One of the major assets of Cub is a 30% stake in a gas producing entity called Kub-Gas. The other 70% was owned by a company called Serinus Energy. Earlier this year Serinus decided to exit Ukraine and sell its 70% stake in Kub-Gas. Cub Energy has the right of first refusal on any sale meaning that Cub gets the first crack at buying the assets.
Cub did not have the money to buy the Serinus assets. A private gas producer in Ukraine called Burisma is going to buy the Serinus share of Kub-Gas. Cub Energy will forgo its claim on right of first refusal and will earn an additional 10% share of Kub-Gas at no cost. Cub can also earn an additional 2.5% within a year.
This is great for Cub as it did not have the money to purchase the 70% that Serinus was selling. This will also partner Cub with the largest privately owned gas company in Ukraine. With the reduction in royalty rates Burisma should be interested in accelerating the development of the Kub-Gas assets.
Here is the press release from Cub Energy.
This is all happening as the government in Ukraine is pushing for more development of the gas resources in Ukraine.
Update: I misread the press earlier release on the earn in on Kub-Gas. It appears the first 5% can be earned by Cub Energy for no consideration. The other 5% of Kub-Gas can be earned "subject to certain benchmarks and optional payments."