TSXV:KUB
Ukraine based and now Turquey, Kub is well positioned to become Blacksea monster. Exiting 2013 with 2000 BOE it is poised to ramp up production with it's western permits owned @ 100%.
Kub Energy Inc. is providing a fourth quarter operational update, including the seventh consecutive quarter of production growth, record quarterly production and a 2013 exit rate of approximately 2,070 barrels of oil equivalent per day (a 35-per-cent increase over the company's 2012 exit rate).
Fourth quarter update
Average production from the company's Ukrainian assets for the fourth quarter of 2013 was 1,687 boe/d, an 11.5-per-cent increase over third quarter production of 1,513 boe/d. Cub realized a significant increase in corporate production from the tie-in of its first 100-per-cent-working-interest (WI) well, the Rusko-Komarovskye-22 (RK-22) late in the fourth quarter. Average production for 2013 was 1,562 boe/d (an increase of 29 per cent over 2012 production of 1,210 boe/d).
During the fourth quarter Cub drilled, completed and brought on production the RK-22 well. The company announced in December the RK-22 well tested gas at a maximum flow rate of 2.5 million cubic feet per day. The well commenced production in late December and is currently producing approximately 1.9 million cubic feet per day, or 318 boe/d.
During the quarter, the company also commenced drilling of the Makeevskoye-17 (M-17) and began testing the Olgovskoye-24 (O-24) wells in eastern Ukraine. The M-17 and O-24 wells are operated by KUB-Gas LLC, a partially owned subsidiary in which Cub has a 30-per-cent ownership interest through its 30-per-cent shareholding of KUBGas Holdings Ltd.
Infrastructure development
The company continued work on the expansion of its Makeevskoye facilities designed to increase capacity from 30 million cubic feet per day to 68 million cubic feet per day for production from both the Makeevskoye and Olgovskoye fields. Upon completion of the expansion, Cub expects an increase in production from several wells that are currently flowing at restricted rate due to the current capacity of the facilities. Completion of the expansion project is expected during the first quarter of 2014.
Work program and budget 2014
The company expects to execute a capital expenditure budget of approximately $23-million to $27-million (net to Cub) for 2014 and is contingent on the level of operating cash flow.
The program will primarily focus on further development of producing assets in both the eastern and western Ukraine with plans to drill 11 wells (six with a 100-per-cent working interest and the balance with 25-per-cent to 30-per-cent working interest).
With the successful tie-in of the RK-22 well, Cub expects to commence drilling of the follow-up RK-21 well during the first quarter of 2014. Two additional wells are planned on the RK licence during the balance of the year.
Additionally, Cub expects additional production volumes through of program of workovers, fracture stimulations and re-entries on seven to 10 wells beginning in the first quarter of 2014.
Ukraine industrial gas pricing
Based on current legislation, the company expects first quarter industrial gas pricing to be between $10.00 (U.S.) and $11.00 (U.S.) per thousand cubic feet. All of the company's Ukraine production is marketed and sold to industrial end-users. |
