is subject to certain conditions including Ukraine regulatory approval.
Financial Highlights
The gross profit on the Company's gas trading business increased to $2,311,000 during the nine months ended September 30, 2021 as compared to $899,000 in gross profit in the comparative 2020 period.
The Company reported net income of $2,138,000 or $0.01 per share during the nine months ended September 30, 2021 as compared to a net loss of $2,274,000 or $0.01 per share during the comparative 2020 period.
Netbacks of $22.90/boe or $3.82/Mcfe were achieved for the nine months ended September 30, 2021 as compared to netback of $9.13/Boe or $1.52/Mcfe for the nine month comparative period in 2020.
(in thousands of US Dollars)
Three
Months Ended
September 30, 2021
Three
Months Ended
September 30, 2020
Nine
Months Ended
September 30, 2021
Nine
Months Ended
September 30, 2020
Revenue from gas trading
2,698 1,255 6,180 4,382
Pro-rata petroleum and natural gas revenue(1)
2,089 659 4,498 2,713
Revenue from sale of electricity
281 - 459 -
Petroleum and natural gas revenue
114 37 305 146
Net income (loss)
1,392 (374 ) 2,138 (2,274 )
Income (loss) per share - basic and diluted
0.00 (0.00 ) 0.01 (0.01 )
Funds generated from (used in) operations
330 (232 ) 1,414 (325 )
Capital expenditures(2)
- - 352 -
Pro-rata capital expenditures(2)
146 - 601 869
Pro-rata netback ($/boe)
31.00 9.11 22.90 9.13
Pro-rata netback ($Mcfe)
5.17 1.52 3.82 1.52
September 30,
2021
December 31,
2020
Cash and cash equivalents
5,385 4,424
Notes:
Pro-rata petroleum and natural gas revenue is a non-IFRS measure that adds the Company's petroleum and natural gas revenue earned in the respective periods to the Company's 35% equity share of the KUB-Gas natural gas sales that the Company has an economic interest in.
Capital expenditures includes the purchase of property, plant and equipment and the purchase of exploration and evaluation assets. Pro-rata capital expenditures are a non-IFRS measure that adds the Company's capital expenditures in the respective periods to the Company's 35% equity share of the KUB-Gas and 50% equity share of CNG Holdings capital expenditures that the Company has an economic interest in.
For purposes of the pro-rata netback calculation, the Company's profit from gas trading is added to the revenue of Kub-Gas to better reflect the true natural gas price achieved and field netback.
Reader Advisory
With the current cash resources, negative working capital, fluctuating commodity prices, currency fluctuations, reliance on a limited number of customers, the Company may not have sufficient cash to continue the exploration and development activities. These matters raise significant doubt about the ability of the Company to continue as a going concern and meet its obligations as they become due.
Supporting Documents
Cub's complete interim reporting package, including the unaudited consolidated 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 a power and 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 assets within a high commodity price environment. For further information please contact us or visit our website: www.cubenergyinc.com
Patrick McGrath
Chief Executive Officer
(832) 499-6009
patrick.mcgrath@cubenergyinc.com
