Kulczyk Oil Ventures Inc.
WARSAW : KOV

Kulczyk Oil Ventures Inc.

February 07, 2011 18:24 ET

Kulczyk Oil Ventures Inc.: Testing Update at Lempuyang-1 in Brunei Block L - Initial Results

CALGARY, ALBERTA--(Marketwire - Feb. 7, 2011) - Kulczyk Oil Ventures Inc. ("Kulczyk Oil", "KOV", or "the Company")  (WARSAW:KOV) wishes to update the market on the initial results of testing at the Lempuyang-1 well in Brunei, Block L. 

Two main zones of interest with an aggregate gross thickness of 56.4 metres were intersected during the drilling of the Lempuyang-1 well. Testing commenced on the lower of these zones with an aggregate gross thickness of 22 metres and will then proceed to test the upper blue zone. 

The test results to date in the lower zone which indicate high volumes of water being produced are potentially influenced by poor isolation of a higher pressure zone (potentially water) below the test intervals. Forward operations will attempt to determine the source of water production and its potential to mask hydrocarbon in the tested zones. Analysis of the test results are ongoing and it is intended to run a Production Logging Tool (PLT) to assist in determining potential spurious water inflow.

"These are disappointing results from one of two zones of interest at Lempuyang-1, however a more informed assessment of the well can be made only after the testing program is completed" said Jock Graham, Executive Vice President of KOV.

Preliminary data from testing have now been incorporated into the interpretation of the remaining intervals of interest for the well. Following the PLT it is now planned to move to the upper blue zone and undertake flow testing. As previously reported during drilling a high pressure interval was intersected in the blue zone. Testing of the upper zone should be completed by early next week. 

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 participating interest of 100% 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 55% 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., 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 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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