JonnyRBuck12
4 years ago
So as we expected, Q1 was not going to be good. Reason being that around $500,000 USD was spent on the M30 well and that was factored into this quarter. At the same time, KUB has $6.1 million USD in cash(minus $1.7 mil with RK field equipment purchase as of recent), and then the company presentation below shows work happening on all 5 leases this year. On top of that, cost cutting measures were implemented(see below) where 11 team members were layed off, not sure if that includes the $60k a year director, along with other savings. So I feel that the cost reductions will help a lot.
New company presentation: http://www.cubenergyinc.com/_resources/corporate-presentation.pdf?v=4.2
2020-05-21 14:49 MT - News Release
Mr. Mikhail Afendikov reports
CUB ENERGY ANNOUNCES FIRST QUARTER OF 2020 RESULTS
Cub Energy Inc. has released its unaudited financial and operating results for the interim three months ended March 31, 2020. 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.
Mikhail Afendikov, Chairman and CEO of Cub said: "In April 2020, we made a capital commitment to purchase two Jenbacher power generation units in order to better utilize the Company's RK field in western Ukraine to generate potential cashflow for the Company."
Operational Highlights
Achieved average natural gas price of $3.45/Mcf and condensate price of $36.25/bbl during the three months March 31, 2020 as compared to $7.11/Mcf and $42.57/bbl for 2019. The decrease is due, in large part, to increased volumes of gas stored in Europe and a warmer than expected winter in Europe.
Production averaged 646 boe/d (97% weighted to natural gas and the remaining to condensate) for the three months March 31, 2020 as compared to 895 boe/d for 2019.
In April 2020, the Company has signed a contract for the purchase of two Jenbacher gas power generation engines that should convert the natural gas produced from the RK field into power that can be sold in western Ukraine at local market rates. Each power generation unit will have the capacity to produce as much as 1.5 megawatts ("MW") of power each or 3 MW in total. The RK field was materially suspended on April 1, 2016 and this new plan should result in the restart of the RK field.
Financial Highlights
The Company reported a net loss of $706,000 or $0.00 per share during the three months March 31, 2020 as compared to net income of $962,000 or $0.00 per share during 2019.
Netbacks of $5.40/boe or $0.90/Mcfe were achieved for the three months March 31, 2020 as compared to netback of $24.49/Boe or $4.08/Mcfe for 2019.
The Company has implemented certain cost-cutting initiatives during the second quarter of 2020, including the layoff of eleven team members, salary and director fee reductions, the signing of office leases at lower rent levels and a general decrease in the use of external consultants.
Reader Advisory
With the current cash resources, negative working capital, suspension of the RK field, uncertainty surrounding the successful installation of the Jenbacher power generation units, fluctuating commodity prices, dividend uncertainty, currency fluctuations, reliance on a limited number of customers, and impact on carrying values, the Company may not have sufficient cash to continue the exploration and development activities. These matters raise significant doubt about the ability of the Company to continue as a going concern and meet its obligations as they become due.
Three Months Ended Three Months Ended
(in thousands of US Dollars) March 31, 2020 March 31, 2019
Petroleum and natural gas revenue 66 49
Pro-rata petroleum and natural gas revenue(1) 1,262 3,452
Revenue from gas trading(2) 2,204 4,479
Net income (loss) (706) 962
Income (loss) per share - basic and diluted (0.00) 0.00
Funds generated from (used in) operations 350 (35)
Capital expenditures(3) - -
Pro-rata capital expenditures(3) 851 56
Pro-rata netback ($/boe) 5.40 24.49
Pro-rata netback ($Mcfe) 0.90 4.08
March 31, 2020 December 31, 2019
Cash and cash equivalents 6,100 6,206
Notes:
Pro-rata petroleum and natural gas revenue is a non-IFRS measure that adds the Company's petroleum and natural gas revenue earned in the respective periods to the Company's 35% equity share of the KUB-Gas natural gas sales that the Company has an economic interest in.
During the three and twelve months ended March 31, 2020, the Company recorded $2,204,000 (2019 - $4,479,000) and $2,070,000 (2019 - $4,240,000) in revenue for gas trading and $134,000 (2019 - $239,000).
Capital expenditures include the purchase of property, plant and equipment and the purchase of exploration and evaluation assets. Pro-rata capital expenditures are a non-IFRS measure that adds the Company's capital expenditures in the respective periods to the Company's 35% equity share of the KUB-Gas and 50% equity share of CNG Holdings capital expenditures that the Company has an economic interest in.
Supporting Documents
Cub's complete quarterly reporting package, including the unaudited interim financial statements and associated Management's Discussion and Analysis, have been filed on SEDAR (www.sedar.com) and has been posted on the Company's website at www.cubenergyinc.com.
About Cub Energy Inc.
Cub Energy Inc. (TSX-V: KUB) is an upstream oil and gas company, with a proven track record of exploration and production cost efficiency in 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.
We seek Safe Harbor.
© 2020 Canjex Publishing Ltd. All rights reserved.
JonnyRBuck12
4 years ago
Article : Cub Energy JV Partner Moves Forward In Ukraine
Nafta has obtained a mining license in Ukraine
The Ukrainian government decided on Wednesday.
https://ekonomika.sme.sk/c/22395869/spolocnost-nafta-ziskala-licenciu-na-tazbu-na-ukrajine.html
May 1, 2020 at 11:26 AM SITA
BRATISLAVA. The company Nafta, which operates gas storage facilities in Slovakia and is engaged in the exploration and extraction of hydrocarbons, is consolidating its position in Ukraine.
EP Ukraine, in which Nafta has a 10% share and Energetický a prumyslový holding (EPH) has a 90% share, has obtained a license to explore and extract mainly natural gas in the Ukrainian projects Grunivska and Ochtyrska.
The Ukrainian government decided on Wednesday.
Two mining sites
As EPH further informed through the portal of the Slovak Gas and Oil Association slovgas.sk, its subsidiary EP Ukraine was selected on the basis of evaluation criteria developed by experts, international consulting companies and energy organizations.
"We welcome the opportunity to use our financial and technological advantages in the dynamic development of the Ukrainian energy sector," said EP Ukraine in response.
