Kulczyk Oil Ventures Inc.

Kulczyk Oil Ventures Inc.

September 13, 2010 11:29 ET

Kulczyk Oil Ventures Inc.: Brunei Block M Mawar-1 Well Preliminary Results

CALGARY, ALBERTA--(Marketwire - Sept. 13, 2010) - Kulczyk Oil Ventures Inc. (WARSAW:KOV) ("Kulczyk Oil" or "KOV") provides the following information on the Mawar-1 exploration well. Preliminary interpretation of wireline, pressure and sampling data suggests that natural gas has been encountered in the primary objective (Ridan) while oil has been sampled at deeper levels. Casing is currently being run across the hydrocarbon zones prior to suspending the Mawar-1 well.

Mawar-1 has reached its total depth of 1,292 metres and wireline logging, pressure and fluid sampling has now been completed. Preliminary analysis of these data indicate that the well encountered gas in the primary objective (Ridan Sandstone) and preliminary log analysis suggests Mawar-1 has encountered up to 25 metres of Ridan reservoir at a depth of 1,005 metres. The presence of gas in this interval is indicated by pressure analysis and sampling. 

A deeper secondary objective (Rampayoh Series) also has good hydrocarbon indications in cuttings and sidewall cores in an interbedded sand-shale sequence. Fluid samples have been taken from two depths within this zone. The samples remain sealed for laboratory analysis but indications are that they contain oil. Reservoir quality in the upper part of the Rampayoh Series is unclear and will only be confirmed with further analysis of the well data.

KOV Executive Vice President, Jock Graham, said "Mawar-1 had yielded results somewhat different than expected. We encountered our targets lower than expected which is suggesting that the structure is perhaps more complicated than originally thought. We are also surprised that the primary objective Ridan formation appears to be gas charged at this location. Further studies will be undertaken to determine if there is potential for an oil leg down dip of the gas in Mawar-1. The apparent oil recoveries observed deeper in the well in the pressure and sampling programme was an unexpected result but further investigation will be needed to determine if this has commercial implications in Mawar-1."

The Mawar-1 well will be suspended and the rig will move to the nearby Markisa-1 location which will test the oil potential of a younger reservoir in a separate fault compartment of the Belait Anticline.

The partners in Brunei Block M and in the Mawar-1 well are KOV Borneo Limited (36%), Tap Energy (Borneo) Pty Ltd (39%), China Sino Oil Co. Ltd. (21%) and Jana Corporation Sdn Bhd (4%). KOV Borneo Limited is an indirect wholly-owned subsidiary of Kulczyk Oil. The Mawar-1 exploratory well is the first of a minimum of three wells to be drilled on Block M by Kulczyk Oil and its joint venture partners in Block M during the Phase 1 exploration period ending in August 2011. 

Kulczyk Oil also owns an interest in Block L, the other onshore exploration block in Brunei, through Kulczyk Oil Brunei Limited, an indirect wholly-owned subsidiary of Kulczyk Oil, which has a 40% interest in Block L and in each of the Lukut-1 and Lempuyang-1 wells. The first well, Lukut-1, was drilled on Brunei Block L and suspended in mid-June pending testing by a service rig. A second Block L well, Lempuyang-1, commenced drilling operations on July 15 and is currently drilling. 

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.

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.

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 Mawar-1 well, the Lukut-1 well, the Lempuyang-1 well 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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