Kulczyk Oil Ventures Inc.

Kulczyk Oil Ventures Inc.

October 08, 2010 04:31 ET

Kulczyk Oil Ventures Inc.: Brunei Block L Lempuyang-1 Update

CALGARY, ALBERTA--(Marketwire - Oct. 8, 2010) - Kulczyk Oil Ventures Inc. (WARSAW:KOV) ("Kulczyk Oil" or "KOV") advises that theLempuyang-1 exploration well in Block L, onshore Brunei Darussalam has reached a final total depth ("TD") of 3,220 metres measured depth from rotary table ("MDRT") (2,817 metres true vertical depth) . The preliminary interpretation of the wireline logs suggests gas charged reservoirs may have been encountered in three target horizons.

The drilling and wireline logging of the Lempuyang-1 well is now complete and a 4.5" liner is being set to total depth in preparation for the possible testing of the well. The TD was set above the original proposed depth of 3,500 metres MDRT because of drilling challenges associated with managing overpressures in the well. Overpressure was expected and accounted for in the original well design. However, several significant gas kicks encountered while drilling meant that the design needed to be modified to suit the conditions in the wellbore. Three of the four target horizons in the wellbore were fully penetrated and assessed by the well. However, only the upper part of the lowest horizon (Green) was intersected. The preliminary interpretation of the wireline logs indicates possible gas charged reservoirs at each of the three lowest target horizons. 

The Lempuyang prospect comprises five fault blocks with up to five target horizons in each block. 3D seismic data acquired in May 2009 indicated seismic amplitude anomalies which appeared to correspond to the target zones. Lempuyang-1 was designed to intersect four of the five seismic horizons.

The operator has advised that they intend to proceed to a testing program and are optimistic about the commerciality of the prospect. However, Kulczyk Oil has yet to reach a similar conclusion as it is still reviewing the well data and believes that a decision as to whether or not the Lempuyang prospect can be commercially developed can only be reached after both testing and further drilling.

The partners in Brunei Block L and in the Lempuyang-1 well are Kulczyk Oil Brunei Limited (40%), AED South East Asia Limited (50%) and QAF Brunei Sdn Bhd (10%). Kulczyk Oil also owns an interest in Block M, the other onshore exploration block in Brunei, through KOV Borneo Limited, an indirect wholly-owned subsidiary of Kulczyk Oil, which has a 36% interest in Block M and in each of the Mawar-1 and Markisa-1 wells. 

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 gas producing assets of KUB-Gas consist of 100% interests in four licenses near to the City of Lugansk in the northeast part of Ukraine.

In Syria, KOV holds a direct 75% interest in a production sharing agreement that gives it the right to explore for and produce oil and natural gas from Block 9, a 10,032 square kilometre area in northwest Syria. An agreement was announced on September 6, 2010 which will reduce the direct interest of KOV to 45% subject to fulfilment of certain conditions.

The main shareholder of the Company, Kulczyk Investments S.A., increased its holdings in the Company through participation in the initial public offering of the Company on the Warsaw Stock Exchange in May 2010 and the conversion of a debenture and 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.kulczykoilventures.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 on the Lempuyang-1 well, other wells in Brunei and general exploration activities in Brunei and other statements 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.

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