Cub Energy Inc. (KUB:CA)

Ukraine produces about 75 million tons of coal annually, most for industrial applications. As coal production decreases, demand for natural gas increases. With current demand of 3600 bcf annually1, the domestic supply of 500 bcf/yr is supplemented by uncertain supply from Former Soviet Union (FSU) nations.
Ukraine has introduced a number of incentives to encourage energy independence such as low royalties and expedited development approvals.

The Donets-Donbas coal region is a mature coal mining region covering over 50,000 km2 (12 million acres). The Carboniferous-age coals number about 60 distinct seams, the majority of which are over 0.5m thick
Up to this point, coalbed methane has either been flared as a mine-safety precaution or used for localized fuel gas. An estimated 70 bcf of coal gas is released and flared from coal mines annually.

CBM's Untapped Potential

Coal bed methane (CBM) is an untapped opportunity in Ukraine with significant potential for development. Ukraine holds the world's tenth largest CBM reserves, totaling 12 trillion cubic meters. The National Energy Program of Ukraine for the period until 2015 outlines plans for development of Ukraine's energy resources, and fuel and energy complex.
Coal remains the main energy raw material of the country. At present, Ukraine explores only 8% of the potential resources of Coal Bed Methane (120 million cubic meters per year). Exploration of CBM in the U.S. has reached over 50 billion cubic meters annually. Ukraine's methane reserves could cover at least 22 years of Ukraine's gas consumption at it's current level.
With significant worldwide resources of between 100 and 270 trillion cubic meters, coal bed methane production could be an important source of energy in the 21st century. CBM has become an important source of domestic natural gas production in such countries as the United States, Canada and Australia. Ukraine has an appreciable share of this volume, with estimated resources equal to 12 trillion cubic meters of methane, that is, 3 to 3.5 times more than Ukraine's resources of natural gas.3

CBM Comparison Chart

3P International Energy

• 3P has signed an MOU with partners Eurogas GmbH and OJSC NT Technologies of Kiev to earn a 33% interest in five concessions in the Donets Basin
• The concessions cover 512 km2 (125,000 acres) with a resource potential of over 1 tcf 2.
• 3P will earn this interest by participating in drilling and completing 10 shallow CBM wells to gather data and evaluate gas flow rates
• 3P has introduced a low cost approach to CBM development utilizing proprietary drilling and completion techniques

1 World Resources Institute, 2003
2 Resource-in-Place numbers as per Institute ofGeology and Geochemistry of Combustible Minerals of Ukraine
3 Coal Bed Methane Extraction and Projects Development in the Ukraine, International Business Strategies, March 2010