CALGARY, ALBERTA — (Marketwire) — 03/28/12 — Kulczyk Oil Ventures Inc. (“Kulczyk Oil”, “KOV” or the “Company”) (WARSAW: KOV), an international oil and gas upstream company, announces that KOV and its major shareholder Kulczyk Investments S.A. (“KI”) have mutually agreed that it was not in the best interest of either company to continue the option beyond its 31 March 2012 expiry date.
KOV announced on 6 May 2011 that it had joined the Neconde Energy Limited (“Neconde”) consortium and that Neconde had entered into an agreement with Shell Petroleum Development Company of Nigeria Ltd (“SPDC”) and certain of its partners in Oil Mining License 42 (“OML 42”) pursuant to which Neconde would acquire a 45% participating interest in OML 42. OML 42 is a large block containing previously discovered oil fields in the Niger Delta area of Nigeria. The interest of KOV in the Neconde consortium was 20% subject to a bridge financing arrangement with KI.
On 1 December 2011, KOV announced that the purchase of OML 42 by Neconde was completed for a purchase price, subject to closing adjustments, of $585 million. Of this amount, $435 million was paid by consortium partners as equity contributions to Neconde with KI paying for the potential share of KOV pursuant to the bridge financing arrangement. The remaining $150 million of the total purchase price was funded through Neconde debt financing. Under the terms of the bridge financing arrangement with KI, KOV had until 31 March 2012 to repay KI for its bridge financing, after which date the shares of KOV in Neconde would be transferred to KI.
Tim Elliott, President and Chief Executive Officer of KOV commented:
“OML 42 is a world-class oil property with substantial opportunity for growth in production and reserves. KOV is committed to the growth of the business but following considered due diligence and with our shareholders value at the front of our minds the executive team have decided that to exercise our option would be too dilutive to existing shareholders at current market price. I would like to take this opportunity to thank our major shareholder KI for their support throughout this project.”
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. 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 1,123 square kilometre area covering onshore and offshore areas in northern Brunei and a 36% working interest in Block M, a 1,505 square kilometre 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 kilometrearea 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.
The main shareholder of the Company, Kulczyk Investments S.A. owns approximately 44 % of the issued common shares. Kulczyk Investments S.A. is an international investment house founded by Polish businessman Dr. Jan Kulczyk.
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 potential future activities of the Company in Nigeria that are not 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.
Canada
Suite 1170, 700-4th Avenue S.W.,
Calgary, Alberta, Canada
Telephone: +1-403-264-8877
Facsimile: +1-403-264-8861
UAE
Al Shafar Investment Building,
Suite 123, ShaikhZayed Road,
Box 37174, Dubai, United Arab Emirates
Telephone: +971-4-339-5212
Facsimile: +971-4-339-5174
Poland
Nowogrodzka 18/29
00-511 Warsaw, Poland
Telephone: +48 (22) 414 21 00
Facsimile: +48 (22) 412 48 60
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