Kulczyk Oil Ventures Inc.
WARSAW : KOV

Kulczyk Oil Ventures Inc.

February 10, 2011 15:22 ET

Kulczyk Oil Ventures Inc.: Ukraine -Contingent Resources Increased By Over 400%

CALGARY, ALBERTA--(Marketwire - Feb. 10, 2011) - Kulczyk Oil Ventures Inc. (WARSAW:KOV) ("Kulczyk Oil", "KOV" or the "Company") is pleased to announce a substantial increase in the Contingent Resources attributable to the Company's 70% interest in KUB-Gas LLC ("KUB-Gas").

HIGHLIGHTS



-- Total Net Best Estimate Contingent Resource increased by 434 percent
from 14.6 Billion Cubic Feet ("BCF") of natural gas to 77.9 BCF or 13.0
million barrels of oil equivalent ("MMboe");
-- Total Net High Estimate Contingent Resource to 211.5 BCF or 35.2 MMboe.


RPS Report

RPS Energy ("RPS"), a division of RPS Group Plc., an independent engineering consulting company specializing in the assessment of oil and gas assets, have prepared a report (the "RPS Report") which evaluated the Reserves for the Olgovskoye, Makeevskoye, Vergunskoye and Krutogorovskoye fields in the Ukraine (the "Fields") and provided their estimate of the volumes of Contingent Resources associated with the Olgovskoye and Makeevskoye licenses of KUB-Gas effective as of January 1, 2011. The Reserves were the subject of both an earlier report prepared for the Company by RPS with an effective date of April 1, 2009 and a review of that report with an effective date of October 1, 2010. The Contingent Resources were the subject of an amending letter to the April 1, 2009 report provided to the Company by RPS in November 2009 and disclosed in the prospectus of the Company associated with its listing on the Warsaw Stock Exchange in May 2010. The RPS Report, is prepared in accordance with the guidelines of Canadian National Policy 51-101 and incorporates all information available as of December 31, 2010.

A summary of the RPS update of the Contingent Resources, net to the 70% interest of KOV, for the Olgovskoye and Makeevskoye Fields as at the 1st of January 2011, before royalty and tax calculations, is:



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CONTINGENT RESOURCES
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Resources Category BCF MMBOE
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Low Estimate (1C) 17.1 2.9
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Best Estimate (2C) 77.9 13.0
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High Estimate (3C) 211.5 35.2
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To convert Contingent Resources to Reserves in the future, a firm development plan will be required and the nature of the plan will determine the expected gas recovery. Since the issue of the previous RPS report, there have been minor alterations in the Reserves allocated to the Fields due to a slight modification of the RPS evaluation methodology:



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RESERVES
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Reserves Category October 2010 January 2011
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BCFE MMBOE BCFE MMBOE
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Total Proved (1P) 33.9 5.6 29.6 4.9
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Total Proved + Probable (2P) 43.9 7.3 45.7 7.6
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Total Proved+ Probable + Possible (3P) 53.4 8.9 62.0 10.3
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Remaining Upside

Future growth in Reserves will come from development of the Contingent Resources defined at Olgovskoye and Makeevskoye and by further development of all of the Fields. There is also potential for additional volumes of Contingent Resources associated with the Vergunskoye and Krutogorovskoye fields. Additionally, the RPS Report does not take in to account the application of new field operating practices commonly used elsewhere in the world to improve overall well productivity, such as dual completions and compression of gas, which the Company intends to apply to the Fields. With regard to further upside, the RPS Report specifically acknowledges that there are additional gas resources located in conventional but relatively tight reservoirs which should produce commercially after fracturing, but which will not be catagorized as Reserves until the Company demonstrates that this procedure will work on the Fields.

Kulczyk Oil is very pleased with the results of work done on the KUB-Gas assets since their acquisition in June. KOV announced the results from the M-19 gas discovery in the Makeevskoye Field on January 10th and the acquisition of an additional license at North Makeevskoye on January 13th. The work program for 2011 will principally target a continuation of the comprehensive and efficient exploitation of the Olgovskoye and Makeevskoye Fields. This will involve the drilling of new wells, the completion of new zones in existing wells, dual completions, stimulation treatments using modern and technically advanced methods commonly used elsewhere in the world and the effective implementation of a compression strategy.

Defined Terms

"Reserves" are those quantities of petroleum anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions. Reserves must further satisfy four criteria: they must be discovered, recoverable, commercial and remaining (as of the evaluation date) based on the development project(s) applied. Reserves are further categorized in accordance with the level of certainty associated with the estimates and may be sub-classified based on project maturity and/or characterized by development and production status.

"Proved Reserves" are those quantities of petroleum, which by analysis of geosciences and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods and government regulations.

"Probable Reserves" are those additional Reserves which analysis of geosciences and engineering data indicate are less likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves.

"Possible Reserves" are those additional Reserves which analysis of geosciences and engineering data indicate are less likely to be recoverable than Probable Reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible Reserves.

"Contingent Resources" are those quantities of petroleum that are estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development,, but which are not yet considered mature enough for commercial development because of one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets. Contingent Resources are further categorized into Low Estimate (1C), Best Estimate (2C) and High Estimate (3C) according to the level of certainty associated with the estimates and may be sub-classified based on economic viability.

"Low Estimate (1C)" is considered to be a conservative estimate of the quantity that will actually be recovered. It is likely that the actual remaining quantities recovered will exceed the low estimate. If probabilistic methods are used, there should be at least a 90 percent probability (P90) that the quantities recovered will equal or exceed the low estimate.

"Best Estimate (2C)" is considered to be the best estimate of the quantity that will actually be recovered. It is likely that the actual remaining quantities recovered will be greater or less than the best estimate. If probabilistic methods are used, there should be a 50 percent probability (P50) that the quantities recovered will equal or exceed the best estimate.

"High Estimate (3C)" is considered to be an optimistic estimate of the quantity that will actually be recovered. It is unlikely that the actual remaining quantities recovered will exceed the high estimate. If probabilistic methods are used, there should be at least a 10 percent probability (P10) that the quantities recovered will equal or exceed the high estimate.

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 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.

For further information, please refer to the Kulczyk Oil website (www.kulczykoil.com) or contact Norman W. Holton or Jakub Korczak.

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 KUB-Gas and related to its five license areas (Vergunskoye, Krutogoroskoye, Makeevskoye, North Makeevskoye and Olgovskoye) in Ukraine 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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