EP Ukraine will now launch an extensive investment program, including in the first phase the implementation of seismic measurements and the drilling of a significant number of exploratory wells. For the supply of services and materials will use local Ukrainian companies and experts.
The Grunivska project is located in the Sumy and Poltava self-governing areas and covers an area of ??almost 1,100 square kilometers.
The Ochtyrska project with a total area of ??670 square kilometers extends on the border of the Sumy, Poltava and Kharkiv self-governing regions.
Diesel will be involved in the development of mining
Nafta, as a Central European leader in the production and storage of oil and natural gas with more than 105 years of experience, is ready to ensure the active development of individual licenses for the exploration and production of hydrocarbons, especially natural gas, in the Ukrainian project.
Last year, through its subsidiary Nafta RV LLC, it participated in the tender for Vantazhkivsk's license.
With its bid in the auction, it succeeded and obtained the right to a Vantazhkivske license near the town of Poltava.
Diesel also started last year with Cub Energy Inc. to implement the first of three planned exploratory wells near Uzhhorod.
The Slovak company Nafta, through its subsidiary Nafta International BV, entered the Ukrainian market about four years ago after obtaining 50 percent in the Uzhhorod license.
Since then, the partners have been working on a joint project aimed at exploring the Uzhhorod license in western Ukraine.
The Uzhhorod license is a geological continuation of highly explored areas in eastern Slovakia and copies the trend of discovered deposits in Slovakia.
As the main shareholder of EP Ukraine, EPH is active in the Czech Republic, Slovakia, Germany, France, the United Kingdom, Ireland , Italy , Poland and Hungary. The holding covers the entire spectrum of energy production and distribution.
JonnyRBuck12
5 years ago
NAFTA confirms its interest in the project in eastern Ukraine
Note: As Ukraine heals from years of battling with rebels (recent peace efforts in December), more companies will continue to invest in Ukraine's lucrative oil and gas assets. Over a million acres have been purchased over the last several months between Vermilion Energy, NAFTA and other large cap companies. This bodes well for Cub Energy Inc as the company holds 140,000 acres of mostly producing assets with many drill targets. Below it also mentions the "Uzhgorod license with a partner" this is Cub Energy. NAFTA still has 2 wells to drill at no cost to Cub, along with a dozen other possible targets after that. Add in the NRU project(completed by end of 2020) and the Eastern wells (M30 to start shortly) and we have a wonderful evolving story. Company is well funded and has great cash flow. The sell off in the fall was just a large shareholder from years ago that wanted out, but does not justify the true value of the company at present time.
https://www.nafta.sk/sk/nafta-potvrdzuje-svoje-zaujem-o-projekt-na-vychode-ukrajiny
Bratislava / Prague, 9 December 2019 - NAFTA as, together with the EPH energy group, are continuing their joint efforts to acquire the Yuzivska project in eastern Ukraine.
NAFTA as (NAFTA) and EPPE Power Europe (EPPE) are prepared to jointly develop the Yuzivska project under conditions approved by the Government of Ukraine. Both companies belong to the energy group Energy Industrial Holding (EPH), and were approved by the Interministerial Commission at the Ukrainian Ministry of Energy as investors who meet the technical and financial conditions for the development of the Yuzivska project.
NAFTA will act as a technical operator in the project. The company has been operating in the field of hydrocarbon exploration and extraction for more than 105 years and intends to use the unique know-how it has gained from many projects in the project for many years in its core areas. In addition, NAFTA has been actively operating in Ukraine since 2016, where they are developing a Uzhgorod license with a partner.
“The EPH Group declares a continuing interest in the Yuzivska project and is ready to assume the relevant investment obligations under the approved Production Sharing Agreement (PSA). Our subsidiary EP Yuzivska is ready to sign a PSA approved by the Ukrainian government and EPH is ready to issue a guarantee to the parent company to secure the financial resources needed for the implementation and rapid development of the Yuzivska project immediately after its approval. Since we have a detailed mapping of the project, we can guarantee the timely extraction of hydrocarbons for the Ukrainian market, ” said a source from the EPH Group.
“Yuzivska is a greenfield project associated with a high geological risk and requires extensive research work. We believe that by implementing our know-how, experience and methods, we will be able to uncover the full potential of the license. As part of this project, we are ready to allocate our capacities to Ukraine in order to fully develop this project and ensure increased energy independence of Ukraine, ” said the CEO of NAFTA as
NAFTA as is an international company with extensive experience in the field of storage and construction of underground gas storage facilities in Slovakia and also a Slovak leader in the exploration and extraction of hydrocarbons. The company is active in Central European countries and is present in the Czech Republic, Germany, Austria and Ukraine. NAFTA operates underground storage facilities in several countries, conducts exploration activities and participates in renewable energy storage projects. With a total storage capacity of approximately 60 TWh, it is the 6th largest gas storage operator in Europe.
JonnyRBuck12
5 years ago
Ukraine and pro-Russians expected to swap prisoners
https://www.aljazeera.com/news/2019/12/ukraine-pro-russians-expected-swap-prisoners-191228154200501.html
Ukraine president says exchange should take place on Sunday but details of the planned swap are scarce.
7 hours ago
Ukrainian authorities and pro-Russian separatists in the war-torn east of the country are expected to swap dozens of prisoners in a front-line operation on Sunday.
Both sides had said earlier this month they would carry out a prisoner exchange by the end of the year, following high-profile peace talks in Paris aimed at de-escalating Europe's only active war.
"The exchange should be tomorrow. We're all waiting for it," Ukrainian President Volodymyr Zelenskyy said on Saturday, calling it "the most difficult task this year".
Earlier, a spokeswoman for the self-declared rebel republic of Donetsk, Daria Morozova, announced that there was an agreement for the swap.
She said two separatist territories Donetsk and Lugansk will get 87 prisoners, while 55 others will be handed over to Kyiv, without giving details on the identity of those involved.
The prisoner exchange is expected to take place near the town of Gorlivka in the separatist-held Donetsk region in eastern Ukraine's industrial heartland.
Russian media reported that the operation will take place on the front line.
