CALGARY, ALBERTA — (Marketwired) — 06/05/13 — Kulczyk Oil Ventures Inc. (“Kulczyk Oil”, “KOV” or the “Company”) (WARSAW: KOV), an international upstream oil and gas exploration and production company, is very pleased to announce that it has reached record production levels with the tie-in of the Makeevskoye-16 (“M-16”) well in Ukraine. The M-16 well commenced production in late May and produced an average of 2.71 million cubic feet per day (“MMcf/d”) (1.9 MMcf/d net to KOV) of natural gas during the first 4 days after tie-in increasing gross production during that period to almost 28.5 MMcf/d (19.9 MMcf/d net to KOV). The well is operated by KUB-Gas LLC (“KUB-Gas”), a partially-owned subsidiary in which KOV has a 70% effective ownership interest.
Makeevskoye-16
The M-16 exploration well is the deepest well drilled to date by the Company reaching a total depth (“TD”) of 4,300 metres. It was the first well drilled by the Company through the entire Serpukhovian aged section which is overlain by the Moscovian and Bashkirian aged sediments that host the commercial gas reservoirs found previously in the immediate area. The M-16 well commenced drilling in early August and was cased to TD in December 2012. In April 2013, KOV announced that the M-16 well had tested gas from the S5 zone at a maximum rate of more than 4.3 MMcf/d.
Gas processing facility upgrade
After the tie-in of M-16, the KUB-Gas gas processing facility at Makeevskoye (the “Makeevskoye Facility”), which handles the gas produced in both the Makeevskoye and Olgovskoye field areas, is very near its maximum capacity with total throughput of more than 28 MMcf/d. KUB-Gas is currently working on an expansion of the gas processing capacity of the Makeevskoye gas processing facility to accommodate additional production from the Olgovskoye Licence and from continued development of the gas reservoirs discovered by the M-16 well. It is planned that after the upgrade, scheduled to be completed by early in 2014, the Makeevskoye Facility will have a capacity of more than 65 MMcf/d. The Company expects that capital expenditures for this project will not exceed U$6 million ($4.2 million net to KOV).
Jock Graham, Chief Operating Officer of KOV, said: “Our Ukrainian assets continue to grow and the doubling of capacity at the Makeevskoye gas processing facility is another very visible indicator of what we have achieved in Ukraine over the past three years. It will allow for the tie-in of additional gas as we develop the gas pool discovered by the M-16 well and drill other wells into this deep producing zone elsewhere on the Makeevskoye and Olgovskoye licences.”
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 a 90% working interest in a production sharing agreement which gives the Company the right to explore for and produce oil and natural gas from Block L, a 1,123 square kilometre area covering onshore and offshore areas in northern 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.
KOV announced on 25 April that it had entered into an agreement to acquire Winstar Resources Ltd. (“Winstar”), a company with producing and development properties in Tunisia and an exploration block in Romania, subject to the approval of its shareholders. The transaction is expected to close near to the end of June 2013 at which time KOV, while continuing to be listed on the WSE, would list its shares for trading on the TSX.
The main shareholder of the Company is Kulczyk Investments S.A., 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 may contain 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 in Ukraine and to certain wells drilled or seismic activities undertaken within those licence 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 he 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