Cub Energy Announces Second Quarter Results

Source: 8/25/2021, Location: Asia

Cub Energy Inc., a Ukraine-focused energy company, announced today its unaudited financial and operating results for the interim six months ended June 30, 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, CEO of Cub said: “We are pleased to report $1,488,000 in profit from our gas trading business during the six months ended June 30, 2021 which resulted in the Company reporting net income of $746,000 for the same period. This was the best net income growth in over two years. Other significant accomplishments during the current period include the commencement of commercial production of the new power generation business and entering into an agreement to divest its non-core western Ukraine licence for proceeds of up to approximately $1 million.”

Operational Highlights
• Achieved average natural gas price of $6.50/Mcf and condensate price of $68.12/bbl during the six months ended June 30, 2021 as compared to $2.77/Mcf and $33.01/bbl for the comparative 2020 period. The increase in commodity prices is due, in large part, to a colder European winter, the lessening global impacts of COVID-19 and geopolitical events.
• The Company’s two Jenbacher power units were installed and commenced commercial production in the second quarter of 2021. The power generation units produced 2,253 megawatts an hour (“MWh”) for the period of commencement in mid May 2021 to June 30, 2021 at an average price of $73/MWh.
• Production averaged 532 boe/d (97% weighted to natural gas and the remaining to condensate) for the six months ended June 30, 2021 as compared to 648 boe/d for the comparative 2020 period.
• 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 Uzhgorod 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 and is expected to close in Q4 2021.

Financial Highlights
• The gross profit on the Company’s gas trading business increased to $1,488,000 during the six months ended June 30, 2021 as compared to $332,000 in gross profit in the comparative 2020 period.
• The Company reported net income of $746,000 or $0.00 per share during the six months ended June 30, 2021 as compared to a net loss of $1,900,000 or $0.01 per share during the 2020 comparative period.
• Netbacks of $19.17/boe or $3.20/Mcfe were achieved for the six months ended June 30, 2021 as compared to netback of $3.77/Boe or $0.63/Mcfe for the six month comparative period in 2020.

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