HOUSTON, TEXAS — (Marketwire) — 09/20/12 — Cub Energy Inc. (“Cub”, or the “Company”) (TSX VENTURE: KUB), announces the Company has arranged a line of credit (“LOC”) from Pelicourt Limited (“Pelicourt”) for up to USD $3,000,000.
Formalisation of the LOC between Cub and Pelicourt is subject to the entering into of customary agreements, including a loan agreement and a promissory note, which are at the time of this release under preparation.
The LOC is to be applied to the funding of ongoing development of Cub–s Uzhgorod, Rusko-Komarovske, Stanovo and Korolevskoye licences in the Transcarpathian Basin region of Western Ukraine (including the purchase of servicing equipment and production facility upgrades) to enable Cub to consolidate its position as one of Ukraine–s largest private sector gas producers. Cub has a 100% working interest in these four assets.
The LOC may be drawn down as required in tranches not less than USD $100,000. The Company will pay Pelicourt interest on the principal sum at an annual rate of 5% calculated and payable semi annually. Repayment of the principal sum and accrued interest is to be made to Pelicourt on 30 September 2013 but may be pre-paid in whole or part at any time without penalty. Drawdowns on the LOC will be subject to a customary set of conditions precedent. The Company has not granted any security for the LOC and the LOC is non-convertible.
Pelicourt is Cub–s largest shareholder. It is incorporated in Cyprus, is privately owned and operates as a holding company. Mikhail Afendikov, a director and the Chairman and Chief Executive Officer of Cub, holds a 31% indirect interest in Pelicourt and Robert Bensh, a consultant to Cub, holds a 7% indirect interest in Pelicourt. Mr. Afendikov declared his interest and did not vote on the Cub directors– resolution to approve the LOI.
About Cub Energy Inc.
Cub Energy Inc. is a TSX Venture Exchange company focused on the exploration and development of oil and gas in Ukraine. The company has offices in Houston, Texas, Toronto, Ontario and Kyiv, Ukraine. Cub has 174,000 acres, in nine fields, in the two major producing basins within Ukraine. The Company–s production and revenue is derived from nine licences. Five licences in Eastern Ukraine are owned and operated by KUB-Gas, LLC a subsidiary in which Cub has a 30% ownership interest, and four licences are in Western Ukraine in which Cub has a 100% ownership interest. The Company–s strategy is to use western technology and capital, combined with local expertise to create value in its underdeveloped land base, building a portfolio of high margin producing oil and gas assets. Cub shares are traded under the stock symbol KUB.
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Reader Advisory
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. CUB believes that the expectations reflected in the forward-looking information are reasonable; however there can be no assurance those 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: the entering into of formal loan documentation on anticipated terms, the initial and continued availability of funds from Pelicourt under the LOC, application by Cub of funds from the LOC, Cub–s anticipated market position in Ukraine, Cub–s ability to repay LOC advances; and 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.
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:
Cub Energy Inc.
Lionel C. McBee
Director of Investor Relations
(713) 677-0439