HOUSTON, TEXAS — (Marketwire) — 04/01/13 — Cub Energy Inc. (“Cub” or the “Company”) (TSX VENTURE: KUB) announces the results of its independent reserves evaluation as of December 31, 2012 on its oil and gas properties in Ukraine. The evaluation was conducted by RPS Energy Consultants LLC (“RPS”), an independent qualified reserves evaluator and auditor, on the Company–s properties in Ukraine in its report dated 20 March 2013 (“The RPS Report”). All evaluations were prepared using guidelines outlined in the Canadian Oil and Gas Evaluation Handbook (“COGE Handbook”) and are in accordance with National Instrument 51-101 National Standards of Disclosure for Oil and Gas Activities (“NI 51-101”).
HIGHLIGHTS:
The December 31, 2012 estimated future net cash flows from reserves, discounted at an annual rate of 10%, before income taxes (“PV-10”) is $79.3 million for proved reserves and $146.2 million for 2P reserves.
The value of the Company–s reserves discounted at 10 percent for proved is $35.24 per boe and $34.25 per boe for proved plus probable for the period reported, December 31, 2012.
Total Company Reserves Summary
The Company used annualized fourth quarter volumes based on field estimates for reserve life of 6.2 years for 1P reserves and 11.7 for 2P reserves.
The following tables summarise total company reserves and associated net present value discounted at 10% before tax at December 31, 2012 using forecast prices.
Oil and Gas Equivalents
Production information is commonly reported in units of barrel of oil equivalent (“boe” or “Mboe” or “MMboe”) or in units of natural gas equivalent (“Mcfe” or “MMcfe” or “Bcfe”). However, boe(s) or Mcfe(s) may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf = 1 barrel, or a Mcfe conversion ratio of 1 barrel = 6 Mcf, is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Reserves Classifications
“Company gross reserves” are the Company–s working interest share before deducting royalties and without including any royalty interests of the Company.
Defined Terms
“Reserves” are those quantities of petroleum anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions. Reserves must further satisfy four criteria: they must be discovered, recoverable, commercial, and remaining (as of the evaluation date) based on the development project(s) applied.
Reserves are further categorized in accordance with the level of certainty associated with the estimates and may be sub-classified based on project maturity and/or characterized by development and production status.
“Proved Reserves” are those quantities of petroleum, which by analysis of geosciences and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods and government regulations.
“Probable Reserves” are those additional Reserves which analysis of geosciences and engineering data indicate are less likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves.
“Possible Reserves” are those additional Reserves which analysis of geosciences and engineering data indicate are less likely to be recoverable than Probable Reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible Reserves.
About Cub Energy Inc.
Cub Energy Inc. (TSX VENTURE: KUB) is an upstream oil and gas company with 110,000 net acres in nine exploration and production licences within the two major producing basins of Ukraine. The Company–s strategy is to implement western technology and capital, combined with local expertise and ownership, to increase value in its undeveloped land base, creating and further building a portfolio of producing oil and gas assets within a high pricing environment.
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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: general economic conditions in 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 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
Cub Energy Inc.
Mikhail Afendikov
Chairman and Chief Executive Officer
(713) 677-0439