Kulczyk Oil Ventures Inc.
WARSAW : KOV

Kulczyk Oil Ventures Inc.

April 07, 2011 04:33 ET

Kulczyk Oil Ventures Inc.: Block L Update

Summary:

- Lempuyang-1 testing has been curtailed due to mechanical issues

- Further work is planned in Block L beginning with 3D seismic across the West Jerudong oilfield

CALGARY, ALBERTA--(Marketwire - April 7, 2011) - Kulczyk Oil Ventures Inc. (WARSAW:KOV) ("Kulczyk Oil", "KOV" or "Company") advises that the Lempuyang-1 well testing operations are now complete. Continued mechanical issues resulted in the testing programme being curtailed due to safety concerns associated with gas flow into the well that could not be properly controlled. This is believed to be due to failure of the packer in the well and/or damage to the well casing above the packer. As a result, the Lempuyang-1 well will now be plugged and abandoned.

The Lempuyang-1 well intersected reservoir-quality sands, with gas being flowed to surface from two test intervals. Some thin gas sands were interpreted at the lower reservoir test interval (3,077-3,131.5 metres measured depth ("MD") of which 24 metres were perforated). The upper reservoir test interval (2,849-2,867.5 metres MD of which all 18 metres were perforated) flowed gas to surface before the operator was forced to cease testing due to a down hole mechanical failure. As a result, no gas flow rates could be established. The data which were obtained during the testing helps support the optimism of the joint venture partners ("JV") as to the prospectivity of the Lempuyang prospect and surrounding acreage. Lempuyang-1 drilling and testing results will now be integrated into the existing data base and used for future assessment of the updip area within the eastern part of Block L where a contingent 3D seismic programme is currently being considered.

In addition to the current testing programme described above, the JV anticipates that the following exploration activity will be initiated in Block L in the near term:

  1. Seismic acquisition at West Jerudong. The JV plans to begin shooting 130 km2 of 3D seismic over the Jerudong oil field in Q3 2011. This field was previously produced from 1956-1962 and was shut-in while still on production and without being fully depleted. While the field was originally drilled on surface oil seeps and limited 2D seismic coverage, the JV intends to acquire 3D seismic to accurately map the known fault blocks and to identify additional potential oil prospects on the Jerudong anticline.
  2. A 3D seismic patch (13 km2) and 2D seismic tie-line (13 km) east of the Lempuyang-1 well will be acquired to confirm potential structural rollover updip of the Lempuyang-1 well. Depending on the results, an extension of the 3D seismic programme of up to 150 km2 could also be undertaken.

The forward plan is illustrated below:

To view the "forward plan" figure, please visit the following link: http://media3.marketwire.com/docs/KLZ_fig1.pdf

The Block L Joint Venture is comprised of Kulczyk Oil Brunei Limited (40%), AED South East Asia Limited (50%) and QAF Brunei Sdn Bhd (10%).   

Assets of Kulczyk Oil

Kulczyk Oil is an international upstream oil and gas exploration 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 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 40% working interest in Block L,a 2,220 square kilometre (550,000 acre) area covering onshore and offshore areas in northern Brunei and a 36% working interest in Block M, a 3,011 square kilometre (744,000 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 70% in the Syria Block 9 production sharing contract which provides the right to explore for and, upon fulfillment 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 agreements to assign an aggregate of 25% in ownership interests to third parties which are 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 almost 50% 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 (www.kulczykoil.com).

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 the Company in Brunei or related to Block L or the Lempuyang-1 well 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.

Contact Information

  • Kulczyk Oil Ventures Inc. - Canada
    Norman W. Holton
    Vice Chairman
    +1 403 264 8877
    nholton@kulczykoil.com
    or
    Kulczyk Oil Ventures Inc. - Poland
    Jakub J. Korczak
    Vice President Investor Relations & Managing Director CEE
    +48 (22) 414 21 00
    jkorczak@kulczykoil.com
    or
    Kulczyk Oil Ventures Inc. - Canada
    Suite 1170, 700-4th Avenue S.W., Calgary, Alberta, Canada
    +1-403-264-8877
    +1-403-264-8861 (FAX)
    or
    Kulczyk Oil Ventures Inc. - Dubai
    Al Shafar Investment Building, Suite 123, Shaikh Zayed Road,
    Box 37174, Dubai, United Arab Emirates
    +971-4-339-5212
    +971-4-339-5174 (FAX)
    or
    Kulczyk Oil Ventures Inc. - Poland
    Nowogrodzka 18/29
    00-5211 Warsaw, Poland
    +48 (22) 414 21 00
    +48 (22) 412 48 60 (FAX)
    www.kulczykoil.com