Mr. Mikhail Afendikov reports

CUB ENERGY INC. ANNOUNCES RESUMPTION OF DRILLING IN EASTERN UKRAINE

The security situation in and around Cub Energy Inc.'s Makeevskoye, Olgovskoye and North Makeevskoye licences in eastern Ukraine has improved, and KUB-Gas LLC, Cub's 30-per-cent-owned subsidiary which owns and operates the eastern Ukraine licences, has resumed its drilling program with the spudding of the Makeevskoye-22 well. This well will qualify for the lower royalty rate of 30.25 per cent.

M-22 is located on the southwest side of the major fault that runs through the Makeevskoye and Olgovskoye licences and is a near offset to the M-2 well drilled in 1991, which tested 300,000 cubic feet per day from the S5 in the Serpukhovian section and is currently producing approximately 272,000 cubic feet per day. The primary target in M-22 is the S6 zone which has proven very prolific in the M-16, M-17 and O-15 wells. There are secondary targets in the S5 and S7 zones as well. Total time to drill, test and complete is expected to be approximately 80 days. In the event of a successful well, tie-in will follow very shortly as several flow lines were constructed earlier this year in anticipation of future drilling.

We seek Safe Harbor.