The swap would come three months after Ukraine carried out a long-awaited exchange with Russia of 35 prisoners each.
More than 13,000 people have been killed since pro-Russia fighters in eastern Ukraine launched a bid for independence in 2014, sparking the conflict.
Details of Sunday's exchange were scarce, with officials saying that lists of prisoners were still being agreed.
The Organization for Security and Co-operation in Europe (OSCE) Special Representative, Martin Sajdik, confirmed that preparations for the swap were under way.
Peace talks
At the Paris summit this month, the leaders of France, Germany, Russia and Ukraine agreed to implement a full ceasefire and proceed with a new withdrawal of forces from conflict zones by March 2020.
Russian President Vladimir Putin and his Ukrainian counterpart Zelenskyy also held their first face-to-face talks and agreed on measures to de-escalate the conflict.
The December 9 summit was the first of its kind in three years.
Since coming to power in May, comedian-turned-President Zelenskyy, 41, has sought to revive a peace process to end the separatist conflict.
READ MORE
Putin, Zelenskyy agree to Russia-Ukraine prisoner swap at summit
The Kremlin has sent signals that it is ready to work with Zelenskyy, whom Putin has described as "likeable" and "sincere".
Before the summit, Kyiv and separatists completed a partial troop pullback.
French President Emmanuel Macron said at the time of the Paris meeting a new summit would be held in four months to take stock of progress on ending the conflict.
Countries have sought to revive accords signed in Minsk in 2015 that call for the withdrawal of heavy weapons, the restoration of Kyiv's control over its borders, wider autonomy for Donetsk and Lugansk, and the holding of local elections.
However, there was no sign of warmth between the leaders of Ukraine and Russia in Paris and many doubt whether Putin genuinely wants to settle the conflict.
Speaking in Moscow this month, Putin said if Kyiv gets back control of the border in the east, pro-Russian residents of separatist-held territories could be targeted.
Zelenskyy's peace plan has also been strongly criticised by war veterans and nationalists.
Various nationalist organisations even deployed their own troops to the front line in an effort to prevent a troop pullback in line with peace agreements.
JonnyRBuck12
5 years ago
Cub Energy Inc. Financial Results For Nine Months (In US Dollars. Multiple By 1.33 For CAD Value)
All information below is available on Sedar
ASSETS
Cash: $7,515,000
Prepaid Expenses: $978,000
Receivables: $257,000
Equity Investment: $9,912,000
Property & Equipment: $4,923,000
Non-Current Receivables: $842,000
Total Assets: $24,427,000 (June Asset Value: $23 million, increase of $1.4 million in assets)
Liabilities
Payables: $4,022,000
Loan from KUB-Gas: $5,917,000
Shareholder Loan: $2,000,000 - From CEO who owns majority of CUB shares
Provisions: $588,000
Total Liabilties: $12,527,000 (June Liabilities: $12.444 million)
MD&A Highlights:
• The Company reported income from equity investment of $2,350,000 during the nine months ended
September 30, 2019 as compared to income of $4,953,000 in the comparative 2018 period.
• The Company reported net income of $260,000 or $0.00 per share during the nine months September
30, 2019 as compared to net income of $2,508,000 or $0.01 per share during the same period in 2018.
• The Company recorded $2,790,000 in dividends during the nine months September 30, 2019
compared with $3,847,000 in dividends in the comparative 2018 period.
• Production averaged 824 boe/d (97% weighted to natural gas and the remaining to condensate) for
the nine months September 30, 2019 as compared to 826 boe/d for the 2018 comparative period.
• Netbacks of $18.49/boe or $3.08/Mcfe were achieved for the nine months September 30, 2019 as
compared to netback of $27.22/Boe or $4.54/Mcfe for the comparative 2018 period.
• Achieved average natural gas price of $5.85/Mcf and condensate price of $48.43/bbl during the nine
months September 30, 2019 as compared to $7.47/Mcf and $59.80/bbl for the same period in 2018.
• CNG drilled the U101 well that showed that the prospective reservoir sands were water saturated with
traces of natural gas that indicate there was gas migration, but no viable trapping mechanism in this
particular prospect. The U101 well obtained valuable subsurface geological and petrophysical data
that will be used to refine the seismic mapping and geo-modelling prior to drilling additional wells on
the license. This upcoming study may result in revising the drilling priorities for the identified prospect
inventory.
• Kub-Gas expects to drill a new well called Makeevskoye-30 (“M-30”). The Makeevskoye licence has
produced nearly half of the historical production for Kub-Gas. The M-30 well is expected to spud in Q1
2020.
• During the quarter ended September 30, 2019, Kub-Gas performed a recompletion of the Olgovskoye18 (“O-18”) well in the B-8-9 reservoir which resulted in a 30% increase in production and the well is
now producing at a combined rate of approximately 0.9 million cubic feet per day (“MMcf/d”). KubGas uses its own completion equipment and personnel.
• The Company has determined that the Nitrogen Rejection Unit (“NRU”) requires process
improvements before it can be deployed to Ukraine. The Company is currently negotiating with
engineering firms to complete the required modifications.
Eastern Ukraine KUB-Gas Assets (35%)
Kub-Gas expects to drill the M-30 well in Q1 2020. The Makeevskoye licence has produced nearly half of the
historical production for Kub-Gas. The M-30 well will target the M-7 horizon.
Kub-Gas recompleted the Olgovskoye-7 (“O-7”) well to the M6v which increased its production to 0.6 MMcf/d.
The M6v is a relatively small gas reservoir and the current rate is approximately 0.3 MMcf/d. Kub-Gas also
recently recompleted two other wells for a combined additional increase of approximately 0.35 MMcf/d in
field production. During the quarter ended September 30, 2019, Kub-Gas performed a recompletion of the O18 well in the B-8-9 reservoir which resulted in a 30% increase in production and the well is now producing at
a combined rate of approximately 0.9 MMcf/d. Kub-Gas uses its own completion equipment and personnel, so
the costs are associated with materials and outside services as needed for particular activities. There are
approximately ten other wells with “behind pipe pays” that may be attractive recompletion opportunities in
the Olgovskoye License. As the currently producing intervals deplete, the production team can recomplete
these additional zones in the existing wells.
