CALGARY, ALBERTA — (Marketwire) — 03/27/12 — Kulczyk Oil Ventures Inc. (“Kulczyk Oil”, “KOV” or the “Company”) (WARSAW: KOV), an international upstream oil and gas company, is pleased to report that the Olgovskoye-8 (“O-8”) and Olgovskoye-18 (“O-18”) wells in Ukraine have been tied-in for commercial production at gross production rates of more than 1 million cubic feet per day (“MMcf/d”) of natural gas for each of the wells. KOV–s net production from Ukraine has now increased to more than 14 MMcf/d with gross production of more than 20 MMcf/d from the four producing fields. The wells are operated by KUB-Gas LLC (“KUB-Gas”), a partially-owned subsidiary in which KOV has a 70% effective ownership interest.
Jock Graham, KOV–s Executive Vice President, commented: “We are extremely pleased to have surpassed an important milestone as production over the last 10 days has averaged more than 20.3 MMcf/d for KUB-Gas which gives KOV a net production of 14.2 MMcf/d. I would say that this is further evidence of the project–s quality and the production levels are something we hope to continue improving going forward, particularly given the potential impact of the next wells in the ongoing drilling campaign.”
Olgovskoye-8
The O-8 well, reached a total depth (“TD”) of 2,780 metres in early 2011, encountering a potential gas-bearing zone with very low permeability. The zone was fracture stimulated in the fourth quarter of 2011. The frac, which was designed to penetrate beyond the immediate vicinity of the wellbore by creating fractures and increasing permeability to liberate gas trapped in the reservoir, was very successful with test rates as high as 1 MMcf/d, as reported in the KOV press release of 14 November 2011.
Olgovskoye-18
The O-18 well reached its original TD of 2,300 metres in early November 2011 and following analysis of data gathered during drilling was deepened to 2,650 metres and cased to the new TD as a potential gas producer. Subsequent testing indicated a maximum rate of approximately 1.2 MMcf/d of natural gas through a 5 mm choke.
About Kulczyk Oil
Kulczyk Oil is an international upstream oil and gas exploration and production company with a diversified portfolio of projects in Brunei, Syria and Ukraine and with a risk profile ranging from exploration in Brunei and Syria to production and development in Ukraine. In addition, KOV has an option to participate for a 9% net indirect working interest in OML 42 in Nigeria. The common shares of the Company trade on the Warsaw Stock Exchange under trading symbol “KOV”.
In Brunei, KOV owns working interests in two production sharing agreements which gives the Company the right to explore for and produce oil and natural gas from Block L and Block M. KOV owns a 90% working interest in Block L, a 1,110 square kilometre (275,000 acre) area covering onshore and offshore areas in northern Brunei and a 36% working interest in Block M, a 1,505 square kilometre (372,000 acre) area onshore in southern Brunei.
In Ukraine, KOV owns an effective 70% interest in KUB-Gas LLC. The assets of KUB-Gas consist of 100% interests in five licenses near to the City of Lugansk in the northeast part of Ukraine. Four of the licenses are gas producing.
In Syria, KOV holds a participating interest of 50% in the Syria Block 9 production sharing contract which provides the right to explore for and, upon the satisfaction of certain conditions, to produce oil and gas from Block 9, a 10,032 square kilometre (2.48 million acre) area in northwest Syria. The Company has an agreement to assign a 5% ownership interest to a third party which is subject to the approval of Syrian authorities, and which, if approved, would leave the Company with a remaining effective interest of 45% in Syria Block 9.
In Nigeria, KOV has an option until 31 March 2012 to participate for a 9% net indirect interest in OML 42, an 814 km2 license area in the Niger Delta with oil production and shut-in oil and gas producing capability.
The main shareholder of the Company, Kulczyk Investments S.A. owns approximately 44.3 % of the issued common shares. Kulczyk Investments S.A. is an international investment house founded by Polish businessman Dr. Jan Kulczyk.
For further information, please refer to the Kulczyk Oil website ().
Translation: This news release has been translated into Polish from the English original.
Forward-looking Statements This release contains forward-looking statements made as of the date of this announcement with respect to future activities of KUB-Gas and related to its five license areas in Ukraine and to certain wells drilled or seismic activities undertaken within those license areas that either are not or may not be historical facts. Although the Company believes that its expectations reflected in the forward-looking statements are reasonable as of the date hereof, any potential results suggested by such statements involve risk and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Various factors that could impair or prevent the Company from completing the expected activities on its projects include that the Company–s projects experience technical and mechanical problems, there are changes in product prices, failure to obtain regulatory approvals, the state of the national or international monetary, oil and gas, financial, political and economic markets in the jurisdictions where the Company operates and other risks not anticipated by the Company or disclosed in the Company–s published material. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties and actual results may vary materially from those expressed in the forward-looking statement. The Company undertakes no obligation to revise or update any forward-looking statements in this announcement to reflect events or circumstances after the date of this announcement, unless required by law.
Contacts:
Kulczyk Oil Ventures Inc. – Canada
Norman W. Holton
Vice Chairman
+1-403-264-8877
Kulczyk Oil Ventures Inc. – Poland
Jakub J. Korczak
Vice President Investor Relations & Managing Director CEE
+48 22 414 21 00