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Cub Energy Inc.


Cub Energy Inc. is an upstream oil and gas company with a proven track record of exploration and production cost efficiency in the Black Sea region. The company's strategy is to implement western technology and capital along with local expertise and ownership to increase value in its undeveloped land base, creating and building a portfolio of producing oil and gas assets within a high pricing environment.

The information provided below is from analysts, newsletters and other contributors. Please contact the company and visit its website before making an investment decision.

Expert Comments:

The Energy Report Interview with Chen Lin (12/11/14) "Cub Energy Inc. is drilling in Ukraine. Unfortunately, more than half of its production is in East Ukraine, a conflict area. It is still producing, but it cannot drill more wells. It is, however, getting good results from West Ukraine. Cub is a good, long-term Ukraine gas play." More >

Christopher Brown, Canaccord Genuity (10/10/14) "Cub Energy Inc. provided a Q3/14 operational update that was largely in line. Average production for the quarter was 2,174 boepd, reflecting a 16% increase from the 1,868 boepd reported in Q2/14; the quarter-over-quarter increase was largely attributable to the M-17 well in Eastern Ukraine."

Etienne Moshevich, (6/19/14) "Cub Energy Inc. has announced drilling of the North Makeevskoye-4 exploration well commenced on June 16, 2014. . .as the Ukraine/Russia fiasco settles, the company could have a positive move to the upside so make sure to keep it on watch!"

The Energy Report Interview with Christopher Brown (5/22/14) "We cover Cub Energy Inc., [which has] operations in eastern Ukraine. We are cautiously optimistic on [the company]. The reason for caution is that on a gas pricing basis, and netback basis, there was concern when Russia lowered gas prices in the region. We saw a bit of pressure on gas prices in the first quarter, but now we are starting to see Russia decoupling, it will no longer be able to sell low-cost gas to the Ukrainians. That decoupling will fantastically benefit Cub's netbacks in the Ukraine. We are going to see an upward movement of the gas price into the $1012 per thousand cubic feet ($1012 Mcf), which will be amazingly profitable. Both companies have fallen under the investment radar, because no one wants to look at Ukrainian investments right now. In terms of being a contrarian regarding the Russian impact on the Ukraine, Cub and Serinus provide great entry opportunities at their current trading prices." More >

Christopher Brown, Canaccord Genuity (5/19/14) "Cub Energy Inc. announced successful test results from its 100% working interest RK-21 well in Western Ukraine. The well, which comprises a portion of Cub's 2013 reserve volumes, flowed at 2.6 MMcf/d. . .we believe the company's Western assets are becoming an increasingly important part of its portfolio, given its 100% working interest and relatively stable geo-political context. . .we reiterate our Buy recommendation."

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Etienne Moshevich, (4/28/14) "Cub Energy Inc. has provided an operational update on its Rusko-Komarovske-21 (RK-21) development well. The well has reached a total measured depth of 1,818m with multiple gas-bearing zones. The RK-21 well spud in March 2014 and is the second well for Cub to drill on the RK license and company has commenced completion operations and will begin testing selected zones that appear to be gas-bearing. . . to date the political unrest in Ukraine has had no material impact on the company's operations. . . .the stock has taken a hit, trading at $0.14/share, but could see a strong rebound once the climate in the east is settled."

The Mining Report Interview with Etienne Moshevich (4/15/14) "I follow Cub Energy Inc., which has assets in Ukraine. The company is doing about 1,800 boe/d. Mikhail Afendikov, its president and CEO, has lots of experience in the region. The company just announced that it is drilling its O-11 development well. Cub owns 30% of that well. . .KUB-Gas LLC is Cub Energy's subsidiary. Cub Energy has a 30% ownership interest in KUB-Gas. Cub's netbacks are very high, something I look for when evaluating oil and gas companies." More >

Christopher Brown, Canaccord Genuity (3/26/14) "Currently, Cub Energy Inc. is producing ~1,800 boe/d and is beginning to ramp up production on its Makeevskoye and Olgovskoye blocks following the commissioning of new facilities on March 6, 2014. . .in 2013, the company had several commercial discoveries and was able to convert its Krutogorovskoye licence in eastern Ukraine to a 20-year production license. . .year-over-year, the value of Cub's 2P reserves increased from $122.1M to $127.9M (after-tax, NPV10). Given Cub's current market cap of ~CA$60M, we maintain our Buy recommendation and CA$0.55/share target price."

