HOUSTON, TEXAS--(Marketwire - Sept. 3, 2012) - Cub Energy Inc. ("Cub", or the "Company") (TSX VENTURE:KUB), reports the Makeevskoye-20 ("M-20") well in Ukraine has tested gas at a rate of 5.3 million cubic feet per day ("MMcf/d"). The Company also provides an update on testing of the North Makeevskoye-1 ("NM-1") well and current operations. The Company's production and revenue is derived from nine licenses in Ukraine. Five licenses in Eastern Ukraine are owned and operated by KUB-Gas LLC ("KUB-Gas"), a subsidiary in which Cub has a 30% ownership interest, and four licenses in Western Ukraine in which Cub has a 100% ownership interest. M-20, NM-1 and M-16, are operated by KUB-Gas.
- M-20 well tests natural gas at a rate of 5.3 MMcf/d through a 10mm choke;
- NM-1 testing does not produce gas despite logs indicating gas-charged intervals. The Company is now evaluating stimulation options, including fracking;
- M-16 well drilling at 1,905 metres with a projected TD of 3,850 metres;
- August production at 1,246 boe/d.
The M-20 well was perforated in the R8 zone. Gas reached surface in one minute and flowed at a rate of 5.3 MMcf/d through a 10 mm choke. The Company expects to have the well tied in for production in the fourth quarter.
The M-20 well was drilled to a total depth ("TD") of 2,000 metres and cased to TD in early August. The primary objective of the well was to evaluate the potential of the R8 zone at a depth of approximately 1,450 metres and further develop the Makeevskoye R8 Pool. The R8 Pool was originally discovered by the Makeevskoye-19 ("M-19") in the second half of 2010. The pool was extended approximately 1 kilometre to the west by the Makeevskoye-21 ("M-21") well and now has been extended approximately 1 kilometre to the east by the M-20.
North Makeevskoya License
The NM-1 well, the initial exploration well on the North Makeevskoya License, reached a TD of 2,500 metres and was cased to TD in June 2012. Evaluation of both the wireline logs and information obtained during the drilling of the well indicates potential for hydrocarbon accumulation in both Bashkirian and Serpukhovian aged sediments. Two reservoir units are within a 70-metre thick limestone interval and another appears to be within a 30 metre thick sandstone. Testing of both the sandstone and the carbonate indicates that these reservoirs do not have sufficient permeability to produce without stimulation. The Company is reviewing stimulation options for the sandstone, including potential fracture stimulation.
The North Makeevskoya 3D seismic survey has thus far identified five additional prospects and interpretation is on going. Subject to permitting, the first of the additional structural prospects is expected to be evaluated by the drilling of the North Makeevskoya-2 ("NM-2") well near the end of 2012. NM-2 is located in the southern part of the North Makeevskoya License only 4 kilometres north of the Makeevskoye gas production facility.
The M-16 well has a projected TD of 3,850 metres. The Company commenced drilling in early August and estimated 90 days to reach TD. The M-16 well is currently drilling at a depth of 1,905 metres. The well is being drilled to evaluate a prospect with multiple potential Carboniferous reservoirs. The upper portion will be an appraisal well to evaluate Contingent Resources targeting a structure defined by 3D seismic. This structure, with stacked reservoir units in the Bashkirian and Upper Serpukhovian sections, has tested natural gas elsewhere within the Makeevskoye field. The deeper portion will be an exploration well crossing a fault to test a deep structure which will help evaluate the hydrocarbon potential of deeper formations in the Lower Serpukhovian and potentially in the deeper Visean sections. A discovery in these deeper sediments would open up new opportunities for reserve and production growth.
Cub's average production during the month of August from both the Eastern and Western gas wells is over 1,246 boe/d. Gas price for the month of August is US$11.75.
About CUB Energy Inc.
Cub Energy Inc. is a TSX Venture Exchange company focused on the exploration and development of oil and gas in Ukraine. The Company has offices in Houston, Texas, Toronto, Ontario and Kyiv, Ukraine. Cub has 110,000 net acres, in nine fields, in the two major producing basins within Ukraine. The Company's strategy is to use western technology and capital, combined with local expertise to create value in its undeveloped land base, building a portfolio of high margin producing oil and gas assets. Cub shares are traded under the stock symbol KUB.
Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. CUB believes that the expectations reflected in the forward-looking information are reasonable; however there can be no assurance those expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.
Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors that could cause the results to differ materially from those expressed in the forward-looking information include, but are not limited to: general economic conditions in the Ukraine and globally; industry conditions, including fluctuations in the prices of natural gas; governmental regulation of the natural gas industry, including environmental regulation; unanticipated operating events or performance which can reduce production or cause production to be shut in or delayed; failure to obtain industry partner and other third party consents and approvals, if and when required; competition for and/or inability to retain drilling rigs and other services; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; stock market volatility; volatility in market prices for natural gas; liabilities inherent in natural gas operations; competition for, among other things, capital, acquisitions of reserves, undeveloped lands, skilled personnel and supplies; incorrect assessments of the value of acquisitions; geological, technical, drilling, processing and transportation problems; changes in tax laws and incentive programs relating to the natural gas industry; failure to realize the anticipated benefits of acquisitions and dispositions; and the other factors. Readers are cautioned that this list of risk factors should not be construed as exhaustive.
This cautionary statement expressly qualifies the forward-looking information contained in this news release. We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.
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