Current KUB:CA Stock Info

New law guarantees government won’t forcibly take assets

On Dec. 30, 2017, Ukraine President Petro Poroshenko signed a new law reducing the natural gas royalty rate on all new wells drilled after Jan. 1, 2018 from 29% to 12%.

“The Agreement for the Encouragement and Protection of Investment” ties Ukraine and the OPEC Fund for International Development (OFID) together in an economic pact.

According to Law-Now, the Ukrainian Parliament adopted the law on Dec. 5, 2017 and sent it to the president. The agreement guarantees that the government will not forcibly take away assets for public use and investments made can be freely transferred between the two parties.

Cub Energy Inc. (ticker: KUB), a Houston-based E&P, commented in a press release that the new 12% natural gas royalty rate and 18% corporate tax rate will encourage domestic natural gas development. Additionally, the Ukrainian Parliament can’t change this law for at least five years (Jan. 1, 2023). In 2023, the law can be amended or left as-is. Cub Energy has 311,000 gross acres (142,000 net) in two prospective basins in Ukraine.

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