CALGARY, ALBERTA -- (Marketwire) -- 03/21/13 -- Kulczyk Oil Ventures Inc. (WARSAW: KOV) ("Kulczyk Oil", "KOV" or the "Company"), an international upstream oil and gas company, is very pleased to announce substantial growth in its Reserves volumes and in the estimated value for its Reserves located in Ukraine.
Total Reserves (3P) were up 84.8% and 2P Reserves were up 30% during 2012 while the NPV of the 2P Reserves increased 58% to $257.5 million when compared to their value at the end of 2011.
The Company's Ukraine assets were evaluated, with an effective date of 31 December 2012, by independent reserve engineers RPS Energy Consultants Ltd. ("RPS") in their report dated 20 March 2013 (the "RPS 2012 Ukraine Report"). Comparisons made to the prior year's report refer to the evaluation of the same assets by RPS, effective as of 31 December 2011, in their report dated 26 March 2012 (the "RPS 2011 Ukraine Report").
All of the Reserve, Prospective Resource and Contingent Resource volumes, as well as the net present values attributed to the Ukraine Reserves disclosed herein, refer to KOV's 70% effective ownership interest in the assets through its 70% indirect ownership in KUB-Gas LLC ("KUB-Gas"), its majority-owned indirect subsidiary, which owns and operates four producing licences (Vergunskoye, Olgovskoye, Makeevskoye and Krutogorovskoye) near the City of Lugansk in northeast Ukraine.
-- Proved (1P) Reserves, after royalties, increased to 23.2 billion cubic feet ("Bcf") of natural gas and 124.1 thousand barrels ("Mbbls") of natural gas liquids ("NGL") compared with 21.7 Bcf and 83.6 Mbbls respectively in the RPS 2011 Ukraine Report, for a total of 3.9 million barrels of oil equivalent ("MMboe"), an increase of 7.8% when compared to 3.7 MMboe at the end of 2011;-- Proved + Probable (2P) Reserves of natural gas, after royalties, increased 30% to 40 Bcf and NGL volumes increase 110% to 299.0 Mbbls compared with 30.8 Bcf and 202.5 Mbbls respectively in the RPS 2011 Ukraine Report, for a total of 6.96 MMboe, an increase of 32.1% when compared to 5.27 MMboe at the end of the prior year;-- Proved + Probable + Possible (3P) Reserves, after royalties, increased almost 85% during 2012, on a boe basis, based on RPS' estimate in the RPS 2012 Ukraine Report of 72.7 Bcf of natural gas and 723.5 Mbbls of NGL (12.85 MMboe), compared with 40.4 Bcf and 213.0 Mbbls of NGL (6.95 MMboe) in the RPS Ukraine 2011 Report;-- Reserve Life Index ("RLI") at year end, is 5.9 years based on 2P Reserves and 10.7 years based on 3P Reserves;-- The net present value of the future net revenue before tax attributable to the Company's Proved + Probable (2P) Reserves in Ukraine increased by more than 58% to US$257.5 million at a discount factor of 10% compared with US$162.8 million in the RPS 2011 Ukraine Report.
Tim Elliott, CEO of Kulczyk Oil, commented:
"2012 was a good year as we continued to reap the rewards of our hard work. While the increase in reserves and production is a direct result of the application of new technology and practices to our producing fields in Ukraine, the single biggest contributor to our increase in reserves has been exploration success. This should be kept in mind as we are about to commence our drilling program in Brunei where individual well targets contain prospective resources significantly larger than our current reserves and resources in Ukraine.