TORONTO, ONTARIO — (Marketwire) — 03/23/12 — CUB Energy Inc. (“CUB”, or the “Company”) (TSX VENTURE: KUB) is pleased to announce the filing today on SEDAR of the filing statement of CUB (the “Filing Statement”) in connection with its previously announced proposed reverse take-over transaction (the “Transaction”) with Gastek LLC (“Gastek”). Gastek–s principal asset is a 30% interest in KUB-Gas LLC (“KUB-Gas”), which is the holder of five oil and gas licenses situated in the northeastern part of Ukraine (the “Ukrainian Licenses”). Pursuant to the Transaction, CUB will acquire all of the outstanding units of Gastek from Pelicourt Limited, the sole unitholder of Gastek, in exchange for 123,278,089 common shares of CUB. The Filing Statement contains financial and other information concerning the business and affairs of each of CUB and Gastek and for the post-Transaction company.
The Transaction has been conditionally approved by the TSX Venture Exchange (the “TSXV”), subject to the satisfaction of listing conditions imposed by the TSXV. The Transaction has also been approved by the Ukrainian Anti-Monopoly Committee.
The completion of the Transaction is subject to a number of conditions set out in the securities exchange agreement dated January 26, 2012 (the “Securities Exchange Agreement”) among CUB, Gastek, Pelicourt and Pelicourt–s beneficial shareholders, Mikhail Afendikov, Valentin Bortnik, Andreas Tserni and Robert Bensh, a summary of which is set out in the Filing Statement. The Securities Exchange Agreement has been filed on SEDAR.
The completion of the Transaction is also subject to written approval of CUB shareholders holding at least a majority of the issued and outstanding common shares of CUB.
The Corporation anticipates that the Transaction will close in the final week of March, 2012.
On November 25, 2011, CUB announced the closing of a private placement which included the issuance of 4,490,844 subscription receipts (the “Subscription Receipts”) at a price of $0.40 per Subscription Receipt, each exercisable into one common share of CUB. The gross proceeds of the Subscription Receipts sold ($1,796,337) are being held in escrow by a third party in a segregated account. The gross proceeds of the Subscription Receipts shall only be released to CUB upon exchange of the Subscription Receipts for CUB common shares upon satisfaction of the Escrow Release Conditions (as defined below). The Subscription Receipts shall be automatically exchanged for CUB common shares for no additional consideration and without any further action of the holder at such time as there are sufficient Common Shares and/or other securities of the Corporation then outstanding such that the exercise of the Subscription Receipts shall not cause the holder thereof to become an insider (within the meaning of securities laws and the policies of the TSXV) of CUB (the “Escrow Release Condition”) and may not be exchanged prior to the occurrence thereof. In the event that the Subscription Receipts are not exchanged on or before 5:00 p.m. (Toronto time) on March 31, 2012 (the “Release Deadline”), the Subscription Receipts shall be null and void as at the Release Deadline and the holder shall be entitled to receive from the escrow agent the subscription proceeds and accrued interest without deduction. CUB anticipates that the closing of the Transaction will satisfy the Escrow Release Conditions.
In connection with the closing of the Transaction, CUB proposes to issue as a one-time bonus to Gregory Cameron, an officer and director of CUB, 750,000 CUB common shares at a deemed price of $0.40 per share, as set out in the Filing Statement. The issuance of such shares is subject to the written consent of disinterested CUB shareholders holding at least a majority of the issued and outstanding common shares of CUB.
The board of directors and officers of CUB, upon the completion of the Transaction, will be as follows:
A biography for each director and officer is set out in the Filing Statement. Mr. Bensh, elected to the board of directors of the Company at the annual and special meeting of shareholders held December 2, 2011, has stepped down from the board and executive positions.
Continuance
On February 28, 2012, CUB completed its continuance under the Canada Business Corporations Act (the “Continuance”). Details of the Continuance are set out in the management information circular of the Company dated October 27, 2011 and was approved by shareholders of the Company at the annual and special meeting of shareholders held December 2, 2011.
