Cub Energy Inc. announced that it has reached record production levels with the tie-in of the Makeevskoye-16 ("M-16") well in Eastern Ukraine. The well is operated by KUB-Gas LLC, a partially-owned subsidiary in which Cub has a 30% effective ownership interest. The M-16 well commenced production from the S5 zone in late May and produced an average of 2.71 million cubic feet per day ("MMcf/d") (0.81 MMcf/d net) of natural gas during the first four days after tie-in. Gross natural gas production for KUB-Gas during that period increased to approximately 28.5 MMcf/d (8.55 MMcf/d net to Cub) or 4,750 barrels of oil equivalent per day ("Boe/d") (1,425 Boe/d net to Cub). The M-16 well commenced drilling in early August and was cased to a total depth of 4,300 metres in December 2012. In April 2013, the well tested gas from the S5 zone at a maximum rate of more than 4.3 MMcf/d. The M-16 was the first well drilled by the company through the entire Serpukhovian aged section that is overlain by the Moscovian and Bashkirian aged sediments, which host the commercial gas reservoirs found previously in the immediate area.

The company provided production and capital expenditure guidance for the year 2014. For the year, the company expects capital expenditures for this project will not exceed USD 6 million (USD 1.8 million net to Cub). The company expects the Makeevskoye facility to have a capacity of more than 65 MMcf/d.