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Cub Hits TD at RK-21 Well; IDs Multiple Gas Bearing Zones

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   |    Thursday,April 24,2014

Cub Energy Inc. has reported an operational update and announces the Rusko-Komarovske-21 (RK-21) development well on the Rusko-Komarovske licence in western Ukraine has reached a total measured depth of 1,818 metres and has been cased to TMD with multiple potential gas bearing zones identified.

The RK-21 well is operated by Cub's wholly-owned subsidiary, JSC Tysagaz.

RK-21 Well

The RK-21 well spud in mid-March 2014 and is the second well for Cub to drill on the RK licence. The well encountered multiple zones which appear to be gas-bearing based upon drilling information and interpretation of wireline logs. Potential gas bearing zones were encountered in the targeted middle Miocene Dorobratovskaya and Badenian sands, locally referred to as the D-1 through D-5 and B-1 through B-5 sands. The Company has commenced completion operations and will subsequently begin testing selected zones.

Operations Update

Western Ukraine

Cub will now mobilise the Esta Well Services rig to the RK-1 previously abandoned well location to begin re-entry operations, which will attempt to complete a deeper zone in the Mesozoic sands that previously tested gas at a depth of approximately 3,800 metres. Later this year, Cub plans to drill the RK-24 and RK-23 wells, which will target the shallower D and B series of sands on this 100% owned asset.

Eastern Ukraine

On March 19, 2014, KUB-Gas LLC, a partially owned subsidiary in which Cub has a 30% effective ownership interest through its 30% shareholding of KUBGAS Limited, announced it had finished drilling the M-17 well and logs indicated pay in the S5 and S6 zones, and resource potential in the R30c and S7 sections. The well was cased, and the service rig began completion operations on April 10, 2014. KUB-Gas is in the process of completion and testing operations on all the prospective zones.

The O-11 well was spud on April 4, 2014 after the drilling rig was moved from the M-17 location. The well has a planned total depth of 3,200 metres, which targets the R30c and S6 formations. The O-11 is a development well, located approximately one kilometre southeast of the O-15 discovery well, which began producing from the S6 zone in July 2013 and produced an average of 1.0 MMcf/d during the month of March 2014. The Company expects drilling time of the O-11 well to be 70 days from spud and that both the R30c and S6 targets will require fracture stimulations as has been the case with other wells completed in those formations.

Outlook

To date the political unrest in Ukraine has had no material impact on the Company's operations. Cub continues with its planned work program for 2014 on both its eastern and western Ukraine assets.

In the month of April, Cub has realised a natural gas price of approximately $9.41/Mcf using an exchange rate effective April 23, 2014 of 11.6:1 Ukraine Hryvnia per U.S. Dollar.