Kulczyk Oil Spuds Ukraine Olgovskoye Well

- Kulczyk Oil Spuds Ukraine Olgovskoye Well

Thursday, August 04, 2011
Kulczyk Oil Ventures Inc.

Kulczyk Oil Ventures announced that the O-12 well on the Olgovskoye License in Ukraine commenced drilling on August 3, 2011.

O-12 Exploration Well

The O-12 well is located approximately 1.4 kilometers to the northwest of the recently tested O-9 well. The O-12 well will be drilled to a depth of 2,650 meters 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 meters 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 meters 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 August 1, 2011.

The third of the new wells, Olgovskoye-14 ("O-14"), was drilled to a TD of 2,800 meters 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.

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Kulczyk Oil Highlights Testing Ops at Ukraine Well

- Kulczyk Oil Highlights Testing Ops at Ukraine Well

Monday, August 01, 2011
Kulczyk Oil Ventures Inc.

Kulczyk Oil has published in Canada, through SEDAR system, the news release concerning gas tested from second zone at Olgovskoye-9 well in Ukraine and O-8 well update.

The O-9 well is located approximately 1.2 kilometers to the northwest of the O-8 well. O-9 well commenced drilling on March 5th, 2011 and reached a total depth ("TD") of 2,638 meters on April 4th, 2011. The well was primarily designed to test gas-bearing reservoirs in the Middle Bashkirian and further develop the gas production capability of the Olgovskoye Field.

The testing of the O-9 well began in June when a 5.5 meter thick reservoir unit in the Lower Bashkirian at a depth of approximately 2,560 meters (the R37 unit) was perforated. A two-meter section of the R37 unit was perforated and tested over two periods of time. The first test flowed gas at a rate of 1.2 MMcf/d (840 Mcf/d net to KOV) through a 6 mm choke. The second test flowed gas at a stabilized rate of 762 Mcf/d (533 Mcf/d net to KOV) through a 5 mm choke. This new discovery of gas in the Lower Bashkirian was disclosed in the KOV news release dated June 28, 2011 (current report No 35/2011).

The testing of the Middle Bashkirian sandstones, which are the primary target of the O-9 well, commenced on July 22nd, 2011 when two 3 meter zones of one of the potential gas zones in the Middle Bashkirian were perforated from measured depths of 2,304 to 2,307 meters and from 2,309 to 2,312 meters, respectively. These perforated intervals flowed gas at rates ranging between 1.7 MMcf/d (on a 5 mm choke) to 4.4 MMcf/d (on a 9 mm choke) i.e. between 1.19 to 3.08 MMcf/d net to KOV. with a stabilized flow rate of 2.9 MMcf/d on a 7 mm choke (2.03 MMcf/d net to KOV). The tested zone, which is only one of several potential gas producing zones seen in the Middle Bashkirian section in the O-9 well, is expected to commence commercial production at a gross rate of approximately 1.5 MMcf/d (1.1 Mmcf/d net to KOV) prior to the end of the third quarter.

Initially, this well will produce only from the tested Middle Bashkirian zone and gas reserves indicated by the testing of the Lower Bashkirian gas zone described in the June 28, 2011 news release will be available to produce at a later date. O-9 was the second new well drilled in the Olgovskoye field since the Company acquired its interest in KUB-Gas in June 2010 and it is part of a larger development program on the KUB-Gas assets which will continue through 2011 and 2012.

The service rig is now being moved to the Olgovskoye-8 well which was the first new well drilled on KUB-Gas Ukraine licenses since the acquisition by KOV in June 2010. The O-8 well reached a TD of 2,780 meters in early January and encountered multiple potential gas zones. Testing of the O-8 well will commence in a few weeks once the service rig move is completed.

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Tie-In Boosts Kulczyk Oil's Ukraine Gas Production

- Tie-In Boosts Kulczyk Oil's Ukraine Gas Production

Tuesday, July 26, 2011
Kulczyk Oil Ventures Inc.

Kulczyk Oil announced that total gas production on its properties in Ukraine has increased by 70% to more than 10 million cubic feet per day ("MMcf/d") (more than 7 MMcf/d net to KOV), as a result of the tie-in of the M-19 discovery well in the Makeevskoye Field.

Highlights

• M-19 well initial average gas production rate in excess of 5.5 MMcf/d (3.85 MMcf/d net to KOV) since tie-in;
• Projected production rate for the remainder of 2011 from the M-19 well is a minimum of 4 MMcf/d (2.8 MMcf/d net to KOV);
• The tie-in of the M-19 well has increased the gas production by almost 70% from an average of approximately 6 MMcf/d (4.2 MMcf/d net to KOV) for the first six months of 2011 to the current rate of more than 10 MMcf/d (more than 7 MMcf/d net to KOV).