On the West Olgovskoye licence, Kub-Gas expects to commence a 270 km2 3D seismic program in 2020 to
delineate known structures found from 2D seismic.
Western Ukraine CNG Assets (50% Interest)
In western Ukraine, CNG drilled the U101 well that showed that the prospective reservoir sands were water
saturated with traces of natural gas that indicate there was gas migration, but no viable trapping mechanism
in this particular prospect. The U101 well obtained valuable subsurface geological and petrophysical data that
will be used to refine the seismic mapping and geo-modelling prior to drilling additional wells on the license.
This upcoming study may result in revising the drilling priorities for the identified prospect inventory. The costs
of drilling the first three wells will be incurred 100% by our partner.
Western Ukraine Tysagaz Assets (100% Interest)
The RK field was temporarily suspended on April 1, 2016 because the nitrogen concentration exceeded the
allowable limit stipulated by the gas pipeline operator. The Company is currently selling a modest amount of
rich gas from a deep well to evaluate the Mesozoic formation on the RK field.
During the nine months ended September 30, 2019, and due to continued delays in the completion of the NRU,
the Company and the NRU manufacturer entered into a mutual release agreement, including the release of
the arbitration claim, in exchange for the Company taking physical possession of the NRU “as is”. The Company
has determined that the NRU requires process improvements before it can be deployed to Ukraine. The
Company is currently negotiating with engineering firms to complete the required modifications
Foreign Currency Translation Income/Loss
During the third quarter ended September 30, 2019, the foreign currency translation income was $1,832,000
as compared to a loss of $1,721,000 in the comparative 2018 quarter. The foreign currency translation income
was $3,011,000 during the nine months ended September 30, 2018 as compared to a loss of $376,000 in the
comparative 2018 period. The income and losses relate to the revaluation of the Company’s foreign assets and
liabilities from the local currency (Ukrainian, Canadian and European currencies) to the US dollar in accordance
with the Company’s accounting policy for the translation of its subsidiaries. The recent foreign currency
translation income was primarily the result in the strengthening of the Ukrainian Hryvnya against the US dollar.
The carrying value of the assets of the Ukrainian subsidiaries were materially impacted by the volatility of the
local currencies in the past. The appreciation/devaluation materially raises/lowers the carrying value of the
Ukrainian property, plant and equipment and the value of the equity investment in KUB Holdings. These
gains/losses do not impair the ability of those assets or liabilities to perform their intended purpose.
Liquidity, Capital Resources and Financings
At September 30, 2019, the Company had a cash balance of $7,515,000 (December 31, 2018 - $7,236,000) and
working capital deficit of $1,189,000 (December 31, 2018 – working capital of $3,798,000). The working capital
was largely impacted by the Kub Gas loans being classified as current liabilities as a result of callable feature
allowing the loans to be called any time before the maturity date of December 31, 2020. The Kub Gas loans
amount to $5,917,000. The Company had no long-term debt or capital leases other than the Pelicourt loan.
The Company has historically been able to raise funds through the issuance of common shares or debt although
there are no assurances funds will be able in the future.
The Company has a $2,000,000 secured shareholder loan with Pelicourt, a related party to the Company. The
shareholders loan bears interest at 12% per annum payable quarterly and the principal of the shareholder loan
is due on January 31, 2021. Pelicourt was granted security over Gastek which indirectly owns the 35% interest
in KUB-Gas. The security is available on an event of default and limited only to the amount owing on the
shareholder loan including principal and interest.
In June 2017, the Company entered into a second shareholder loan agreement with an officer of the Company.
The shareholder loan is for $1,000,000 with an annual interest rate of 6% payable monthly. The shareholders
loan was repaid in four equal quarterly installments and repaid in full on June 30, 2019.
During the nine months ended September 30, 2019, the Company received $2,790,000 in dividends from KUB
Holdings as compared to $3,847,000 in dividends in the 2018 comparative period.
During the nine months ended September 30, 2019, the Company expended $9,000 on capital expenditures as
compared to $219,000 in the 2018 comparative period, which was largely related to the NRU.
During the nine months ended September 30, 2019, KUB-Gas incurred approximately $1,226,000 (2018 -
$3,444,000) of capital expenditures on property, plant and equipment which was the workovers in 2019 and
primarily the NY-3 well in 2018. CNG expended approximately $1,670,000 for drilling the U101 well during the
nine months ended September 30, 2019 as compared to $71,000 in the 2018 comparative period. The CNG
capital expenditures are largely paid by the company’s 50% equity partner.
There remains significant doubt about the ability of the Company to continue as a going concern and meet its
obligations as they become due.
Outlook
In eastern Ukraine, Kub-Gas is focused on drilling the Makeevskoye-30 (“M-30”) well in Q1 2020 and evaluating
additional recompletion operations given the success of recompletions in 2018 and 2019. Kub-Gas expects to
commence a 3D seismic program in 2020 on the West Olgovskoye licence to delineate known structures found
from 2D seismic.
In western Ukraine, CNG is utilizing the valuable subsurface data from the U101 well and refining its model to
determine the next drilling priorities. The costs of drilling the first three wells will be incurred 100% by our
partner.
JonnyRBuck12
5 years ago
Ukraine conflict: Front-line troops begin pullout
https://www.bbc.com/news/world-europe-50221995
Ukrainian government troops and Russian-backed separatists have begun withdrawing from a key front-line area in eastern Ukraine.
"The separation of forces in Zolote is happening right now," Ukrainian Foreign Minister Vadym Prystaiko said.
A separatist official quoted by Russia's RIA news agency said both sides had fired coloured signalling rockets to mark both sides' withdrawal.
A deal was agreed this month to end the Donbas region's five-year conflict.
Under the deal, both sides were to start withdrawing from their positions in the towns of Zolote and Petrivske on 9 October.
But there were skirmishes between Ukrainian police and war veterans, who tried to prevent the troop pullout.
Will a deal with Russia bring peace to Ukraine?
On 26 October Ukrainian President Volodymyr Zelensky visited the scene and ordered the war veterans to disarm.
Mr Prystaiko said shooting in Zolote stopped on 17 October and the withdrawal began on Tuesday once OSCE international monitors were there to check compliance by both sides.
