Wednesday, December 28, 2016

Cub Energy acquires additional acreage in Western Ukraine

Cub Energy website:

Cub Energy Inc announces that its wholly-owned subsidiary, Tysagaz LLC, has been granted a new production licence with additional acreage in western Ukraine. The new Stanivske production licence covers approximately 31,000 acres, which is a 41% increase from the original exploration licence which was 22,000 acres.

The expanded Stanivske licence was awarded on December 23, 2016, by way of a Special Permit by the State Service of Geology and Mineral Resources of Ukraine, authorising full industrial production from the Stanivske licence for a 20-year term, during which the Company will be allowed to conduct both exploration and production activities. The new production licence replaces the previously issued five-year Special Permit for exploration, which expired on December 25, 2015 but not before the Company applied for the production licence. A 45 square kilometre 3D seismic program was acquired by the Company in 2013 on the original Stanivske exploration licence.


 The geological and geophysical studies of the seismic and previously drilled wells, leads the technical team to believe the licence could hold commercial quantities of hydrocarbons warranting further exploration drilling. Gas was discovered on the Stanivske licence by a prior operator in 1990 with the drilling of the Yab-2 well. There is currently no production nor any reserves associated with this field. To fund the exploration and development on this production licence, the Company is exploring its alternatives, including potential joint venture partners.



This company was left for dead earlier this year but the lowering of oil and gas royalty rates by the government of Ukraine, a desire by the government on reducing Russian gas imports, and a general better economic situation in Ukraine has led Cub to rally over 100% in the last couple of months. Company specific fundamentals also continue to improve. Risk averse investors may want to book some profits here as a double in a few months is extraordinary.

The fundamentals of the Ukraine economy and Cub Energy in particular argue for higher prices. I would note that the stock appears to have broken out to the upside recently. I expect further good news in 2017 and a higher stock price. You may recall that several years ago this was a $.40 stock. No reason this could not at least double from here. 


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