Timothy M. Elliott, the President and Chief Executive Officer of KOV, stated that "we have substantially increased production from our Ukraine assets since closing the acquisition in June 2010 and are very pleased that KUB-Gas is already producing more than 10 MMcf/d before the end of July. We are confident that we will meet or exceed our target of exiting 2011 with a production rate for KUB-Gas of 12 MMcf/d (8.4 MMcf/d net to KOV). KOV will continue with its active development program in the Ukraine during the coming year and we expect to have a number of new locations defined once the 3D seismic surveys recently completed at Makeevskoye and Olgovskoye are processed and interpreted. The successful start-up of gas production from the newly discovered zone in the M-19 well has confirmed the effectiveness of modern seismic interpretation techniques in the identification of new exploration targets".

The M-19 well

The M-19 exploration well was drilled in the second half of 2010 to a total depth of 2,060 metres and tested gas at a rate of approximately 5 MMcf/d in January 2011 before being suspended pending completion of a pipeline to tie the well to the production facilities of KUB-Gas LLC ("KUB-Gas"). The pipeline was completed and all regulatory approvals required for the commercial production of the well were obtained prior to the start of production on July 11, 2011.

Average gas production from the M-19 well was 5.52 MMcf/d (3.86 MMcf/d net to KOV) since the first full day of production on July 11, 2011. It is presently anticipated that production rates from the well will stabilize at a lower rate and average about 4.0 MMcf/d for the remainder of 2011. The successful tie-in of the M-19 well to production facilities has increased total KUB-Gas production from its four producing gas licenses in Ukraine to an average of 10.73 MMcf/d (7.51 MMcf/d net KOV) during the 10 producing days ended July 24th.

The estimated selling price per thousand cubic feet ("Mcf") in the second quarter of 2011 was approximately US $9.00 per Mcf with as estimated netback of US $5.80. The netback during the first quarter of 2011 was US $4.77 per Mcf. The final financial information with respect to the second quarter will be released in mid-August.

The M-19 well was the first well operated by KUB-Gas logged with western logging tools. By comparing the Ukrainian and western logging data over the same formations, the Company is developing a methodology to better understand and analyze existing Ukrainian log data with a view to more effectively evaluating the potential of the area.

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Kulczyk Finds Potential Gas Reservoirs in Olgovskoye Well

- Kulczyk Finds Potential Gas Reservoirs in Olgovskoye Well

Monday, July 18, 2011
Kulczyk Oil Ventures Inc.

Kulczyk Oil Ventures Inc. announced the O-14 well in the Olgovskoye Field, in north-eastern Ukraine, has been cased to total depth ("TD") after encountering eight potential gas bearing reservoirs.

O-14 Exploration Well

The O-14 exploratory well was drilled to a TD of 2,800 metres. The eight potential gas-bearing zones where encountered in the Middle and Lower Bashkirian portions of the well. The well was drilled to further increase the gas production capability of the Olgovskoye Field and was drilled into a separate fault block which had not previously produced gas. Production testing of the O-14 well is expected to commence in late August / early September.

Next Well

The drilling rig will now be moved to a new location at O-12 which lies at the north end of the Olgovskoye license area. The new well is located 500 metres northeast of the O-7 well and 7,000 metres northeast of the recently drilled O-14 location. The O-12 well is designed to test gas-bearing reservoirs in the Muscovian and Middle Bashkirian and to further develop the gas production capability of the Olgovskoye Field. The O-12 well is expected to commence drilling in late July.

Olgovskoye Field

The O-14 well is the third new well drilled on the Olgovskoye license since the Company acquired its 70% interest in KUB-Gas in June 2010 and is part of a larger development program on the KUB-Gas assets through 2011 and 2012.

Kulczyk Oil completed drilling of the Olgovskoye-8 well in early January 2011. This well is expected to be tested and completed later in the third quarter of 2011. The O-8 well was drilled to a TD of 2,780 metres and wireline logging of the open hole identified several potential hydrocarbon-bearing zones. Another well on the Olgovskoye license, the O-9 well, reached its TD of 2,638 metres in mid-April and was cased to total depth as a potential multi-zone gas well. Completion and testing of the O-9 well indicated a gas discovery in a new zone known as the R37 unit.

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.

Through its interest in KUB-Gas, one of the largest private gas producers in the Ukraine, KOV has an effective 70% interest in the Olgovskoye Field.

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 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 70% 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 25% 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. owns almost 50% of the issued common shares. Kulczyk Investments S.A. is an international investment house founded by Polish businessman Dr. Jan Kulczyk.