Ukraine's military high command confirmed that the withdrawal had begun at 12:00 local time (10:00 GMT).
Image copyrightGETTY IMAGES
Image caption
Military representatives from both sides arranged the withdrawal with the OSCE
How did this peace deal come about?
For at least two years the fighting has been much less intense than back in 2014.
There have been daily exchanges of fire, but the front line has remained generally static.
A framework ceasefire deal was agreed in February 2015 - the Minsk agreement - but was soon violated as fighting resumed.
This year there have been several significant moves towards a peace settlement:
President Zelensky was elected by a big majority, having set a Donbas peace deal as his number one priority
In June, Ukrainian troops and separatists withdrew a kilometre from the front-line town of Stanytsia Luhanska
In September, a long-awaited prisoner swap with Russia was finally completed
On 1 October, Ukraine, Russia and the separatists agreed a deal to bring special status to the separatist-held parts of Donetsk and Luhansk regions (jointly called the Donbas)
What could be the next steps?
Mr Prystaiko said that if the Zolote disengagement goes according to plan, both sides will also withdraw from their positions in Petrivske within the next 10 days.
He also voiced hope that, next month, President Zelensky would meet Russian President Vladimir Putin for peace talks, mediated by the leaders of France and Germany, in what is known as the Normandy format.
"Several times already it was postponed for technical reasons, but you see how complicated all this is," he told reporters on Tuesday. "We are doing all we can to make this meeting happen."
Media captionSurviving the chaos in Ukraine - and living with the memories
The new impetus stems from a plan proposed in 2016 by Germany's then-foreign minister, Frank-Walter Steinmeier, calling for: free and fair elections in the east under Ukrainian law; verification by the OSCE international security organisation; and self-governing status for Donetsk and Luhansk in return.
What triggered the conflict?
Pro-Russian separatists seized control of large swathes of Donetsk and Luhansk regions in April 2014, just after Russia's annexation of Ukraine's Crimea peninsula.
It was an insurgency against the new pro-Western authorities in the capital Kyiv, who had ousted the pro-Russian President Viktor Yanukovych in street protests dubbed the "Maidan Revolution".
The separatists later declared independence from Ukraine - but no country has recognised their "republics".
Nato and Western intelligence experts have repeatedly accused Russia of sending heavy weapons and combat troops into eastern Ukraine to help the rebels.
Russia denies that, but admits that Russian "volunteers" are helping the rebels.
JonnyRBuck12
5 years ago
A lot of investors are still ignorant to the fact that Russia will be cutting off Ukraine's natural gas in 4 months. Don't have to be an economist to understand supply/demand metrics here and that prices will sky rocket in that country, making producers like Cub Energy extremely important.
https://www.rferl.org/a/kyiv-pursues-additional-reverse-gas-flows-in-preparation-for-potential-russian-gas-transit-cutoff/30118706.html
Kyiv Pursues Additional Reverse Gas Flows In Preparation For Potential Russian Gas-Transit Cutoff
August 20, 2019 05:36 GMT
Ukraine's state-run gas-transport company, Ukrtransgaz, is preparing to open another reverse-flow point for the import of an additional 1.5 billion cubic meters (bcm) of natural gas by January 1 in anticipation of Russia halting gas transit through the country when their contract expires at the end of the year.
In an August 19 news release, pipeline operator Ukrtransgaz said the fuel will come from Romania via Ukraine's shared border with Moldova, where gas-metering stations will be upgraded on both sides to accommodate the expected volume of gas.
"For Ukraine and Moldova, this project is of strategic importance, because by diversifying the gas-supply routes, both states will increase their dependability and the uninterrupted supply of gas to their customers," Ukrtransgaz said.
The additional volume is the equivalent of 15 percent of last year's total imports.
However, the 50-kilometer stretch of the modernized gas line will cross Transdniester, Moldova's pro-Russian breakaway region. Ukrtransgaz didn't focus on the issue of Russia possibly interfering with this gas flow.
Since Ukraine's gas-transportation system is designed for output, pipelines need to be upgraded to open so-called reverse gas flows.
Ukraine already receives gas this way from Slovakia, Poland, and Hungary. Kyiv stopped importing gas from Russia in November 2015 after Moscow invaded Ukrainian territory and annexed its Crimean Peninsula the previous year.
Ukrtransgaz said it was currently in talks with its Romanian counterpart, SNTGN Tansgaz, as well as other countries to receive the gas from the Trans-Balkan pipeline.
In 2018, Ukraine imported 10.6 billion cubic meters of gas, or one-third of what the country consumed.
Fears that Russia's Gazprom will completely stop gas transit through Ukraine next year, when Moscow's Nord Stream 2 pipeline network goes online, are forcing Ukraine to store higher volumes of gas in underground storage facilities ahead of winter.
Ukrtransgaz operates 12 gas-storage facilities that have a total capacity of 31 bcm.
The company has completed upgrading five gas compressor stations that will allow them to pump gas from reservoirs in western Ukraine to eastern and southern Ukraine.
The pipeline operator is owned by state-run Naftogaz Group, a vertically-integrated oil and gas company.
JonnyRBuck12
5 years ago
CUB ENERGY ANNOUNCES NET EARNINGS OF US $0.8 MILLION FOR FIRST HALF OF 2019
Cub Energy Inc. has released its unaudited interim financial and operating results for the three and six months ended June 30, 2019. All dollar amounts are express 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.
Mikhail Afendikov, Chairman and CEO of Cub said: "We are pleased to announce net income $0.8 million during the six months ended June 30, 2019, and receipt of $1.7 million in dividends, plus a further $1.1 million in dividends subsequent to the quarter end. In western Ukraine, the CNG drilling contractor has begun mobilization of the rig for the planned three-well program. All costs for the three wells will be borne 100% by our partner. In addition, in eastern Ukraine, we are pleased to announce that Kub-Gas plans to drill a new well, the M-30 well, in Q4 2019."