Etienne Moshevich, (3/21/14) "Cub Energy Inc. announced that the Makeevskoyee-17 (M-17) well has been cased to a total depth of 3,445m. The operator, KUB-Gas Ltd., is now preparing to complete, test and tie in M-17. . .Cub announced it has commenced drilling of the Rusko-Komarobske-21 development well in western Ukraine, the second well to drill on the Rusko-Komarobske license."

Etienne Moshevich, (1/27/14) "With such high net backs and 11 new drill locations for 2014 already targeted, Cub Energy Inc. is definitely a company you need to keep on your watch screens. . .with increased exposure and positive drilling on its wells, the company definitely has the potential to generate investors a great return in 2014."

Garett Ursu, Cormark Securities (1/22/14) "Cub Energy Inc. provides investors with exposure to low-risk, high-rate conventional natural gas targets in Eastern and Western Ukraine and unconventional oil in Turkey. . .as the company continues to boast a solid production base with material upside, we continue to rate the stock Buy."

Christopher Brown, Canaccord Genuity (1/13/14) "Cub Energy Inc. announced that its Makeevskoye facilities are now expected to be commissioned in Q1/14. The company also reported Q4/13 production levels of 1,687 boepd and an exit rate of 2,070 boepd, which reflects a 35% increase over the 2012 exit rate."

Jin Yan, Casimir Capital (11/22/13) "Cub Energy Inc. released its Q3/13 financial and operating results. . .production averaged 1,513 boe/d in Q3/13, slightly up from 1,490 boe/d in Q2/13. . .Cub received a $1.5M cash dividend from the Kub-Gas JV in Q3/13 and an additional $1.5M in Q4/13, bringing the total cash dividend received this year to an impressive $8.4M. . .Kub-Gas drilled and tested several wells successfully into the deeper Serpukhovian zone during Q3/13. . .the gas processing facility expansion for the M and O fields is on track to be completed by Q1/14."

Christopher Brown, Canaccord Genuity (11/19/13) "Q3/13 marks Cub Energy Inc.'s sixth consecutive quarter of production growth. . .the company currently has positive working capital of $3.8M, with $5M in undrawn lending facilities. . .Cub has commenced processing and interpreting 3-D seismic on three of its new 100%-interest blocks in eastern Ukraine. . .[given] the company's track record of exploration success, along with its high netbacks, low drilling costs and significant growth potential, we reiterate our Buy recommendation and a target price of CA$0.70/share."

Morning Coffee (11/11/13) "According to Bloomberg, Royal Dutch Shell Plc will drill as many as 15 wells next year to complete the initial exploration appraisal of the 8,000sq km Yuzivska field in Ukraine. . .the spotlight on Ukrainian shale gas development may benefit the likes of Cub Energy Inc., a junior international oil and gas producer with exploration and development opportunities in the country. . .Cub trades at a relative discount to its peers. . .the company's pace of development and exploration is expected to accelerate over the next 18 months. Through year-end 2014, Cub is expected to have a busy drilling and completions program."

The Energy Report Interview with Christopher Brown (11/7/13) "On the Ukrainian side, Cub Energy Inc. has done well at introducing new technologies to the country. Cub has received the approvals to bring in this new technology and apply it. It's going to be a slow process, but as the company continues to unlock value, there's no denying that its region and fiscal terms are very good and provide a lot of incentive to keep on working hard to grow the production base. Turkey hosts a more difficult unconventional basin. The Anatolia Basin is still in its earlier stages, whereas the Ukrainian assets have some proven opportunities. In the Anatolia Basin, you do have some majors that are tentatively playing around the edges, but there has not yet been anything that's really unlocked that basin. But it didn't cost Cub much to enter the basin and the Turkey play provides shareholders with potential future value, which they don't pay for at Cub's current share price.

