Cub Energy Inc. ("Cub" or the "Company") (TSXV: KUB) announced on October 22 that corporate production has reached a new high of more than 1,668 barrels of oil equivalent per day ("boe/d") after the stimulation of two wells in
Ukraine. The Olgovskoye-4 ("O-4") and Olgovskoye-5 ("O-5") wells were successfully stimulated resulting in maximum test rates of 4.0 million cubic feet per day ("MMcf/d") from the O-4 well and 1.3 MMcf/d from the O-5 well.
The O-4 well has been tied-in for commercial production and is currently producing at 3.9 MMcf/d (1.17 MMcf/d net) of natural gas. The Ukraine production is operated by KUB-Gas LLC ("KUB-Gas"), a partially-owned subsidiary in which Cub has a 30% ownership interest. Gross production from KUB-Gas is now more than 30.5 MMcf/d of natural gas and 127 bbl/d of condensate resulting in net production to Cub’s 30% interest of 9.15 MMcf/d of natural gas and 38.1 bbl/d of condensate (1,563 boe/d).
The Olgovskoye/Makeevskoye gas processing facility is at maximum capacity and the production of the O-4 well has backed out approximately 2 MMcf/d. The facility is being expanded and, upon completion in the first quarter of 2014, the facility will be able to handle up to 68 MMcf/d of natural gas.
Mikhail Afendikov, Chairman Chief Executive Officer of Cub said – "The success of these fractures is very exciting for the Company. We have extended our record of frac success in Ukraine and have potentially proved up a significant new play, which could extend over much of our O and M license areas. I am proud of our team’s continued efforts to update our data and understanding of these structures. Their work has yielded valuable results and could further extend the Company’s drilling programme further into the future."
The stimulated zone in the O-4 well was a Middle-Bashkirian silty sandstone interval with a gross thickness of 5 metres which occurs at a depth of approximately 2,558 metres, referred to as the R30c unit, the same zone that was successfully stimulated in the O-6 and O-8 wells in 2011. The zone had low permeability and was not producing gas at commercial rates before the stimulation in the O-4 well. The O-4 well flowed gas at 4.0 MMcf/d immediately after the stimulation and has been tied-in for commercial production.
The R30c zone was also stimulated in the O-5 well and had a gross thickness of 12 metres at a depth of approximately 2,300 metres. The zone had low permeability and was not producing gas before the stimulation. After the successful frac, the O-5 well immediately flowed gas at 1.3 MMcf/d and has been suspended pending tie-in during the first quarter of 2014 after the upgrade of the gas processing facility.
The O-5 well finished drilling in April 2007 after reaching a TD of 2,700 metres. Multiple gas-bearing zones were encountered in the Moscovian and Bashkirian sections. The well was selectively perforated from the interval 2,281 to 2,325 metres, which included formations above, below, and including the R30c. The