Operational Highlights
Achieved average natural gas price of $6.28/Mcf and condensate price of $45.88/bbl during the six months June 30, 2019 as compared to $7.34/Mcf and $65.18/bbl for the comparative 2018 period. Production averaged 873 boe/d (97% weighted to natural gas and the remaining to condensate) for the six months June 30, 2019 as compared to 819 boe/d for the 2018 comparative period. The CNG drilling contractor has commenced mobilization of its rig for the three-well program on the Uzghorod licence. The costs of drilling will be incurred 100% by our partner.Kub-Gas recompleted the Olgovskoye-7 ("O-7") well to the M6v which increased its production to 0.6 million cubic feet of gas per day ("MMcf/d"). The M6v is a relatively small gas reservoir and the current rate is approximately 0.3 MMcf/d. Kub-Gas also recently recompleted two other wells for a combined additional increase of approximately 0.35 MMcf/d in field production. Kub-Gas uses its own completion equipment and personnel.
Financial Highlights
The Company reported net income of $0.8 million or $0.00 per share during the six months June 30, 2019 as compared to net income of $1.4 million or $0.00 per share during the same period in 2018.Netbacks of $20.50/boe or $3.42/Mcfe were achieved for the six months June 30, 2019 as compared to netback of $26.45/Boe or $4.41/Mcfe for the comparative 2018 period. The Company received $1.7 million in dividends during the six months June 30, 2019 as compared to $2.4 million in dividends in the comparative 2018 period. Subsequent to the quarter ended June 30, 2019, the Company recorded an additional $1.1 million in dividends from KUBGAS Holdings.
Three Three Six Six
Months Ended Months Ended Months Ended Months Ended
June 30, 2019 June 30, 2018 June 30, 2019June 30, 2018
(in thousands of US Dollars)
Petroleum and natural gas revenue 77 18 126 18
Pro-rata petroleum and natural gas revenue(1) 2,485 3,354 5,937 6,781
Revenue from gas trading(2) 2,975 3,079 7,454 8,749
Net income (loss) (205) 596 757 1,375
Income (loss) per share - basic and diluted (0.00) 0.00 0.00 0.00
Funds generated from operations(3) 678 596 643 993
Capital expenditures(4) 9 77 9 211
Pro-rata capital expenditures(4) 302 526 358 861
Pro-rata netback ($/boe) 16.19 26.98 20.5 26.45
Pro-rata netback ($Mcfe) 2.70 4.50 3.42 4.41
June 30,2019December 31, 2018
Cash and cash equivalents 7,429 7,236
Notes:Pro-rata petroleum and natural gas revenue is a non-IFRS measure that adds the Company's petroleum and natural gas revenue earned in the respective periods to the Company's 35% equity share of the KUB-Gas natural gas sales that the Company has an economic interest in.During the three and six months ended June 30, 2019, the Company recorded $2,975,000 (2018 - $3,079,000) and $7,454,000 (2018 - $8,749,000) in revenue for gas trading and $2,616,000 (2018 - $2,877,000) and $6,856,000 (2018 - $8,393,000) for the cost of the sales for a net profit from gas trading of $359,000 (2018 - $202,000) and $598,000 (2018 - $356,000), respectively.Funds from operations is a non-IFRS measure and is defined as cash flow from operating activities, excluding changes in non-cash working capital.Capital expenditures includes the purchase of property, plant and equipment and the purchase of exploration and evaluation assets. Pro-rata capital expenditures are a non-IFRS measure that adds the Company's capital expenditures in the respective periods to the Company's 35% equity share of the KUB-Gas and 50% equity share of CNG Holdings capital expenditures that the Company has an economic interest in.
Management Change
Effective September 1, 2019, subject to regulatory approval, the Company has appointed Sergey Panchuk as Chief Operating Officer, replacing Kerry Kendrick. Mr. Kendrick will remain with the Company as a senior advisor. Mr. Panchuk is a mechanical engineer and previously served as the Chief Executive Officer of Kub-Gas from 2006 to 2017. During Mr. Panchuk's tenure at Kub-Gas, the company grew to be the third largest private oil and gas producer in Ukraine. Since 2017, Mr. Panchuk, a resident of Ukraine, has been overseeing the Company's working interests in Ukraine.
Supporting Documents
Cub's complete quarterly reporting package, including the unaudited interim financial statements and associated Management's Discussion and Analysis, have been filed on SEDAR (www.sedar.com) and has been posted on the Company's website at www.cubenergyinc.com. About Cub Energy Inc.
Cub Energy Inc. (TSX-V: KUB) is an upstream oil and gas company, with a proven track record of exploration and production cost efficiency in 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.
We seek Safe Harbor.
© 2019 Canjex Publishing Ltd. All rights reserved.
JonnyRBuck12
5 years ago
Club members only: Would foreign companies be allowed to extract Ukraine's gas?
https://112.international/article/club-members-only-would-foreign-companies-be-allowed-to-extract-ukraines-gas-41254.html
Foreign investors are making another attempt to break into Ukraine’s gas production industry. The competition to attract investors to the development of nine oil and gas areas on the terms of production-sharing agreements involves six foreign companies. Foreigners are taking part in the competition for the shelf area: the name of the winning company to be announced no earlier than September. Ukrgazvydobyvannia state-owned enterprise and companies owned by Ukrainian oligarchs also participate in the competition.
Crony gas perspectives
Despite the declarations of the authorities, in recent years not a single major foreign investor was able to enter Ukraine. Permits for the best deposits were concentrated in the hands of the Ukrainian oligarchs and state-owned companies; about a third of them fell into the hands of the speculators. Almost 80% of gas in Ukraine is mined by the state-owned Ukrgazvydobyvannia and the semi-state-owned Ukrnafta (oligarch Igor Kolomoysky maintains control over the company). Private companies have no more than 20% of production – DTEK strategic holding company of oligarch Rinat Akhmetov, companies controlled by Igor Kolomoysky, Regal Petroleum, part of Smart Holding of MP Vadym Novinsky, Geo Alliance of oligarch Viktor Pinchuk, Burisma company of Mykola Zlochevsky.
Related: Poland is ready to connect its gas pipeline to Ukrainian gas transporting system
Another part of special permits is concentrated in the hands of second-hand dealers, who are waiting for the best time to resell the companies. At the same time, these blocks do not operate. According to the State Service of Geology and Mineral Resources of Ukraine, there is about a third of “frozen” special permits.
