Houston - Cub Energy Inc. ('Cub' or the 'Company') (TSX-V: KUB), a Ukraine-focused energy company, announced today its unaudited financial and operating results for the interim nine months ended September 30, 2021.
All dollar amounts are expressed in United States Dollars unless otherwise noted. This update includes results from Kub-Gas LLC ('Kub-Gas'), which Cub has a 35% equity ownership interest, Tysagaz LLC ('Tysagaz'), Cub's 100% owned subsidiary and CNG LLC ('CNG'), which Cub has a 50% equity ownership interest.
Patrick McGrath, CEO of Cub said: 'We are pleased to report $2,138,000 or $0.01 per share in net income during the nine months ended September 30, 2021. The increase in the price of natural gas was the primary contributor to the 2021 financial results. Cub also signed a letter agreement for the sale of its 35% equity interest in Kub-Gas for deemed consideration of $10.6 million. The proposed sale will deleverage Cub's balance and allow Cub to focus on its 100% owned assets and new opportunities
Operational Highlights
Achieved average natural gas price of $7.66/Mcf and condensate price of $69.16/bbl during the nine months ended September 30, 2021 as compared to $3.59/Mcf and $40.33/bbl for the comparative 2020 period.
Production averaged 513 boe/d (97% weighted to natural gas and the remaining to condensate) for the nine months ended September 30, 2021 as compared to 638 boe/d for the comparative 2020 period The power business generated 5,546 megawatts an hour ('MWh') from the Jenbacher power units in Western Ukraine for the period of commencement in mid May 2021 to September 18, 2021 at an average price of $71/MWh. Due to the recent material increase in natural gas prices and no parallel increase in power prices, the Company has increased its sales of natural gas at the RK field and temporarily suspended the power business as of September 18, 2021 as this strategy is more profitable at present. The Company will continue to monitor the prices of both commodities and utilize whichever one produces the better return for shareholders.
On September 7, 2021, the Company announced it had entered into a letter agreement to sell its 35% interest in KUB-Gas for a cash payment of $2,600,000 and settlement of approximately $8,000,000 in debt for total deemed consideration of approximately $10,600,000. The closing of the transaction is subject to the parties entering into a definitive agreement and regulatory approval.
The Company continues to work towards closing the sale of its 50% interest in CNG Holdings, which indirectly owns the Uzhgorod licence in western Ukraine. In consideration, the Company is to receive EUR800,000 for its 50% interest in CNG Holdings. The consideration consists of EUR600,000 in cash on closing and EUR200,000 is a contingent payment on certain future events including a commercial discovery. The closing is subject to certain conditions including Ukraine regulatory approval
Financial Highlights
The gross profit on the Company's gas trading business increased to $2,311,000 during the nine months ended September 30, 2021 as compared to $899,000 in gross profit in the comparative 2020 period.
The Company reported net income of $2,138,000 or $0.01 per share during the nine months ended September 30, 2021 as compared to a net loss of $2,274,000 or $0.01 per share during the comparative 2020 period.
Netbacks of $22.90/boe or $3.82/Mcfe were achieved for the nine months ended September 30, 2021 as compared to netback of $9.13/Boe or $1.52/Mcfe for the nine month comparative period in 2020.
About Cub Energy Inc.
Cub Energy Inc. (TSX-V: KUB) is a power and upstream oil and gas company, with a proven track record of exploration and production cost efficiency in Ukraine. The Company's strategy is to implement western technology and capital, combined with local expertise and ownership, to increase value in its undeveloped land base, creating and further building a portfolio of assets within a high commodity price environment.
Contact:
Patrick McGrath
Tel: (832) 499-6009
Email: patrick.mcgrath@cubenergyinc.com
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 Ukraine, the Black Sea Region and globally; political unrest and security concerns in Ukraine; industry conditions, including fluctuations in the prices of natural gas, power and foreign currency; 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 fourth 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.
CARCETTI CAPITAL CORP. 
