Cub Energy earns $599,000 (U.S.) in Q3
2022-10-25 16:10 ET - News Release
Mr. Patrick McGrath reports
CUB ENERGY ANNOUNCES THIRD QUARTER 2022 RESULTS
Cub Energy Inc. has released its unaudited financial and operating results for the nine months ended Sept. 30, 2022. All dollar amounts are expressed in U.S. dollars unless otherwise noted.
Patrick McGrath, CEO of Cub said: "Cub finished the quarter ended September 30, 2022 with $7,211,000 cash on hand, working capital of $7,194,000 and no debt. The Company is currently evaluating the alternatives for its working capital, including a possible return of capital to shareholders or investing in new opportunities."
Operational Highlights
- On February 2, 2022, the Company closed the sale of its 35% interest in KUB Holdings Limited ("KUB Holdings") and received a cash payment of $2,600,000. In conjunction with closing, the Company received the final cash dividend of $2,046,000 and repaid the final loan balance to a subsidiary of KUB Holdings in the amount of $2,481,000 as part of the final debt settlement between the parties.
- On July 29, 2022, the Company signed a definitive Share Sale and Purchase Agreement ("SPA") for the sale of its 100% interest in 3P International Energy Ltd ("3P") and its wholly-owned Ukraine subsidiary, Tysagaz LLC ("Tysagaz"). Tysagaz owns the RK field in western Ukraine. The sale was for nominal consideration of $1 and the buyer assumed all of 3P's and Tysagaz' liabilities including the bank loan and all reclamation liabilities. The buyer group was two officers of the Company, Eugene Chaban, the Company's Chief Financial Officer and Sergey Panchuk, the Company's former Chief Operating Officer. The sale closed on August 17, 2022.
- Achieved average natural gas price of $25.49/Mcf during the nine months ended September 30, 2022 as compared to $7.80/Mcf for the comparative 2021 period. Regional pricing materially improved in Ukraine period over period although the 2022 Ukraine gas price was subject to a material discount to European pricing.
- Production averaged 20 boe/d for the nine months ended September 30, 2022 as compared to 513 boe/d for the comparative 2021 period. Production decreased due to the sale of the Company's 35% equity investment in KUB Holdings.
- The TSX Venture Exchange has provided a notice to the Company that its listing has been transferred from Tier 1 to Tier 2 status and the Company will be moved to the NEX if it does not meet continued listing requirements by November 30, 2022.
Financial Highlights
- The Company reported a net loss of $155,000 or $0.00 per share during the nine months ended September 30, 2022 as compared to net income of $2,138,000 or $0.01 per share during the comparative 2021 nine months. The Company's revenues and income were materially impacted in 2022 by the sale of KUB Holdings which was the primary contributor to the financial performance of the Company historically.
- Netbacks of $49.38/boe or $8.23/Mcfe were achieved for the nine months ended September 30, 2022 as compared to netback of $22.90/Boe or $3.82/Mcfe for the comparative 2021 period.