After world giants Shell and Chevron left Ukraine in 2014-2015, foreign companies in the field of gas production were represented rather modestly. Cub Energy operates in Ukraine, the largest shareholder of which is Mikhail Afendikov, a native of eastern Ukraine, which has become a US citizen. The company implements, in particular, a joint (50 to 50%) project with the Slovak Nafta on the Uzhgorod gas area (301.4 sq. km). Gas production within the framework of this project is not in progress yet: a 3D seismic survey was carried out on the area, which made it possible to estimate possible reserves, three exploration wells were planned to be drilled.
Since 2015, Nafta has been trying to become a party to the production sharing agreement for Yuzivska Square (Kharkiv and Donetsk regions), from which the American Shell emerged. According to the Nadra Ukraine national company, Yuzivska PSA Block is promising for the search for reserves of natural gas, shale gas, the gas of central basin type, methane, oil, condensate, and also coal deposits. Potential reserves of the area are estimated at 148 billion cubic meters of natural gas, 3200 billion cubic meters of shale gas/gas of the central-basin type. The area can give an estimated annual production of more than 10 billion cubic meters.
Related: Russia ready to keep gas transit across Ukraine
In mid-December, Ukraine’s Cabinet approved the transfer of 90% of the rights and obligations of Nadra Yuzivska to the production sharing agreement for Yuzivska PSA Block in favor of Yuzgaz B.V, belongs to entrepreneurs Yaroslav Kinakh and Timothy M. Elliott. Liubomyr Kopchyk, the director of Nafta representative office in Ukraine, voiced the intention to buy out 100% of Yuzgaz B.V from entrepreneurs, which would allow Nafta to enter the project and begin to study and develop Yuzivska PSA Block. The deal has not been completed yet. There are no necessary decisions of the Antimonopoly Committee and the Kharkiv Regional Council. Also, the environmental impact assessment is still not done. According to the World Bank, not only in the hydrocarbon industry but in general in the economy of Ukraine in 2018, foreign investment is only 2% of GDP, which is very small.
Why are foreigners interested in Ukraine’s subsoil?
The interest of foreign companies in the Ukrainian subsoil became obvious after two large-scale projects to attract investors to develop 9 areas on land and one on the Black Sea shelf. The total area of the plots exceeds 20 thousand square meters. The results of the competition on the shelf will be announced no earlier than September. After the major foreign players left in 2015, new ones did not come due to the lack of an attractive investment climate, said Roman Opimakh, Executive Director of the Association of Gas Production Companies of Ukraine.
"For many years, Ukraine had a monopoly of state-owned companies on oil and gas production, and there were practically no auctions for oil and gas subsoil. Moreover, hydrocarbon rent was extremely high. There was no access to the subsoil, regulatory environment, and regulatory systems were unstable, access to land was problematic, local authorities conducted situational blocking of work - these factors have created an unfavorable investment climate," the press service of one of Ukraine’s largest gas producing companies D Fuel and Naftogaz Energy Complex (they participate in a competition to conclude a PSA on Sofiivska and Zinkivska PSA blocks).
Related: Ukrtransgaz claims low tariffs on gas transporting cause lack of funds
The current competition for 9 gas areas is the first serious competition and an attempt to attract an investor, said Vadym Bodayev, the head of the American Sigma Bleyzer Foundation in Ukraine (together with Aspect Energy applied for a PSA competition on Varvynska Block).
In recent years, Ukrainian authorities have done a lot of work to change the regulatory and investment environment in the field of gas production, Yulia Borzhemsk, manager of regulatory policy at DTEK Naftogaz, noted. “They have elaborated the special stabilization clause regarding the fixation of stimulating rents for the period from January 1, 2018, to January 1, 2023,” she stated.
What foreign companies claim to manage Ukrainian subsoil?
Vermilion Energy, the Canadian company, claims for four out of nine development projects on land on a PSA basis. The stock is listed on New York and Toronto stock exchanges. According to Opimakh, the company's main business is concentrated in North America: the region accounts for 62% of Vermilion’s total production. The company operates in 10 more countries: seven of them are located in Europe: France, Germany, the Netherlands, Ireland, Croatia, Hungary, Slovakia. Presented by Vermilion and in Australia. Its market capitalization is $ 5.5 billion. Revenue in 2018 is $ 1.25 billion, profit is $ 240 million. The company has experience in the extraction of traditional and unconventional gas deposits.
Slovakian Nafta together with EPH, a vertically integrated energy-industrial holding, which owns 68% of the company (another 29% is owned by the state of Slovakia), also claims to Sofiyivska PSA Block. EPH is among the ten largest energy companies in Europe. The total installed capacity of generating facilities, including two NPPs located in Slovakia, exceeds 24.3 GW, and the annual production of electrical energy reaches 100.2 TWh.
Pretending to Varvynska Block, Sigma Bleyzer is the largest private equity fund operating in the country with assets of over $ 1 billion. Its founder, Mikhail Bleyzer, emigrated to the United States in 1978, and from the 90s began to conduct business in Ukraine. The most successful and well-known project of Blazer is the creation of Volya Kabel telecommunication company, which has become the largest provider of television and the Internet. The fund withdrew from the project in 2007, selling the company at a price peak for about $ 300 million with an initial investment of $ 12 million. In total, Sigma Bleyzer invested up to 100 million euros in telecommunications. One of the co-investors was the EBRD.
Who else wants to produce gas?
Competition to foreign companies in the PSA competition consists of the largest Ukrainian gas producers. In particular, the company DTEK Naftogaz, which specializes in deep drilling (over 5 thousand meters). Since 2013, the company has increased its gas production in Ukraine three times. DTEK Naftogaz participates in tenders for Sofiyivska and Zinkivska PSA Blocks.