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Kulczyk Oil Notes Initial Test Results at O-9 Well

- Kulczyk Oil Notes Initial Test Results at O-9 Well

Tuesday, June 28, 2011
Kulczyk Oil Ventures Inc.

Kulczyk Oil updated its activities at the Olgovskoye-9 well.

Highlights 

• a secondary target in the Lower Bashkirian reservoir section (the R37 unit) tested at a maximum rate of 1,200 thousand cubic feet per day ("Mcf/d") of gas through a 6mm choke and a stabilized rate of 762Mcf/d through a 5mm choke
• the successful testing of the R37 unit amounts to a new discovery as no reserves or resources have been previously attributed to the units within the Lower Bashkirian reservoir
• primary targets in the Middle Bashkirian section of the well are now ready for testing

R37 Reservoir Unit Discovery

The testing of the O-9 well started with a 5.5 meter thick reservoir unit in the Lower Bashkirian reservoir at a depth of approximately 2,560 meters(the R37 unit). While the R37 unit was a secondary target, it is interpreted to be present across the Olgovskoye license area. Consequently a successful test has material implications for Kulczyk Oil Ventures Inc. (the "Company" or "KOV")as no reserves or resources are currently attributed to this reservoir unit or other similar Lower Bashkirian units within the Olgovskoye license.

A 2 meter section of the R37 unit was perforated and tested over two periods of time. The first test (Test #1) flowed at a rate of 1,200 Mcf/d of gas through a 6mm choke and during Test #2 the R37 unit flowed at a stabilized rate of 762Mcf/d of gas through a 5mm choke. This is the first time that commercial rates of gas have been produced from the Lower Bashkirian reservoir section lying below the main producing horizons of the Olgovskoye field. The Company currently believes that the Lower Bashkirian reservoir section is composed of more than 7 reservoir units running across the Olgovskoye license area. While the Company believes that generally speaking the units in the Lower Bashkirian reservoir will require some form of stimulation to produce commercial rates of gas, it is notable that the R37 unit flowed commercial rates of gas without any form of stimulation and this successful test opens up a potential new resource base for the Company.

The Company's preliminary internal estimate of new Reserves for the R37 unit zone is more than 4 billion cubic feet ("Bcf"). RPS Energy plc, the Company's independent engineering consulting firm, has not assigned any Reserves or Resources to the Lower Bashkirian reservoir section of the Olgovskoye field area in past reports.

Progress of Testing Operations

The Company will now carry on testing of the primary Middle Bashkirian targets which produce elsewhere in the Olgovskoye Field. Testing will proceed shortly and is expected to be completed by the end of July.

The O-9 Well

The O-9 well is located approximately 1.2 kilometers to the northwest of the O-8 well. The O-9 well commenced drilling on March 5th and reached a total depth ("TD") of 2,638meters on April 4, 2011. The well was designed to test gas-bearing reservoirs in the Middle Bashkirian and further develop the gas production capability of the Olgovskoye Field.

The O-9 well was the second 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. Olgovskoye-8, the first new well drilled, reached a TD of 2,780 meters in early January and encountered numerous gas zones. Testing of the O-8 will commence later in the third quarter after the testing of the O-9 well has been completed.

Dr. Trent Rehill, Vice President Geosciences of KOV stated that "the Company is very pleased with the initial test results of the O-9 well and is excited about the potential for growth in our gas reserves and production from units in the Lower Bashkirian reservoir".

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Kulczyk Oil Commences Drilling at Ukraine Well

- Kulczyk Oil Commences Drilling at Ukraine Well

Monday, May 30, 2011
Kulczyk Oil Ventures Inc.

Kulczyk Oil announced that the O-14 well in the Olgovskoye Field commenced drilling.

O-14 Exploration Well

The O-14 well is located approximately 4 kilometers to the southeast of the O-8 well. The O-14 well will be drilled to a depth of 2,800 metres and is designed to test gas-bearing reservoirs in the Muscovian and Lower Bashkirian and to further develop the gas production capability of the Olgovskoye Field. The drilling of the O-14 well is expected to take approximately 35 days.

The well, which will target a previously untested fault block identified after interpretation of 2D seismic data by the KOV/KUB-Gas technical team, is on trend with the main Olgovskoye producing area. A successful well in this fault block has the potential to substantially increase the current reserves base of the Company in Ukraine. RPS, the Company's independent engineering consulting firm, has assigned Contingent Resources to the 70% effective interest of KOV of 3.2 billion cubic feet ("Bcf") (Low Estimate), 12.3 Bcf (Best Estimate) and 29.1 Bcf (High Estimate) of natural gas to the untested fault block.

The O-14 well is the third 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 programon the KUB-Gas assets through 2011 and 2012.

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