Kulczyk Oil Ventures Inc.
WARSAW : KOV

Kulczyk Oil Ventures Inc.

June 26, 2012 07:54 ET

Kulczyk Oil Ventures Inc.: Brunei Block L Seismic

CALGARY, ALBERTA--(Marketwire - June 26, 2012) - Kulczyk Oil Ventures Inc. (WARSAW:KOV) ("Kulczyk Oil", "KOV" or the "Company"), an international upstream oil and gas exploration and production company, is pleased to announce the completion of field operations for its acquisition of 191.8 km2 of 3D, 16.2 km2 of 3D swath and 14 kilometres of 2D seismic on Brunei Block L. The program started with the acquisition of the first 2D line in late December 2011 and the final portion of the 3D acquisition program was completed on 29 May 2012. Site restoration was completed on the 18 of June. The project was completed safely with no lost time accidents. A total of 2.5 million man hours were logged on this project with an average crew size of approximately 1,000 persons.

The program involved the acquisition of 145.4 km2 of 3D seismic in the Jerudong area in the central part of Block L with an additional 46.4 km2 of 3D acquired in the area updip from and to the northeast of the Lukut-1 well drilled in 2010. Processing of the acquired data is expected to be completed by the end of July and a preliminary interpretation is expected to be done by early September. The program was operated by AED Southeast Asia Limited ("AED SEA"), an indirect wholly-owned subsidiary of KOV.

Block L is a 1,110 square kilometre (275,000 acre) exploration and development block covering certain onshore and offshore areas of Brunei. The first two exploration wells drilled by KOV and its joint venture partners were Lempuyang-1 and Lukut-1 located in the southern part of Block L. Both wells encountered hydrocarbons. The Lempuyang-1 well tested gas but was suspended due to downhole operational problems associated with high pressure. Wireline logs of the Lukut-1 well indicated potential gas zones which have not been tested to date. Two additional exploration wells are expected to be drilled prior to the end of the Phase 2 exploration period of the Block L PSA on 27 August 2013.

Jock Graham, Executive Vice President of KOV, commented:

"We are pleased that we were able to successfully complete this large and challenging onshore operation without any lost time incidents. At times the Company had over 1000 people working in rough terrain, at all times of the day and night, and it is therefore extremely satisfying to know that we were able to safely complete this project without harm or injury to the field crews. It is a credit to all involved that we achieved this remarkable feat. We are also grateful for the support and goodwill of various Brunei government agencies and for the cooperation of the local communities in the survey areas.

The newly acquired data will now be processed with a target to have a complete integrated interpretation completed by September, thereby allowing the Company to finalize drilling targets for the upcoming 2-well drilling campaign."

With the closing of the acquisition of all of the shares of AED SEA in December 2011, KOV now holds a 90% interest in the Block L PSA with indirect wholly-owned subsidiary Kulczyk Oil Brunei Limited having a 40% interest and indirect wholly-owned subsidiary AED SEA having a 50% interest. The remaining 10% interest is owned by a private Brunei company at arm's length to KOV.

In addition to its interest in Block L, KOV through an indirect wholly-owned subsidiary owns a 36% interest in a production sharing agreement which gives it the right to explore for and, subject to the approval of a development plan, produce oil and natural gas from Block M in Brunei. Block M is a 1,505 square kilometre (372,000 acre) exploration and development block covering an onshore area of Brunei immediately to the south of Block L.

About Kulczyk Oil

Kulczyk Oil is an international upstream oil and gas exploration 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 Kulczyk Oil 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 fulfilment 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% in 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 (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 KOV and certain of its wholly-owned subsidiaries on Block L and Block M in Brunei 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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