HOUSTON, TEXAS -- (Marketwire) -- 01/07/13 -- Cub Energy Inc. ("Cub" or the "Company") (TSX VENTURE: KUB), a Ukraine-focused upstream oil and gas company, announces 2012 exit rate of 1,531 barrels of oil equivalent ("Boe/d"); an increase in production volumes of 107% from 31 December 2011. Additionally, the Company announces that its board of directors has approved a 2013 capital expenditure ("CAPEX") budget of $26.7 million allocated to oil and gas activities on both its 100% owned western Ukraine assets and its joint venture eastern Ukraine assets operated by KUB-Gas LLC ("KUB-Gas"), a subsidiary in which Cub has a 30% ownership interest.
-- 2012 exit rate of 1,531 Boe/d with an additional 35 Boe/d currently shut in;-- Successfully drilled five wells, with a sixth currently drilling; a total of six wells were tied in for commercial production; took delivery of new snubbing unit and performed two dual completions of current producing wells;-- Acquired and interpreted 73 kilometres of 2D seismic on western Ukraine assets;-- Completion of Rusko-Komarovske ("RK") facilities upgrade and addition of compression facilities increase production from the RK-2 and RK-6 legacy wells by 162%, from .42 million cubic feet per day ("MMcf/d") to 1.1 MMcf/d;
2012 Production Exit Rate
The Company achieved exit production of 1,531 Boe/d an increase of 107% from the 2011 exit rate of 739 Boe/d. Cub estimates it has an additional 35 Boe/d of production that is currently shut in for well workovers.
Additionally, completion operations are underway at the Krutogorovskoye-7 ("K-7") and Makeevskoye-16 ("M-16") wells that had both reached their respective planned total depths in 2012. The Company expects testing results of the K-7 and M-16 wells in the first quarter of 2013.
In east Ukraine, 2012 production increases were the result of the successful execution of a multifaceted programme of exploration and development drilling, numerous well tie-ins and dual completion workovers of current producing wells.
In west Ukraine, Cub saw increased production from a combination of the RK-6 well workover and the addition of incremental compression capacity, which has increased Cub's production volumes from the two legacy wells, RK-2 and RK-6 to 1.1 MMcf/d. An increase of 112% prior to the compressor being tied in mid-December 2012.
2013 CAPEX Budget
The Company has allocated $6.2 million of the 2013 CAPEX budget to the drilling and completing of 3 net wells on its western Ukraine assets; $2.1 million for 3D seismic on the 100% owned and operated RK and Stanivske fields; to its joint-operated eastern Ukraine assets, $7.5 million to drilling and completion activities for 6 gross wells and $8.9 million for other oil and gas activities including completions, recompletions and seismic; and $1.8 million in general and administrative expenses.
As part of the 2013 drilling programme, in eastern Ukraine, Cub expects to drill four wells on the Olgovskoye field and two wells on the Makeevskoye field with one additional well possible. In west Ukraine, the Company expects to drill two wells on the RK field and one well on the Stanivske field.