Kulczyk Oil Ventures Inc.: Ukraine-Makeevskoye-16 Deep Well Commences Drilling

CALGARY, ALBERTA--(Marketwire - Aug. 8, 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 advise that the Makeevskoye-16 ("M-16") well in Ukraine has commenced drilling. The spud of the M-16 well, which is being drilled as part of the accelerated 2012 drilling program, marks the first time that the Company has had two drilling rigs operating simultaneously on its Ukraine properties. The M-16 well, is operated by KUB-Gas LLC ("KUB-Gas"), a subsidiary in which KOV has a 70% effective ownership interest, and will be the deepest well drilled to date by KUB-Gas.

Makeevskoye-16

The M-16 well has a projected total depth ("TD") of 3,850 metres and is expected to take approximately 90 days to reach TD. The well will target a prospect with multiple potential reservoir units in sediments of Carboniferous age. The upper portion will be an appraisal well targeting a structure defined by 3D seismic with stacked reservoir units in the Bashkirian and Upper Serpukhovian that tested natural gas elsewhere within the Makeevskoye field. The deeper portion will be an exploration well crossing a fault to test a deep structure on a downthrown fault block to evaluate the hydrocarbon potential of deeper formations in the Lower Serpukhovian and potentially in the Visean. A discovery in these deeper sediments would open up new opportunities for reserve and production growth. The M-16 well is located 6.7 kilometres to the northwest of the Makeevskoye-21 well which was drilled and cased as a potential gas producer in the first quarter of 2012 and put on production at an initial rate of 1.7 million cubic feet per day ("MMcf/d") (1.2 MMcf/d net to KOV) in early August, 2012.

Contingent Resources of natural gas (net to the 70% interest of KOV) for the Bashkirian and Upper Serpukhovian zones underlying the M-16 location, as evaluated by the Company's third party engineering consultants and as arithmetically totalled by the Company, range between a Low Estimate (1C) of 9 billion cubic feet ("Bcf") and a High Estimate (3C) of 92 Bcf with a Best Estimate (2C) of 38 Bcf when rounded to the nearest Bcf.

In addition, Prospective Resources of natural gas (net to the 70% interest of KOV) for the Lower Serpukhovian zone in the M-16 prospect, as evaluated by the Company's third party engineering consultants and as arithmetically totalled by the Company, range between a Low Estimate (1C) of 11 Bcf and a High Estimate (3C) of 94 Bcf with a Best Estimate (2C) of 41 Bcf when rounded to the nearest Bcf.

Jock Graham, Executive Vice President of the Company says: "The contracting of a second drilling rig to accelerate the 2012 drilling program is a reflection of the Company's optimism regarding the potential upside in our business in Ukraine. In particular the M-16 well, with a target depth of 3,850 metres, will be the deepest well drilled to date by KUB-Gas. The M-16 well is an exciting well which will test a new structure and new target horizons. It will not only be targeting formations that are currently producing within the Makeevskoye field but will also target deeper formations, which have not been produced from the Company's license areas, potentially opening up new opportunities for reserve and production growth."

On 26 June 2012 KOV announced that KUB-Gas would drill the M-16 well using Ukrburservice Rig#1, a 2,000 horsepower National Oilwell Varco ("NOV") drilling rig manufactured in Canada in 2010. Ukrburservice Rig#1 has a lifting capacity of 450 metric tonnes and a depth rating of 7,000 metres. The KUB-Gas owned NOV rig, manufactured in Canada in 2007 with a lifting capacity of 200 metric tonnes and a depth rating of 3,050 metres, is currently on the Makeevskoye-20 location preparing to test the R8 zone prior to moving to the Krutogorovskoye-7 location in late August.

Defined Terms

"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.

"Prospective Resources" are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective Resources have both an associated chance of discovery and a chance of development. Prospective Resources are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be sub-classified based on project maturity.

"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.

About Kulczyk Oil

Kulczyk Oil is an international upstream oil and gas exploration and production 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 the Company 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 the satisfaction 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% 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 KUB-Gas and related to its licence areas in Ukraine and to certain wells drilled within those licence areas 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.