CALGARY, ALBERTA — (Marketwire) — 05/07/12 — Kulczyk Oil Ventures Inc. (“Kulczyk Oil”, “KOV” or the “Company”) (WARSAW: KOV), an international upstream oil and gas exploration and production company, is pleased to announce that the North Makeevskoye-1 (“NM-1”) exploration well has commenced drilling. The NM-1 well, which is operated by KUB-Gas LLC (“KUB-Gas”), a subsidiary in which KOV has a 70% effective ownership interest, is the first well to be drilled on the North Makeevskoye Exploration Licence in Ukraine.
North Makeevskoye Exploration Well
The North Makeevskoye-1 (“NM-1”) exploration well is expected to take approximately 40 days to reach a planned total depth (“TD”) of 2,500 metres. Some drill stem tests (“DSTs”) may be undertaken and, if initiated, additional time may be needed before TD is reached. The NM-1 well will target a prospect with multiple reservoir units in Bashkirian, Muscovian and Serpukovian aged sediments and will be drilled with the KUB-Gas owned K-200 drilling rig. The NM-1 well is located approximately 10 kilometres to the northeast of the Olgovskoye Field. RPS Energy, the Company–s independent engineering firm, in their 2011 year-end report dated March 20th, 2012, allocated Low, Mid and High Case Prospective Resources to the NM-1 prospect, net to KOV, of 7.78 Bcf, 30.23 Bcf and 75.04 Bcf respectively.
North Makeevskoye Licence
In January 2011, KOV announced that KUB-Gas was awarded the North Makeevskoye exploration licence area in Ukraine. The North Makeevskoye Exploration Licence is located immediately northeast of KUB-Gas– Makeevskoye and Olgovskoye licences, near the City of Lugansk in eastern Ukraine. The Company believes the licence to be geologically similar to the productive areas which lie along the primary South-Eastern Dnieper-Donets Basin gas/condensate structural trend – such as the adjacent KUB-Gas Makeevskoye and Olgovskoye Licences. The award of the 19,050 hectare (47,073 acre) North Makeevskoye Licence to KUB-Gas increased the Company–s total holdings to five licence areas and increased KUB-Gas– total area under licence by more than 110% to 36,315 hectares (89,736 acres). The North Makeevskoye Exploration Licence has a five year term effective from 29 December 2010.
Jock Graham, Executive Vice President of KOV, commented:
“We are excited about the potential of the North Makeevskoye Licence, which we consider to be highly prospective. There are several large undrilled structures on the licence, one of which will be targeted by the NM-1 exploration well. Wells such as NM-1 have the potential to add significant value to the Company and help provide the basis for future reserves and revenue growth.”
During the second quarter of 2011, KUB-Gas acquired 71 kilometres of new 2D seismic data over the North Makeevskoye Licence. Interpretation of this new data in combination with approximately 275 kilometres of pre-existing 2D seismic data resulted in NM-1 being defined as the first drilling location on this new licence. In the first quarter of 2012 225 km2 of new 3D seismic data was acquired over the majority of the North Makeevskoye Licence. Processing of the seismic data is currently underway and interpretation of the processed data may define additional drilling locations by August 2012.
Defined Terms
“Prospective Resources” are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective Resources have both an associated chance of discovery and a chance of development. Prospective Resources are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be sub-classified based on project maturity.
About Kulczyk Oil
Kulczyk Oil is an international upstream oil and gas exploration and production company with a diversified portfolio of projects in Ukraine, Brunei and Syria 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 Ukraine, KOV owns an effective 70% interest in KUB-Gas LLC. The assets of KUB-Gas consist of 100% interests in five licences near to the City of Lugansk in the northeast part of Ukraine. Four of the licences are gas producing.
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 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 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.
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.
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 licence areas (Vergunskoye, Krutogorovskoye, Makeevskoye, North Makeevskoye and Olgovskoye) in Ukraine and to certain wells drilled within those licence areas 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.
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