Cub Energy Announces First Quarter Results

Source: www.gulfoilandgas.com 5/26/2021, Location: Asia

Energy Inc., a Ukraine-focused energy company, announced today its unaudited financial and operating results for the three months ended March 31, 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, Interim CEO of Cub said: “We are pleased to report $709,000 in profit from our gas trading business during the first quarter which resulted in the Company reporting net income of $263,000 for the three months ended March 31, 2021. The key driver in the financial performance was the increase in the natural gas price to $5.90/mcf during the current quarter. We also had operational success with the installation of the two Jenbacher power units and achieved commercial power generation mid-way through the second quarter of 2021.”

Operational Highlights
• Achieved natural gas price of $5.90/Mcf and condensate price of $67.86/bbl during the three months ended March 31, 2021 as compared to $3.45/Mcf and $36.251/bbl for the comparative 2020 period. The increase is due, in large part, t a colder Europen winter and the lessoning global impacts of COVID-19 on commodity prices.
• Production averaged 555 boe/d (97% weighted to natural gas and the remaining to condensate) for the three months ended March 31, 2021 as compared to 646 boe/d for the 2020 period.
• The Company’s two Jenbacher power units were installed in the first quarter of 2021 and commenced commercial production subsequent to the quarter end. The power generation units have the capacity to produce as much as 3 megawatts (“MW”) of power and utilize the Company’s wholly-owned RK gas field.
• On April 30, 2021, the Company announced it had entered into a share purchase agreement (“SPA”) to sell its 50% interest in CNG Holdings, which indirectly owns the Uzghorod licence in western Ukraine. In consideration, the Company is to receive €800,000 (US $970,000) for its 50% interest in CNG Holdings. The consideration consists of €600,000 (US $728,000) in cash on closing and €200,000 (US $242,000) 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 $709,000 during the three months ended March 31, 2021 as compared to $134,000 in gross profit in the comparative 2020 period.
• The Company reported net income of $263,000 or $0.00 per share during the three months ended March 31, 2021 as compared to a net loss of $706,000 or $0.00 per share during the 2020 comparative period.
• Netbacks of $17.31/boe or $2.88/Mcfe were achieved for the three months ended March 31, 2021 as compared to netback of $5.40/Boe or $0.90/Mcfe for the 2020 first quarter.

Reader Advisory
With the current cash resources, negative working capital, fluctuating commodity prices, currency fluctuations, reliance on a limited number of customers, 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.


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