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Cub Energy Inc. has reported that the security situation in and around the Makeevskoye, Olgovskoye and North Makeevskoye licences in eastern Ukraine has improved, and that KUB-Gas LLC, Cub's 30% owned subsidiary which owns and operates the eastern Ukraine licences, has resumed its drilling program with the spud of the Makeevskoye-22 (M-22) well. This well will qualify for the lower royalty rate of 30.25%.
M-22 is located on the southwest side of the major fault that runs through the Makeevskoye and Olgovskoye licences and is a near offset to the M-2 well drilled in 1991, which tested 300 thousand cubic feet per day from the S5 in the Serpukhovian section and is currently producing approximately 272 Mcf/d. The primary target in M-22 is the S6 zone which has proven very prolific in the M-16, M-17, and O-15 wells. There are secondary targets in the S5 and S7 zones as well. Total time to drill, test and complete is expected to be approximately 80 days. In the event of a successful well, tie-in will follow very shortly as several flowlines were constructed earlier this year in anticipation of future drilling.