Saturday, June 28, 2014

Bloomberg article on my Stock of the Year Cub Energy


Chief Executive Officer Mikhail Afendikov said the conflict roiling Ukraine’s east won’t change its plans to boost extraction by shifting emphasis to the western part of the former Soviet republic.

Toronto-based Cub plans to raise its Ukrainian output 30 percent to 480,000 cubic meters a day next year, after adding 11 new wells in 2014, Afendikov said in an interview at the Adam Smith Energy Forum in Kiev on June 25. Cub extracted about 320,000 cubic meters a day at the end of 2013.

“We know and we understand Ukraine, and we realize the effect of what we do here,” Afendikov said. “Increasing extraction here is the right way to go.”


“If there had been no separatist unrest there, we would have extracted more, we would have drilled more,” Afendikov said. “If the political situation stabilizes, I hope we will be able to place bonds soon in Norway and spend the funds to develop fields in Ukraine.”

The company also recently updated their presentation on the website. Cub also announced yesterday that they achieved record production and the presentation affirms a projected exit production rate of 2800-3000 boe/d. This is almost 50% higher than current production. Gas prices received by the company are in the $10.72 mcf with a netback of close to $7 per mcf. This is exceptional and the only thing holding back the share price is the unrest in the east of Ukraine. Nevertheless the company continues to execute on its plan.

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