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Thursday, 08/26/2021 9:01:13 AM

Thursday, August 26, 2021 9:01:13 AM

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Cub Energy Inc. Q2 2021 Financials + MD&A (All Information Can Be Found On Sedar)

Ticker Symbols: KUB.V & TPNEF.OTCQB
Price: $0.015
Common Shares: 314,215,355
Market Cap: $4.71 million CAD
Insider/Institutional Holdings: 172,466,105 or 55% of common shares
Options: 10,900,000 million
Most Recent Company Presentation: http://www.cubenergyinc.com/_resources/corporate-presentation.pdf

Financials – All Numbers Are Express In US Dollars (Ending June 30, 2021)

ASSETS
Cash & Equivalents: $5,137,000
Prepaid Expenses: $80,000
Trade & Other Receivables: $83,000
Equity Investments: $3,041,000
Property, Plant & Equipment: $1,817,000
Non-Current Receivables: $626,000
Total Assets: $10,784,000

LIABILITIES
Loan From KUB-Gas: $5,243,000
Trade & Other Payables: $3,646,000
Shareholder Loan: $938,000 – owed to prior CEO who also holds nearly half of company stock
Bank Loan(Current): $303,000
Bank Loan(Non Current): $454,000
Provisions: $342,000
Total Liabilities: $10,926,000

Quarterly Performance
Net Revenue: $2,071,000 – RK field was only producing for half of the quarter
Income From Equity Investment: $82,000
Operating Expenses + G&A: $1,670,000
Foreign Currency Loss: $35,000
Comprehensive Income: $448,000

Note: Cub Energy Inc. has now generated three quarters of back to back profits
Q4 2020 Profit: $165,000 USD
Q1 2021 Profit: $263,000 USD
Q2 2021 Profit: $483,000 USD
Total Profit Earned In 3 Quarters: $911,000 USD or $1.15 million CDN (based on current exchange rate)

MD&A Highlights For Q2 2021
• The Company reported net income of $746,000 or $0.00 per share during the six months ended June 30, 2021 as compared to a net loss of $1,900,000 or $0.01 per share during the comparative 2020 period. The Company benefited from higher natural gas prices.
• Energy generation of 2,253 MWh from the Jenbacher power generation project in Western Ukraine for the period of commencement in mid May 2021 to June 30, 2021 at an average price of $73/MWh.
• Netbacks of $19.17/boe or $3.20/Mcfe were achieved for the six months ended June 30, 2021 as compared to netback of $3.77/Boe or $0.63/Mcfe for the six month comparative period in 2020.
• Achieved average natural gas price of $6.50/Mcf and condensate price of $68.12/bbl during the six months ended June 30, 2021 as compared to $2.77/Mcf and $33.01/bbl for the comparative 2020 period. The increase in commodity prices is due, in large part, to a colder European winter, the lessening global impacts of COVID-19 and geopolitical events.
• Production averaged 532 boe/d (97% weighted to natural gas and the remaining to condensate) for the six months ended June 30, 2021 as compared to 648 boe/d for the comparative 2020 period.
• In May 2021, the Company commenced commercial production of its Jenbacher gas power generation units that are converting natural gas produced from its wholly-owned RK gas field into power that is being sold in western Ukraine at local market rates.
• On April 30, 2021, the Company announced it had entered into a share purchase agreement (“SPA”) to sell its 50% interest in CNG Holdings, which indirectly owns the Uzhgorod licence in western Ukraine. In consideration, the Company is to receive €800,000 (US $970,000) for its 50% interest in CNG Holdings. The consideration consists of €600,000 (US $728,000) in cash on closing and €200,000 (US $242,000) is a contingent payment on certain future events including a commercial discovery. The closing is subject to certain conditions including Ukraine regulatory approval and is expected to close in Q4 2021.
• The company is monitoring recommendations by the public health authorities related to COVID-19 in all its operating regions and is adjusting operational requirements as required. All of the Company's facilities remain fully operational.

Western Ukraine Tysagaz Assets (100% Interest)

The Company commenced power generation in mid-May 2021 through two Jenbacher gas power generation engines that are converting the natural gas produced from the RK field into power that is being sold in western Ukraine at local market rates. The power generation units have the capacity to produce as much as 3 megawatts (“MW”) of power utilizing the 100% owned RK gas field.

Eastern Ukraine KUB-Gas Assets (35%)

There are approximately ten recompletion opportunities with “behind pipe pays” that Kub-Gas is reviewing with one recompletion planned for the third quarter of 2021. As the currently producing intervals deplete, the production team can recomplete these additional zones in the existing wells. Kub-Gas uses its own completion equipment and personnel. Kub-Gas is also planning on drilling an exploration well in 2021 on the Olgovskoye licence (well O-114) to a depth of approximately 2,800 meters that will target multiple zones.

Western Ukraine CNG Assets (50% Interest)

On April 30, 2021, the Company announced it had entered into an agreement to sell its 50% interest in CNG Holdings, which indirectly owns the Uzhgorod licence in western Ukraine. In consideration, the Company is to receive €800,000 (US $970,000) for its 50% interest in CNG Holdings. The consideration consists of €600,000 (US $728,000) in cash on closing and €200,000 (US $242,000) is a contingent payment on certain future events including a commercial discovery. The closing is subject to certain conditions including Ukraine regulatory approval and is expected to close in Q4 2021.

Ukraine Currency

The Ukrainian exchange, the Hryvnya (“UAH”) rate versus the USD was 27.18 UAH/USD at June 30, 2021, which appreciated approximately 5% as compared to the 28.27 UAH/USD at December 31, 2020.