Houston, Texas – July 29, 2015 – Cub Energy Inc. (“Cub” or the “Company”) (TSX-V: KUB) provides the following update for its operations for the second quarter of 2015. This update includes ongoing operations from KUB-Gas LLC (“KUB-Gas”), which Cub has a 30% ownershipinterest, and TysagazLLC (“Tysagaz”), Cub’s 100% owned subsidiary. 

First Quarter Production and RealizedPrices 

Average production for the second quarter was approximately 1,414 boe/d (Cub WI), representing a 14% decrease from 1,644 boe/d in the first quarter. Production in Ukrainecontinues to be below capacity due to thelingering effects of government legislationattempting to reserve a large share of the natural gas market for the state owned National Joint Stock Company Naftogaz (“Naftogaz”). The remaining market wasinsufficient to accept all available gas,resulting in cutbacks by private producers including Tysagazand KUB-Gas.

The estimated prices received in Ukraine during the quarter were $7.08 per thousandcubic feet (“Mcf”) and $46.89 per barrel (“bbl”) for natural gas and liquids respectively. The comparable prices realized in Q1 2015 were $7.77/Mcf and $39.83/bbl. Cub is paid in hryvnia (“UAH”), so the realizedprice in USD will continue to be influenced by changesin the exchange rate. The exchange rate has stabilized in the last quarteras the rate went from 23.5 UAH/USD at the end of the first quarterto 21.0 UAH/USD at the end of the second quarter. 

New Licence

 On June 8, 2015, the Company announced that the West Olgovskoye block in eastern Ukraine had been awardedto KUB-Gas Borova LLC ("KUB-Gas Borova") (a newly incorporated subsidiary of KUB- Gas) by way of a special permit. West Olgovskoye is locatedin the Kharkiv Oblast, immediately offsetting the Olgovskoye and North Makeevskoye licences currently owned and operatedby KUB-Gas. It covers an area of 449 km2 (approximately 110,000 acres), and surrounds (but does not include) the existing Druzhelyubovskoe gas/condensate field, and very old vintage 2D seismicdata suggests the existenceof additional undrilledstructures. The term ofthis new special permit is for 20 years with the right to a 20-year extension, during which KUB-Gas Borova will be allowedto conduct both exploration and production activities. There are work commitments of UAH 202.3 millionor approximately $9.6 millionat the current exchange rate of 21.0 UAH/USD.Almost 90% of the total required spending is scheduled for between2018 and 2020.

KUB-Gas Drilling& Workover Update 

The M-22 well in Ukraine has been suspended and added to the list of wells being considered for fracture stimulation (see Outlook).The S13, S13a and S13b zones were all non-commercial despite initially appearingpromising on logs. The S6 zone did build up pressure after perforating andproduced gas at rates too small to measure. The well has been suspended with a wellheadand tubulars appropriate for fracturestimulation. If successful, M-22 will qualify for the reduced royalty rate of 30.25% for its first two years of production under the current royalty regime (see also Ukraine Legislative Developments below). In addition, the commissioning of the field compression for Olgovskoye field is currentlyunderway.

Ukraine Legislative Developments 

As disclosed in the Company’s press release of December 4, 2014, during November 2014, the Ukraine government issued three decrees (No.’s 596, 599, and 647), which cumulatively required 170 of the largest gasconsumers in Ukraine to purchase their gas solely fromNaftogaz until the end of February 2015. A Ukrainecourt subsequently overturned these regulations, and this decision was subsequently upheld on appeal. The government appealed again, but on March 31, 2015, the High Administrative Court of Ukrainedismissed the government’s claims in their entirety. The market has been slow to readjust. 

On June 3, 2015, the National Bank of Ukraine issued Resolution No. 160, which extended most of the existingrestrictions on foreign currency transactions set out in Resolution No. 758, including the cross- borderdividend restriction, and introduced several additional restrictions, all to be effectiveuntil September 3, 2015. These restrictions continue to make it difficult for repatriating dividends from Ukraine. 

On July 14, 2015, the Cabinet of Ministers of Ukraine submitted to the Rada (the Ukrainian parliament) a draft bill which would reduce the royalties on natural gas from their current level of 55% (28% on wells deeper than 5,000 metres).If passed, those respective royalty rates would drop to 29% and 14% effective October 1, 2015 for existing production. Also, the government proposes to introduce a new tax regime for wells drilled after January1, 2016 – the royaltyrate will be reduced to 20 percent (10 percent for wells deeper than 5,000 metres), and an additionalprofits tax surchargewill be levied at the rate of 30% on profits.Full details of how these rates would be appliedand the tax base for calculation as well as administration of the surcharge are yet to be determined by the government. The current two-year royalty relief period for new gas wells at 30.25% would no longer apply. Royaltieson oil and liquids would remain unchangedat 43%. Importantly, this draft bill may be subject to changes while going through first and second readingsin the Rada. 