KUB-Gas Update
On March 20, 2012, Kulczyk Oil Ventures Inc. (“Kulczyk”) announced by way of press release (the “Kulczyk Press Release”) a summary of its reserves and resources volumes and estimated value for its 70% ownership interest in the Ukrainian Licenses effective as of December 31, 2011 as evaluated by its independent reserves engineers. Gastek has not independently verified the information contained in the Kulczyk Press Release, but notes that the effective date of information contained in the Kulczyk Press Release is more current than the information set out in the “Statement of Reserves Data and Other Oil and Gas Information” included in the Filing Statement and that the information contained in the Kulczyk Press Release would suggest that the reserves and resources attributable to the Ukrainian Licenses has declined since July 31, 2011. A copy of the Kulczyk Press Release is available on Kulczyk–s profile on .
The Company also refers to the press release of Kulczyk dated March 22, 2012, reporting that the Makkevskoye 21 (“M-21”) well in the Makeevskoye Field, in north-eastern Ukraine has been cased to total depth after encountering several gas-bearing reservoirs one of which correlates to the producing zone in the M-19. The M-21 well is operated by KUB-Gas.
About CUB Energy Inc.
CUB Energy Inc. is a Canadian-based company focused on the exploration and development of oil and gas reserves in Eastern Europe. In the Transcarpathian basin of Ukraine, CUB is the 100% owner and operator of a 20-year production licence with a gas producing asset, as well as three exploration licences with exploration targets and a further development opportunity on a total of 300 square kilometres. The Corporation–s strategy is to use proven technology, capital, and expertise to grow the reserves base and build a portfolio of low cost gas production assets in Eastern Europe to capitalize on high regional gas prices. CUB shares are traded on the TSX Venture Exchange under the stock symbol KUB.
Reader Advisory
Completion of the Transaction is subject to a number of conditions, including but not limited to final TSXV acceptance and written approval of shareholders holding at least a majority of CUB common shares. The Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the Filing Statement of CUB prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of CUB should be considered to be highly speculative.
Except for statements of historical fact, this news release contains certain “forward-looking information” within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate” and other similar words, or statements that certain events or conditions “may” or “will” occur. In particular, forward-looking information in this press release includes, but is not limited to, statements with respect to, the completion and timing of the Transaction. CUB believes that the expectations reflected in the forward-looking information are reasonable, however there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.
Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors that could cause the results to differ materially from those expressed in the forward-looking information include, but are not limited to: general economic conditions in the Ukraine and globally; industry conditions, including fluctuations in the prices of natural gas; governmental regulation of the natural gas industry, including environmental regulation; unanticipated operating events or performance which can reduce production or cause production to be shut in or delayed; failure to obtain industry partner and other third party consents and approvals, if and when required; competition for and/or inability to retain drilling rigs and other services; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; stock market volatility; volatility in market prices for natural gas; liabilities inherent in natural gas operations; competition for, among other things, capital, acquisitions of reserves, undeveloped lands, skilled personnel and supplies; incorrect assessments of the value of acquisitions; geological, technical, drilling, processing and transportation problems; changes in tax laws and incentive programs relating to the natural gas industry; failure to realize the anticipated benefits of acquisitions and dispositions; and the other factors. Readers are cautioned that this list of risk factors should not be construed as exhaustive.
This cautionary statement expressly qualifies the forward-looking information contained in this news release. We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.
Information contained herein under the heading “KUB-Gas Update” is taken from or based upon the press releases of Kulczyk dated February 20, 2012 and February 22, 2012, respectively. Such information has not been independently verified by CUB, and CUB makes no representation or warranty with respect to the accuracy of such information.
The TSX Venture Exchange has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Contact Financial
Mas Kobuchi
(604) 618-1768