Wednesday, April 2, 2014

Cub Energy reports 2013 yearend results and updates operations

Cub Energy:

Production averaged 1,542 boe/d (95% natural gas) for the year ended December 31, 2013 for
an increase of 27% over 1,210 boe/d in 2012;

Exit rate of 2,070 boe/d for the year ended December 31, 2013 for an increase of 35% over
1,531 boe/d in 2012;

Current production of approximately 1,800 boe/d;

Achieved average natural gas prices of $11.26/Mcf and condensate price of $87.90/bbl for the
year ended December 31, 2013;

A shallow pool gas discovery was made on the RK licence with the RK-22 well in western
Ukraine which was tied-in and brought on production in late 2013;

A new pool gas discovery was made on the Makeevskoye licence in eastern Ukraine in the
Serpukhovian Zone with the M-16 well and was tied-in and on production in 2013;

Tested gas on a new reservoir on the Olgovskoye licence in eastern Ukraine with the O-15 well,
which was also tied in and brought on production in 2013. This deeper pool discovery has the
potential for offset development;

Krutogorovskoye licence in eastern Ukraine was successfully converted to 20-year production
licence; and

The expansion of the Makeevskoye and Olgovskoye production and processing facility was
completed in 2013. Gas began flowing on March 6, 2014 resulting in increased capacity to 68
MMcf/d from the previous 30 MMcf/d and it’s expected to take 30 to 60 days to become fully

Things are progressing well at the company as the management expects to exit 2014 with a production rate of approximately 2,800 boe/d. Elections in Ukraine are next month and the whole Crimea thing is already receding from the news and will end up being a non-event. I expect no further Russian incursions into Ukraine anytime in the near future. Once the market realizes this I would expect an upward revaluation of Cub Energy.

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