Outlook 

Cub is re-evaluating its future capitalprograms on its 100% owned and operated Tysagaz assets in light of the proposed reduction of royalty rates scheduled to be effective October 1, 2015, subject to parliamentary approval.At present, the Company is considering several workovers in late 2015 or early 2016. 

At KUB-Gas, a workoverrig is moving to the NM-3 well drilled in 2013 which found small amounts of oil in the Visean formation. Operations will include perforating a higher intervaland obtaining additional production and pressuredata. Management believesthat the Visean zone is tight, and likely will require fracture stimulation to achievecommercial rates. This operation also will fulfill work obligations required to retain the North Makeevskoye licence. 

KUB-Gas may consider additionalcapital expenditures on developmentprojects during the balanceof 2015, subject to keepingsuch expenditures within operating cash flow and no furthermaterial adverse changesin either the fiscal terms or the security situation in and around the Ukraine licences. A three well fracture stimulation program for O-11, O-15 and M-22 is being considered for later this year, pending the approvalof the new royalty regime and cash availability. 

Once economicconditions improve, KUB-Gashas a significant inventory of drillinglocations and other projects in the Ukraine licences including:

·        Ten firm drilling locations in the Olgovskoye, Makeevskoye and North Makeevskoye licences, plus up to seven more locationscontingent upon success. KUB-Gas expects this inventory to grow once the technicalteam examines the data on the newly acquired West Olgovskoye licence.

·        Several fracture stimulations candidates in addition to the three mentionedabove. 

Ukraine Gas Prices 

The official gas price (the “Limit Price”) for the month of July is UAH6,600 per thousand cubic meters (“Mcm”) (excluding 20%VAT), or $8.86/Mcf using an exchange rate of 21.0 UAH/USD. The Limit Price is the maximumprice at which gas can be sold to industrial consumers. It is set each month by the National Commission for Energy Regulation and is generally based on the import price. The actual price receivedby Cub will also be influenced negatively by the previously-mentioned legislation reserving large parts of the Ukrainiangas market for Naftogaz. The market has been slow to readjust and to the extent that it does not return to its pre-legislative levels, increased competition for the remaining creditworthy customers may lead to lower realizedgas prices. The actual price received will also be affected by the approximate 10% profit margin of the intermediaries through which the gas is sold.

Royalties are payable on the Limit Price set each month. To the extent that realizedprices are lower due to sales expensesor weak markets, the effective royalty rates will be higher.

Cautionary Statement:

BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

About Cub EnergyInc.

Cub Energy Inc. (TSX-V: KUB) is an upstream oil and gas company, with a proven track record of exploration and production cost efficiency in the Black Sea region. The Company’s strategy is to implement western technology and capital, combined with local expertise and ownership, to increase value in its undeveloped land base, creating and further building a portfolioof producing oil and gas assets within a high pricing environment.

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

Mikhail Afendikov

Chairman and Chief Executive Officer (713) 677-0439

mikhail.afendikov@cubenergyinc.com

Patrick McGrath

Chief Financial Officer (713) 577-1948

patrick.mcgrath@cubenergyinc.com

Reader Advisory

Except for statements of historical fact, this news release contains certain “forward-looking information” withinthe 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 certainevents or conditions “may”or “will” occur. Cub believesthat 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 orachievements. Consequently, there is no representation that the actualresults 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 expressedin the forward-looking information include,but are not limited to: general economic conditions in Ukraine, the Black Sea Region and globally;political unrest and securityconcerns in Ukraine; industry conditions, including fluctuations in the prices of natural gas; governmental regulation of the natural gas industry,including environmental regulation; unanticipated operating events or performancewhich can reduceproduction 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 capitalon acceptable terms; theneed to obtainrequired approvals from regulatory authorities; stock market volatility; volatility in market prices for naturalgas; liabilities inherentin 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, processingandtransportation problems; changesin tax laws andincentive programs relating to the natural gas industry; failure to realise the anticipated benefits of acquisitions and dispositions; and the other factors.Readers are cautioned that this list of risk factorsshould not be construed as exhaustive.