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Kulczyk Oil Ventures Inc.: Brunei-Lukut Updip Well Commences Drilling

Jun 20 2013 12:00AM

Marketwire

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CALGARY, ALBERTA -- (Marketwired) -- 06/20/13 -- Kulczyk Oil Ventures Inc. ("Kulczyk Oil", "KOV" or the "Company") (WARSAW: KOV), an international upstream oil and gas exploration and production company, is pleased to announce that the exploratory well on its Lukut Updip prospect on Brunei Block L has commenced drilling. The Lukut Updip-1 ("LKU-1") well is operated by AED Southeast Asia Limited ("AED SEA") an indirect wholly-owned subsidiary of KOV.

Lukut Updip Well

The LKU-1 well, the first exploration well to be drilled during the Brunei Block L Phase 2 drilling campaign, will be drilled as a directional well with a planned measured depth of 2,959 metres and a planned true vertical depth ("TVD") of 2,431 metres. The well will test the potential of a triple junction structure (the "Triple Junction") that has formed where the Belait and Jerudong Anticlines meet with the Simbatang Fault. The primary targets, at a depth of approximately 2,000 metres TVD are deltaic and base slope sand deposits of Middle Miocene age with an anticipated aggregate thickness of up to 250 metres. Overpressure is expected and the Company will use managed pressure drilling ("MPD") techniques for the drilling of LKU-1. The well is expected to take approximately 40 days to drill.

The Triple Junction represents the last stop for basinal hydrocarbon migration. The Prospective Resources which may be trapped in the Triple Junction were estimated by independent reserve engineers RPS Energy Consultants Ltd. ("RPS") in their report dated 12 November 2012. The estimates for the Lukut Updip Prospect, one of four prospect areas included within the Triple Junction, range between a High Estimate of 114 million barrels of oil equivalent ("MMboe") and a Low Estimate of 6 MMboe, with a Best Estimate of 27 MMboe. The estimated Prospective Resources for the Triple Junction are a High Estimate of 355 MMboe and a Low Estimate of 27 MMboe with a Best Estimate of 105 MMboe. These estimated Prospective Resource volumes, which are un-risked and are for the net 90% interest of KOV, would be substantially de-risked by a successful well at LKU-1.

KOV has a 90% interest in the Block L with indirect wholly-owned subsidiary Kulczyk Oil Brunei Limited having a 40% interest and indirect wholly-owned subsidiary AED SEA (operator) having a 50% interest. The remaining 10% interest is owned by a private Brunei company at arm's length to KOV.

Block L is a 1,123 square kilometre exploration and development block covering certain onshore and offshore areas of Brunei. The first two exploration wells, Lempuyang-1 and Lukut-1, were drilled by KOV and its joint venture partners in 2010 in the southern part of Block L. Both wells encountered hydrocarbons. The Lempuyang-1 well tested gas but was abandoned due to downhole operational problems associated with high pressure. Wireline logs of the Lukut-1 well indicated potential gas zones which have not been tested to date.

In June 2012, KOV announced the completion of field operations for its acquisition of 191.8 km2 of 3D, 16.2 km2 of 3D swath and 14 kilometres of 2D seismic on Brunei Block L. The project was completed safely with no lost time accidents. A total of 2.5 million man hours were logged on this project with an average crew size of approximately 1,000 persons. This new seismic information, together with interpretation of approximately 350 square kilometres of 3D data acquired by the Company in 2009 and geological evaluations, helped to define the drilling targets for the LKU-1 well.

Cautionary Statement

There is no certainty that any portion of the Prospective Resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the Prospective Resources.

Defined Terms

"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" 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" 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" 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 ("WSE") 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 a 90% working interest in a production sharing agreement which gives the Company the right to explore for and produce oil and natural gas from Block L, a 1,123 square kilometre area covering onshore and offshore areas in northern 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. KOV declared force majeure, with respect to its operations in Syria, in July 2012.

KOV announced on 25 April that it had entered into an agreement to acquire Winstar Resources Ltd. ("Winstar"), a company with producing and development properties in Tunisia and an exploration block in Romania, subject to the approval of its shareholders. The transaction is expected to close near to the end of June 2013 at which time KOV, while continuing to be listed on the WSE, would list its shares for trading on the TSX.

The main shareholder of the Company is Kulczyk Investments S.A., an international investment house founded by Polish businessman Dr. Jan Kulczyk.

Translation: This news release has been translated into Polish from the English original.

Forward-looking Statements: This release may contain forward-looking statements made as of the date of this announcement with respect to future activities of the Company or any of its subsidiaries and related to its interest in Brunei Block L and to certain wells drilled or to be drilled or seismic activities undertaken within that area that either are not or may not be 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.

Suite 1170, 700-4th Al Shafar Investment Nowogrodzka 18/29Avenue SW, Calgary, Building, Suite 123, 00-511 Warsaw, PolandAlberta, Canada Shaikh Zayed Road, Dubai, Telephone: +48 (22) 414Telephone: +1-403-264- UAE 21 008877 Telephone: +971-4-339- 5212





Contacts:
Kulczyk Oil Ventures Inc. - Canada
Norman W. Holton
Vice Chairman
+1 403 264 8877
nholton@kulczykoil.com

Kulczyk Oil Ventures Inc. - Poland
Jakub J. Korczak
Vice President Investor Relations & Managing Director CEE
+48 22 414 21 00
jkorczak@kulczykoil.com
www.kulczykoil.com





Source: Marketwire


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