Monday, February 6, 2017
Cub Energy (KUB.V) partner Burisma Group to spend $3 billion in Ukraine during 2017
International Energy Group Burisma will be ramping up investment in 2017, announced the Group’s CEO for Ukrainian operations and General Manager of the Energy Service Company “ESCO Pivnich” Taras Burdeinyi. Capital spending by Ukraine’s largest independent gas producer is expected to exceed $3 billion. At the same time, the Group is planning to drill 20 new wells with a total depth of circa 100 km.
“In January, the Group started drilling four new wells on Karaykozivske, Vodyanivske and Veselkivske fields, with three out of four – more than 5000 meters deep with a complex profile and deviation from the vertical of over one kilometer. The projected depth of the well on Vodyanivske field is around 5900 meters, which is new record for Burisma. We have also commissioned projects on another five wells, the rest – are already under way” – says Taras Burdeinyi.
The development and commissioning of new wells, as well as the use of technologies for intensification of hydrocarbon production on 15 wells will allow our operating companies to reach production volumes of about 1.8-2 billion cubic meters by the end of this year. Burisma Group is one of the leading private gas companies in Ukraine in terms of production volumes with circa 30% among all independent gas producers.
Cub Energy owns 35% of Kub-Gas and Burisma owns the other 65%. I am not sure how many of these wells will be drilled on the partnerships land (Kub-Gas accounts for about 25% of Burisma's prodcution),. However I suspect that we will see a substantial amount of investment. Three billion is alot of money and it appears that Burisma is going big. Cub Energy (KUB.V) is looking really good for 2017 and beyond. The stock recently fell due to a flareup in fighting in eastern Ukraine. However the news reports I have read show that the fighting has already died down.
The drop in price should be temporary as Cub should be reporting an operational update very soon.