Ukraine: Cub Makes "Strategic" Company Acquisition

Ukraine-focused American explorer Cub Energy has announced today that it has made a "strategic" acqusition with the purchase of Ukrainian explorer PrivateCo. Cub Energy will pay $25 million for the company, which will be paid to two shareholders.

The deal, announced today, will see Cub take control of three 100% working licences, located in close proximity to Cub's core producing fields. These three licences, the Krutogorovskoye, the Oskolonovskaya and East Vergunskaya licences, contain 70,000 acres of undeveloped land. This addition will increase Cub's current acreage in Ukraine from 174,000 gross acres to 244,000 gross acres and from 110,000 net acres to 180,000 acres. 

In addition to the increased acreage secured in the deal, Cub Energy says it will also gain access to estimated net 2C contingent gas resources of 9.6 billion standard cubic feet (bscf) and net best estimate prospective resources of 82.6 bscf.

The most recently drilled licence, the Krutogorovskoye licence, has already tested favourably for gas. The well, Krutogorovskoye-7, tested for natural gas in excess of 5.9 million cubic feet per day (MMCFD) with an indicated condensate yield of 33 barrels per million cubic feet.

"We are excited about the acquisition of these licences and believe they add significant quality acreage to our existing portfolio," Chairman and Chief Executive of Cub, Mikhail Afendikov, said today. "These three blocks give us a large increase in drilling prospects, excellent resource exposure and further consolidates our holdings in this key area of Ukrainian gas production."

Under the terms of the licences acquired, Cub Energy will be required to commence drilling no later than June 2015. It plans to begin seismic shooting in the final quarter of this year.