HOUSTON, TEXAS -- (Marketwired) -- 07/03/13 -- Cub Energy Inc. ("Cub" or the "Company") (TSX VENTURE: KUB) announces a discovery at the Olgovskoye Production Licence. The Olgovskoye-15 ("O-15") well tested the S5 zone in the Serpukhovian aged reservoir at a maximum flow rate of 1.5 million cubic feet per day ("MMcf/d"). The O-15 well is operated by KUB-Gas LLC ("KUB-Gas"), a partially-owned subsidiary in which Cub has a 30% ownership interest.
The O-15 well was drilled as a directional well to evaluate the potential of the Bashkirian R30c and Serpukhovian S5 reservoir sands to further develop the gas production capability of the Olgovskoye Field. Well logs indicated potential gas pay in the R30c and in the deeper Serpukhovian S5 zone.
Gas was initially discovered in the S5 zone of the recently drilled Makeevskoye-16 ("M-16") well, which is located approximately 13 kilometres to the southeast of O-15, and tested at 4.3 mmcf/d in April 2013. Potential gas pay was also encountered in the B3 and R22 zones.
Testing of S5 Zone
The S5 zone was perforated over a 6-metre interval from 3,094 metres to 3,100 metres and flow tested for 2 days. The well was tested using various choke sizes achieving a maximum stabilised natural gas flow rate of 1.5 MMcf/d through a 6--millimetre choke at a flowing tubing head pressure of 8,600 kilopascals or 1,247 pound-force per square inch ("psi"). The reservoir pressure was measured at 4,468 psi and at this point no depletion is indicated.
It is anticipated that the well will be tied in to a nearby flow line, which will take the gas to the KUB-Gas processing facility at Makeevskoye (the "Makeevskoye Facility"). First production, which is expected in August of 2013, will be constrained by facility capacity. Cub recently announced that KUB-Gas has begun an expansion of the gas processing capacity of the Makeevskoye Facility to accommodate additional production from both the Olgovskoye Licence and continued development of the gas reservoirs discovered by the M-16 well. It is planned that after the upgrade, scheduled for completion by early 2014, the Makeevskoye Facility will have a capacity of more than 65 MMcf/d. The Company expects that capital expenditures for this project will not exceed US$6 million (US$1.8 million net to Cub).
The information obtained from the drilling and wireline logging of the O-15 well, together with the seismic data acquired previously over the Olgovskoye Licence, indicates potential for at least three additional well locations to fully develop the new S5 gas pool discovered with the drilling of the O-15 well. With the additional wells needed to develop the S5 gas pool, and some of the new drillable prospects which have been identified based on the success of both the O-15 and M-16 wells, the Company now has enough prospects for a continuous drilling program for at least two years. The M-16 test results were announced on April 9, 2013 and the tie-in of the M-16 well was announced on June 5, 2013.
About Cub Energy Inc.
Cub Energy Inc. (TSX VENTURE: KUB) 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, combined with local expertise and ownership, to increase value in its undeveloped land base, creating and further building a portfolio of producing oil and gas assets within a high pricing environment.
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