Cub Energy Inc. ("Cub", or the "Company") (TSX-V: KUB) announces the Rusko-Komarovske-22 ("RK-22") development well, on the Rusko-Komarovske ("RK") licence, in western Ukraine has tested gas at a maximum rate flow rate of 2.5 million cubic feet per day ("MMcf/d"). Cub is the owner and operator of the RK-22 well and has a 100% working
interest in the RK licence.
RK-22 Well
The RK-22 well location was identified by 3-D seismic acquired by Cub in early 2013 and is the first well drilled by Cub on the RK licence. The RK-22 well is approximately 640 metres northwest of the Company’s RK-2 legacy well and encountered gas in the Lukovskaya ("L") sands and Dorobratovskaya sands. The L sands were perforated over four intervals between 650 metres and 749 metres then subsequently flow tested through various choke sizes.
Mikhail Afendikov, Chief Executive Officer of Cub Energy, commented, "We are excited about the expected increase in reserves created by success on this 100-percent working interest well and our entire 2013-drilling program. We now look to continue increasing shareholder value in 2014 and will continue to work at further increasing our reserves and production profile from our assets in the black-sea region."The well achieved a maximum stabilised natural gas flow rate of 2.5 MMcf/d through a 10-millimetre choke with a well head tubing pressure of 814 pound-force per square inch ("psi") and a well head casing pressure of 867 psi.
The Company expects to have the RK-22 on production before year-end 2013 and anticipates a production exit rate between 1,900 and 2,100 barrels of oil equivalent per day ("boe/d"), which is in line with management’s previous forecast.
Additionally, with the completion of its facilities upgrade on its Eastern Ukraine assets, Cub expects to tie in an additional 275 to 350 boe/d within Q1 2014, which is currently behind pipe due to current capacity constraints. The Company has begun preparations to spud its second well on the RK licence in the first quarter of 2014 and will continue with further development of the RK licence in 2014.
Ukraine-Russia Gas Pricing Agreement
Cub is aware of the reported agreement on gas prices between Ukraine and Russia and is following developments closely. However, the details of the agreement and how they may affect industrial natural gas prices have not been released.
To date the Company’s realised natural gas sales price and netbacks have been unaffected. A further statement and update will be issued as soon as the Company has the factual details of the agreement.