Ukraine’s well-known gas producers Geo Alliance Group of Viktor Pinchuk (claims for Sofiyivska Block), Ukrnaftoburinnia of Igor Kolomoysky, Vitaliy Homutynnik, and Pavlo Fuks (claims for Rusanivska and Zinkivska PSA Blocks) also take part in the competition. Ukrnaftoburinnia also claims on the site “Dolphin,” located on the shelf. Semi-state enterprise Ukrnafta, co-owned by Kolomoysky, also takes part in the competition. Despite the difficult situation with tax debt and regulatory restrictions, the company increased production by 10.1% over 5 months of the current year, producing 481.5 million cubic meters of gas. Ukrnafta filed applications for Rusanivska and Sofiyivska PSA Blocks. Eurogas Ukraine is one of the participants, but there is no information about it, it claims for Zinkivska Block.
Related: Naftogaz comments on Gazprom statements about direct gas supplies contract from Russia
However, the biggest irritation among market participants is caused by Ukrgazdobuvannia, which, in addition to the four areas for which it claims together with Vermilion, has applied for five other areas on land. The claims of Ukrgazdobuvannia in all nine areas are not clear. This is not a private company. According to our information, at least 70 licenses that the company already has are not completely used.
Unofficially, Ukrgazdobuvannia talked about some interests in developing f the shelf. In addition, another subsidiary of Naftogaz, Chornomornaftogaz company, has extensive experience in drilling on the shelf.
Why does Ukraine need foreigners in its gas production?
In such conditions, it is difficult to predict whether foreign investors will be able to win the battle, however. However, if at least one foreign investor concludes a real PSA in Ukraine, there will be many more advantages than disadvantages.
Related: Gazprom: Ukraine will not have time to sign gas contract in 2019
In particular, this will increase the attractiveness of Ukraine in the eyes of other foreign players, who are closely watching the development of the situation. It also activates the demand for services, and in fact, even the processes that occurred in the last 5 years in the country, gave a huge boost to the service market. Over the past three years, such players as Schlumberger, Halliburton, Baker Hughes GE, Weatherford, NOV, Bentec, Crosco, Honghua, National Oilwell Varco, Tacrom, Belarusneft have entered Ukraine over the past three years, Ukrgazdobuvannia press service reported.
JonnyRBuck12
5 years ago
June 19th 2019 Interview: Majors expected back in hunt for Ukraine gas as activity picks up
https://www.spglobal.com/platts/en/market-insights/latest-news/natural-gas/061919-interview-majors-expected-back-in-hunt-for-ukraine-gas-as-activity-picks-up?
London — International energy majors will be tempted back to Ukraine to drill for gas in the future, according to the head of the country's gas industry association, on the back of a period of intense exploration activity in the eastern European nation.
Ukraine, whose gas production has been steady at some 20 Bcm/year for the past 25 years, has vast untapped potential in its onshore blocks -- both for conventional and unconventional resources -- as well as in the Black Sea.
New exploration has been hampered in the past by the lack of a transparent licensing process and concern over political instability. But Ukraine is now looking to attract international companies back to the upstream through a series of tenders and license rounds for blocks.
"The majors will come. It is just a matter of time," Roman Opimakh, the executive director of the Association of Gas Producers of Ukraine, said in an interview.
Big hitters such as Chevron and Shell came to Ukraine in the early 2010s in an attempt to develop the country's unconventional gas resources, but none remain.
Drilling resurgence
Despite that, the upstream in Ukraine is enjoying a resurgence with 84 active rigs drilling exploration, development and production wells in the country -- almost half of the 186 rigs operational in Europe -- according to Baker Hughes.
"The number of wells drilled in Ukraine has increased significantly since 2017," Opimakh said. "Many positive reforms have been introduced for the upstream industry in the past two years."
Last year more than 150 wells were spudded, mostly in eastern Ukraine where reserves are located at deeper intervals of more than 5,000 meters.
"The domestic fleet of rigs has been modernized and sophisticated rigs are coming to replaced outdated equipment," Opimakh said, adding that foreign outsourced contractors were also contributing resources.
The increased activity could help Ukraine boost its domestic gas production as the government looks to eliminate imports, which currently all come from Europe after it halted direct Russian gas purchases in November 2015. Domestic gas production has edged up in recent years, reaching 20.9 Bcm in 2018.
Opimakh expected it would take "5-6 years" for Ukraine to become self-sufficient in gas -- meaning Ukraine could produce all the gas it needs by 2024 -- assuming annual demand remained in the range of 30-32 Bcm.
In a bid to boost exploration yet further, some 36 blocks have been offered in 2019 in two tenders for 50-year production sharing agreements and three license rounds for 20-year exploration contracts.
The PSA tenders have attracted the most international interest, with bids from Canada's Vermilion Energy, US-based Aspect Energy, Slovakia's Nafta and Poland's Unimot.
The deadline for bids for the nine onshore blocks was May 28 and for the offshore Dolphin block was June 12, with results of both expected within one month of their deadlines (June 28 and July 12, respectively).
Opimakh said four companies had submitted bids for the Dolphin block, located in the shallow waters of the Black Sea.
"There is significant interest, especially taking in account ongoing political elections in Ukraine," he said.
License rounds
As well as the PSA tenders, three rounds of bidding for smaller exploration licenses have been held, hosted on an open electronic platform to ensure full transparency following accusations of wrongdoing in previous contract awards to upstream companies in the country.
A total of 26 blocks were offered, with 16 block licenses awarded. Some 10 of the blocks across the three rounds received no bids.
The big winner in the three bid rounds was Ukraine's state-owned UkrGasVydobuvannya (UGV), a subsidiary of Naftogaz Ukrayiny, with a total of 13 blocks awarded.
The other three were awarded to private Ukraine-based upstream companies: Burisma, DTEK, and Yedyna Oil & Gas.
A further six blocks were expected to be auctioned at a later date along with the 10 blocks not awarded in the first three rounds.
The 36 blocks offered so far -- including those in the PSA tenders -- cover a combined acreage of some 25,000 sq km and are all in well-developed petroleum provinces of Ukraine, Opimakh said.
"The chance of making a discovery is high," he said.
Asked what obstacles there were to even more upstream activity in Ukraine, Opimakh said the country still needed to "simplify the access to geological data" to attract more investors.
-- Stuart Elliott, stuart.elliott@spglobal.com
-- Edited by Dan Lalor, daniel.lalor@spglobal.com
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