Cub Energy Inc. Operations Update for First Quarter of 2016

HOUSTON, TEXAS--(Marketwired - April 28, 2016) - Cub Energy Inc. ("Cub" or the "Company") (TSX VENTURE:KUB) provides the following update for its operations for the first quarter of 2016. This update includes ongoing operations from KUB-Gas LLC ("KUB-Gas"), which Cub has a 35%-ownership interest (increased from 30% effective February 8, 2016), and Tysagaz LLC ("Tysagaz"), Cub's 100%-owned subsidiary.

First Quarter Production and Realized Prices

Average production for the first quarter was approximately 1,644 barrels of oil equivalent ("boe/d") (Cub WI), which was a 22% increase over fourth quarter production of 1,353 boe/d. The majority of the increased production in the first quarter came from Tysagaz due to successful workovers on the RK-23 and RK-21 wells late in 2015 and early 2016 respectively. Tysagaz's production volumes increased to 431 boe/d during the first quarter of 2016 as compared to 200 boe/d during the fourth quarter of 2015.

The estimated natural gas price received in Ukraine during the first quarter of 2016 was $6.23 per thousand cubic feet ("Mcf") as compared $7.23/Mcf in the fourth quarter of 2015. Cub is paid in hryvnia ("UAH"), so the realized price in USD will continue to be influenced by changes in the exchange rate. The exchange rate went from 24.2 UAH/USD at the end of the fourth quarter of 2015 to 26.3 UAH/USD at the end of the first quarter of 2016 for an approximate 8% devaluation.

KUB-Gas Update

During the first quarter, the Company increased its ownership interest in KUB-Gas from 30% to 35% for no additional consideration and can increase its ownership by an additional 5% subject to certain benchmarks and optional payments. As a result of the Company's increased interest, its share of KUB-Gas production volumes increased to 1,213 boe/d during the first quarter of 2016 as compared to 1,153 boe/d during the fourth quarter of 2015.

Tysagaz Update

During the first quarter, the Company set a retrievable plug at RK-21 above the current open perforations in the D-2 through D-3 lower reservoirs and opened the D-0 reservoir for production. On March 11, 2016, the Company was granted the 20-year term Uzhgorod production licence. The Uzhgorod licence covers approximately 75,000 acres which is a 50% increase from its original size of 50,000 acres. Subsequent to the quarter ended March 31, 2016, the Company temporarily suspended production at the RK field due to a termination of a gas blending contract. The Company is currently negotiating with third parties for a new blending agreement and also evaluating blending its own gas. The Company's RK field production utilizes blending of gas whereby it extracts volumes of gas from the pipeline and blends it with its gas and infuses the resulting blended gas back in the pipeline. Production at RK represented approximatley 26% of the Company's first quarter production volume. The Company hopes to resume production at the RK Field in June 2016.