Kulczyk Oil Ventures Inc.
WARSAW : KOV

Kulczyk Oil Ventures Inc.

August 04, 2011 09:30 ET

Kulczyk Oil Ventures Inc.: Ukraine -Olgovskoye-12 Well Spuds

CALGARY, ALBERTA--(Marketwire - Aug. 4, 2011) - Kulczyk Oil Ventures Inc. (WARSAW:KOV) ("Kulczyk Oil", "KOV" or the "Company") is pleased to announce that the O-12 well on the Olgovskoye License in Ukraine commenced drilling on 3 August 2011.

O-12 Exploration Well

The O-12 well is located approximately 1.4 kilometres to the northwest of the recently tested O-9 well. The O-12 well will be drilled to a depth of 2,650 metres and is designed to test gas-bearing reservoirs in the Muscovian and Bashkirian sections and to further develop the gas production capability of the Olgovskoye Field. The drilling of the O-12 well is expected to take approximately 40 days.

The well, identified after interpretation of 2D seismic data by the KOV/KUB-Gas technical team, is on trend with the main Olgovskoye producing area and is intended to extend the known boundaries of the Olgovskoye Field. A successful well will increase gas production and lead to additional drilling locations along this trend.

Olgovskoye License

The O-12 well is the fourth new well drilled in the Olgovskoye Field since the Company acquired its interest in KUB-Gas in June 2010. It is part of a larger development program on the KUB-Gas assets through 2011 and 2012 which has involved the drilling of new wells at O-8, O-9 and O-14. The Olgovskoye Field currently produces from 4 wells (O-3, O-4, O-5 and O-7) with each well producing from a separate horizon.

The first of new wells was drilled at the Olgovskoye-8 location and reached a total depth ("TD") of 2,780 metres in early January. Production testing of the O-8 well will begin in August.

The second of the new wells drilled on the Olgovskoye license, the O-9 well, finished drilling at a depth of 2,638 metres in mid-April and was cased to TD as a potential multi-zone gas well. The O-9 was production tested in June and July of this year and the well is expected to begin commercial production at a gross rate of approximately 1.5 million cubic feet per day ("MMcf/d") prior to the end of the third quarter as disclosed in the news release of KOV dated 1 August 2011.

The third of the new wells, Olgovskoye-14 ("O-14"), was drilled to a TD of 2,800 metres and cased to TD after encountering up to eight potential gas-bearing zones in the Middle and Lower Bashkirian sections of the well as disclosed in the news release of KOV dated 18 July 2011. A service rig will be moved to the O-14 location to production test the well after the production testing of the O-8 well is finished.

KUB-Gas LLC ("KUB-Gas") owns a 100% interest in the Olgovskoye license and in four other licenses in the Lugansk area of Ukraine. KOV owns an effective 70% interest in KUB-Gas.

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 50% 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 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 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).

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, Krutogorovskoye, Makeevskoye, North Makeevskoye and Olgovskoye) in Ukraine and to the O-14, O-8, O-9 and O-12 well 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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