Cub Energy Announces New Production High and Operations Update

Cub Energy Inc
Houston, Texas, Friday, June 27, 2014

Houston, Texas – June 27, 2014 – Cub Energy Inc. (“Cub” or the “Company”) (TSX-V: KUB) announces that KUB-Gas LLC (“KUB-Gas”) achieved a significant milestone in daily production –over 1 million cubic metres per day (“MMcm/d”) or approximately 36 million cubic feet per day (“MMcf/d”) after recent tie-ins. This equates to approximately 10.8 MMcf/d net production to Cub from KUB-Gas. Cub has a 30% ownership interest in KUB-Gas through its 30% shareholding of KUBGAS Holdings Limited.

Although production has increased, and will continue, Cub and its partner have decided to suspend current developmental field operations to ensure the continued safety of employees and assets during the ongoing regional conflict in eastern Ukraine. The declared ceasefire between the Ukraine government and pro-Russian separatists has not materialized, forcing a situation where KUB-Gas contractors are refusing to support continued developmental operations at this time. As such, KUB-Gas is continuing with production, but suspending developmental field operations until the situation stabilizes. KUB-Gas will suspend operations on the following:

 The S6 zone in the O-11 well has been perforated and testing commenced. Upon perforation, the well had a strong air blow then flowed gas to surface. The well was shut in for a pressure build up and the pressure had not stabilized at the time of this release. No additional tests will be undertaken at this time.

 Surface casing has been set in the NM-4 well at a depth of 100.2 metres, and the rig has been demobilized.

Additionally, the Vergunskoye field, which is located in the area close to the city of Lugansk, has been temporarily shut in. This field’s production rate of 4 Mcf/d represents less than 1% of the Company’s total production.

Western Ukraine

The Company’s western Ukraine wells on the Rusko-Komarovske (“RK”) field (RK-2, RK-6, RK-21 and RK-22) continue to produce and drilling operations at RK-1 are on schedule.

Mikhail Afendikov, Cub’s Chief Executive Officer said, “We are very pleased to reach this high production milestone. While we are disappointed in our temporary suspension of our field operations in eastern Ukraine, we must consider the safety of our employees. We are pleased to continue production and hope to return to normal operations in eastern Ukraine soon.”

About Cub Energy Inc.

Cub Energy Inc. (TSX-V: KUB) is an upstream oil and gas company, with a proven track record of exploration and production cost efficiency in the Black Sea region. The Company’s strategy is to implement western technology and capital, combined with local expertise and ownership, to increase value in its undeveloped land base, creating and further building a portfolio of producing oil and gas assets within a high pricing environment.