Cub Energy Inc.: Dual Completions of Olgovskoye-18 and Makeevskoye-21 Wells Successful

HOUSTON, TEXAS--(Marketwire - Dec. 21, 2012) -

Editors Note: There is a photo associated with this press release.

Cub Energy Inc. ("Cub" or the "Company") (TSX VENTURE:KUB), a Ukraine-focused upstream oil and gas company, announces the successful dual completions of the Olgovskoye-18 ("O-18") and Makeevskoye-21 ("M-21") wells in eastern Ukraine during the fourth quarter of 2012. The O-18 and M-21 are both operated by KUB-Gas LLC ("KUB-Gas"), a partially-owned subsidiary in which Cub has a 30% ownership interest. To the knowledge of Cub, these wells are the first to be dually completed successfully in Ukraine.

HIGHLIGHTS

• The KUB-Gas owned snubbing unit was used to prepare the O-18 well for dual completion and perforate the B3 zone, a 13 metre thick Bashkirian sandstone reservoir;
• The snubbing unit was also used to dually complete the M-21 well in the R21tb zone. The R21tb was perforated and is expected to flow gas at commercial rates after a fracture stimulation currently scheduled for the first quarter of 2013;
• Production from two horizons in both the O-18 and M-21 wells is expected to commence in the first quarter of 2013;

Olgovskoye-18

The O-18 well reached its original total depth ("TD") of 2,300 metres in early November 2011 and, following analysis of data gathered during drilling, was deepened to 2,650 metres and cased to the new TD as a potential gas producer. Interpretation of wireline logs indicated up to 38.5 metres of gas pay in 7 zones and of these one, the R22 zone, a 4 metre thick Bashkirian sandstone reservoir at a depth of 2,035 metres, was perforated and tested gas at a rate of approximately 1.2 million cubic feet per day ("MMcf/d") through a 5 mm choke in mid-December 2011. The R22 zone was tied-in for commercial production in March 2012.

By utilizing the KUB-Gas owned snubbing unit, the B3 zone, a 13 metre thick Bashkirian sandstone reservoir at a depth of 2,108 metres was perforated without the need to suppress the gas flow from the R22 zone. The B3 zone flowed gas at 0.700 MMcf/d but declined to a stabilized rate of 0.136 MMcf/d through a 3 mm choke after a two hour flow test and was then shut-in for pressure buildup. Analysis of the pressure data will assist in a determination of whether there is damage to the formation or whether a fracture stimulation is required. In the meantime, wellsite compression is also being considered.

Makeevskoye-21

The M-21 well reached its TD of 2,210 metres in March 2012. It encountered 6 metres of gas pay in a Moscovian sandstone formation called the R8 at a depth of 1,450 metres and a second potential gas zone (the R21tb zone) in rocks of Bashkirian age at a depth of 2,115 metres. This deeper zone, which had not previously been tested in the area, appeared to have approximately 10 metres of potential gas pay based upon interpretation of wireline logs. The R8 zone was tied in for commercial production in August 2012 at an initial rate of 1.7 MMcf/d.

The snubbing unit was used to perforate the well in the R21tb zone so that the well is dually completed in both the R8 and R21tb zone. The R21tb zone is relatively tight and requires fracture stimulation before commercial gas production will be possible from this lower zone. The Company plans to fracture stimulate this zone in the first quarter 2013.

The Company is confident that dual completions will prove to be a cost-effective way to improve overall production in Ukraine by enabling the Company to increase production from existing producing wells. More than 10 additional legacy wells have been identified as potential dual completion candidates and it is anticipated that most of the new wells drilled will also be dual completed.

Notes to Editor:

The dual completion of a well allows for natural gas production from the two zones at the same time. A dual completion occurs when a wellbore is equipped with tubulars and equipment to enable production from two segregated zones. A snubbing unit is specialized service rig that allows for the work over of wells under pressure without any need to kill an existing producing zone. Stopping the flow from an existing producing zone, especially one that is partially depleted through production, can lead to damage to the producing zone leading to a permanent impairment of its gas producing capability. The snubbing unit was built for KUB-Gas in Canada and imported in to the Ukraine in January 2012. It can be moved in a few truck loads and can be rigged up and ready for operations more quickly than a conventional service rig.

About Cub Energy Inc.

Cub Energy Inc. (TSX VENTURE:KUB) is a Ukraine-focused upstream oil and gas company with 110,000 net acres, in nine exploration and production licences, in the two major producing basins within Ukraine. The Company's strategy is to use western technology and capital, combined with local expertise to create value in its undeveloped land base, building a portfolio of high margin producing oil and gas assets. The Company has offices in Houston, Toronto and Kyiv and trades in Toronto under the stock symbol KUB.

For further information please contact us or visit our website: www.cubenergyinc.com.

Reader Advisory

Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. CUB believes that the expectations reflected in the forward-looking information are reasonable; however there can be no assurance those expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.

Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors that could cause the results to differ materially from those expressed in the forward-looking information include, but are not limited to: general economic conditions in the Ukraine and globally; industry conditions, including fluctuations in the prices of natural gas; governmental regulation of the natural gas industry, including environmental regulation; unanticipated operating events or performance which can reduce production or cause production to be shut in or delayed; failure to obtain industry partner and other third party consents and approvals, if and when required; competition for and/or inability to retain drilling rigs and other services; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; stock market volatility; volatility in market prices for natural gas; liabilities inherent in natural gas operations; competition for, among other things, capital, acquisitions of reserves, undeveloped lands, skilled personnel and supplies; incorrect assessments of the value of acquisitions; geological, technical, drilling, processing and transportation problems; changes in tax laws and incentive programs relating to the natural gas industry; failure to realize the anticipated benefits of acquisitions and dispositions; and the other factors. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

This cautionary statement expressly qualifies the forward-looking information contained in this news release. We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.

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