". . .History has proven Ukraine has access to significant volume. That's why Cub is in this country: It believes it can unlock more value. . .through its ownership in a separate private holding company (Pelicourt Ltd.), management holds a major position in Cub Energy, and recently it decided to put in additional dollars to show confidence in the future of Cub. As of its last statement in October 2013, it owns 39.54% of the shares outstanding. That's provided a decent amount of market support." More >

Garett Ursu, Cormark Securities (10/22/13) "Cub Energy Inc. announced record production out of Ukraine following the successful fracture stimulation of the Olgovskoye-4 and Oglovskoye-5 wells. . .the successful stimulation of the O-4 and O-5 wells within the KUB-Gas partnership has pushed Ukrainian volumes to a record while also positioning the company for a very strong Q1/14. . . Cub Energy remains one of the most attractive small-cap names in our international universe with a strong production and cash-flow base, material upcoming catalysts, potential new plays being evaluated and a top-tier operations and management team."

Christopher Brown, Canaccord Genuity (10/21/13) "Cub Energy Inc. announced that corporate production rates have reached a new high of ~1,670 boe/d following two successful fracture stimulations on the Olgovskoye licence in Eastern Ukraine. Following stimulations, the O-4 and O-5 wells produced 4 and 1.3 MMcf/d, respectively; the O-4 well, which generated one of Cub's highest test rates to date, has been tied-in and is currently producing 3.9 MMcf/d. . .the company's facility expansion in Eastern Ukraine is expected to be complete in early 2014, which should generate a step change in production."

Jin Yan, Casimir Capital (10/9/13) "Cub Energy Inc. plans to begin testing its shale oil acreage next year through the drilling of a horizontal, multistage fracked well in the Bismil license. A rig has been secured for the RK-22 development well, scheduled to spud in mid-October. The well is targeting 2 Bcf in the D-series zones, which are currently producing for the legacy RK-2 well. Pelicourt Ltd. recently extended Cub's existing $3M line of credit to $5M, providing added financial flexibility for the company to carry out its work program."

Jin Yan, Casimir Capital (9/5/13) "Cub Energy Inc. released an operational update this morning and announced it has received a 20-year production license for the K field (30% working interest), where the K-7 exploration well tested at 5.9 Mmcf/d earlier this year. . .the value of the K field is significantly enhanced as the special permit has removed the production limit set by the state. Currently a marginal producing field, the K field has potential to see higher production and reserves with a full production license in place."

Jin Yan, Casimir Capital (8/1/13) "Cub Energy Inc. announced yesterday morning the North Makeevskoye-3 well recovered oil and gas from a new, deeper reservoir. . .it is the most successful exploration well drilled by the company in the North Makeevskoye (NM) license to date. Cub has now identified a new productive reservoir and the well with the greatest potential for commercial production. The presence of oil here is highly encouraging, and opens up the NM for new drilling opportunities."

Garett Ursu, Cormark Securities (6/28/13) "Cub Energy Inc. provides investors with exposure to low-risk, high-rate, conventional natural gas targets in eastern and western Ukraine and unconventional oil and gas in Turkey. . .the acquisition of Anatolia Energy Ltd. for 13.9M shares of Cub adds more than 1.2M gross acres of land, ~$2.5M in cash and inventory and, most importantly, 94 MMbbl (gross) of unconventional oil potential in Turkey. . .Cub remains one of the most attractive companies in our universe."

Christopher Brown, Canaccord Genuity (6/10/13) "Through modern technology and technical expertise, Cub Energy Inc. has successfully unlocked a self-sustaining development program and is currently ramping up production in Ukraine. Recently, the company made an entry into the Anatolia basin of Turkey, and in our view, both regions offer a combination of attractive fiscal regimes and correspondingly high netbacks. We believe that in a very short period, Cub has proven its ability to convert geological concepts into deliverable success. . .we are initiating coverage with a Buy recommendation."

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