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Gold/Mining/Energy : KUB.V - Cub Energy Inc.

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From: JRod775/21/2020 5:48:38 PM
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So as we expected, Q1 was not going to be good. Reason being that around $500,000 USD was spent on the M30 well and that was factored into this quarter. At the same time, KUB has $6.1 million USD in cash(minus $1.7 mil with RK field equipment purchase as of recent), and then the company presentation below shows work happening on all 5 leases this year. On top of that, cost cutting measures were implemented(see below) where 11 team members were layed off, not sure if that includes the $60k a year director, along with other savings. So I feel that the cost reductions will help a lot.
New company presentation:
2020-05-21 14:49 MT - News Release

Mr. Mikhail Afendikov reports


Cub Energy Inc. has released its unaudited financial and operating results for the interim three months ended March 31, 2020. 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.

Mikhail Afendikov, Chairman and CEO of Cub said: "In April 2020, we made a capital commitment to purchase two Jenbacher power generation units in order to better utilize the Company's RK field in western Ukraine to generate potential cashflow for the Company."

Operational Highlights

  • Achieved average natural gas price of $3.45/Mcf and condensate price of $36.25/bbl during the three months March 31, 2020 as compared to $7.11/Mcf and $42.57/bbl for 2019. The decrease is due, in large part, to increased volumes of gas stored in Europe and a warmer than expected winter in Europe.
  • Production averaged 646 boe/d (97% weighted to natural gas and the remaining to condensate) for the three months March 31, 2020 as compared to 895 boe/d for 2019.
  • In April 2020, the Company has signed a contract for the purchase of two Jenbacher gas power generation engines that should convert the natural gas produced from the RK field into power that can be sold in western Ukraine at local market rates. Each power generation unit will have the capacity to produce as much as 1.5 megawatts ("MW") of power each or 3 MW in total. The RK field was materially suspended on April 1, 2016 and this new plan should result in the restart of the RK field.
Financial Highlights

  • The Company reported a net loss of $706,000 or $0.00 per share during the three months March 31, 2020 as compared to net income of $962,000 or $0.00 per share during 2019.
  • Netbacks of $5.40/boe or $0.90/Mcfe were achieved for the three months March 31, 2020 as compared to netback of $24.49/Boe or $4.08/Mcfe for 2019.
  • The Company has implemented certain cost-cutting initiatives during the second quarter of 2020, including the layoff of eleven team members, salary and director fee reductions, the signing of office leases at lower rent levels and a general decrease in the use of external consultants.
Reader Advisory

With the current cash resources, negative working capital, suspension of the RK field, uncertainty surrounding the successful installation of the Jenbacher power generation units, fluctuating commodity prices, dividend uncertainty, currency fluctuations, reliance on a limited number of customers, and impact on carrying values, the Company may not have sufficient cash to continue the exploration and development activities. These matters raise significant doubt about the ability of the Company to continue as a going concern and meet its obligations as they become due.

                                              Three Months Ended  Three Months Ended (in thousands of US Dollars)                      March 31, 2020      March 31, 2019  Petroleum and natural gas revenue                             66                  49  Pro-rata petroleum and natural gas revenue(1)              1,262               3,452  Revenue from gas trading(2)                                2,204               4,479  Net income (loss)                                          (706)                 962  Income (loss) per share - basic and diluted               (0.00)                0.00  Funds generated from (used in) operations                    350                (35) Capital expenditures(3)                                        -                   -  Pro-rata capital expenditures(3)                             851                  56  Pro-rata netback ($/boe)                                    5.40               24.49  Pro-rata netback ($Mcfe)                                    0.90                4.08  
                             March 31, 2020  December 31, 2019 Cash and cash equivalents        6,100            6,206 

  • Pro-rata petroleum and natural gas revenue is a non-IFRS measure that adds the Company's petroleum and natural gas revenue earned in the respective periods to the Company's 35% equity share of the KUB-Gas natural gas sales that the Company has an economic interest in.
  • During the three and twelve months ended March 31, 2020, the Company recorded $2,204,000 (2019 - $4,479,000) and $2,070,000 (2019 - $4,240,000) in revenue for gas trading and $134,000 (2019 - $239,000).
  • Capital expenditures include the purchase of property, plant and equipment and the purchase of exploration and evaluation assets. Pro-rata capital expenditures are a non-IFRS measure that adds the Company's capital expenditures in the respective periods to the Company's 35% equity share of the KUB-Gas and 50% equity share of CNG Holdings capital expenditures that the Company has an economic interest in.
Supporting Documents

Cub's complete quarterly reporting package, including the unaudited interim financial statements and associated Management's Discussion and Analysis, have been filed on SEDAR ( and has been posted on the Company's website at

About Cub Energy Inc.

Cub Energy Inc. (TSX-V: KUB) is an 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 producing oil and gas assets within a high pricing environment.

We seek Safe Harbor.

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