S5 Lower Zone
The second test, of the lower part of the S5 zone, perforated a sandstone interval from 3,364 to 3,370 metres and produced gas on test at a maximum stabilized rate of 4.3 MMcf/d through an 8 millimetre ("mm") choke at a flowing tubing head pressure ("FTHP") of 1,900 pound-force per square inch gauge ("psig"). The well was tested using various choke sizes achieving a stable rate of 2.5 MMcf/d at a FTHP of 2,800 psig through a 5 mm choke, an unstable rate of 3.3 MMcf/d at a FTHP of 2,700 psig through a 6 mm choke and a stable flow rate of 3.8 MMcf/d at a FTHP of 2,200 psig through a 7 mm choke.
The testing of the S5 zone involved a total flow period of 74 hours after which the well was shut in for 169 hours. The initial shut in bottom hole pressure was 34.071 kPa (4,940 psig) and the final measured bottom hole pressure was 33,985 kPa (4,928 psig). The pressure was still building at the end of the shut-in period and the Company believes that an extrapolation of the pressure build-up will indicate no depletion of pressure.
It is anticipated that the well will be tied into a nearby flow line which will take the gas to the Makeevskoye facility. First production is expected late in the second quarter of 2013.
The information obtained from the drilling and wireline logging of the M-16 well, together with the seismic data acquired previously over the Makeevskoye Licence, indicates potential for at least three other well locations to fully develop the new S5 gas pool discovered with the drilling of the M-16 well. Additional wells will be needed to explore some of the new drillable prospects which have been identified based on the success of the S5 zone and to fully develop some of the other zones identified as potential gas reservoirs in the M-16 well.
Jock Graham, Executive Vice President of the Company says:
"The successful test in the S5 zone, our first in the Serpukhovian section, is very exciting for KOV. We expect that development of the deep Serpukhovian reservoirs will add to both our reserves and production base over time. This new gas discovery has opened up new opportunities and targets elsewhere in our licences, providing an additional path to continued reserve and production growth."
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 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.
The main shareholder of the Company is Kulczyk Investments S.A., 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 may contain forward-looking statements made as of the date of this announcement with respect to future activities of KUB-Gas and related to its five licence areas in Ukraine and to certain wells drilled or seismic activities undertaken within those licence areas 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.
CanadaSuite 1170, 700-4th Avenue S.W., Calgary, Alberta, CanadaTelephone: +1-403-264-8877Facsimile: +1-403-264-8861DubaiAl Shafar Investment Building, Suite 123, Shaikh Zayed Road,Box 37174, Dubai, United Arab EmiratesTelephone: +971-4-339-5212Facsimile: +971-4-339-5174PolandNowogrodzka 18/2900-511 Warsaw, PolandTelephone: +48 (22) 414 21 00
Kulczyk Oil Ventures Inc. - Canada
Norman W. Holton
Kulczyk Oil Ventures Inc. - Poland
Jakub J. Korczak
Vice President Investor Relations & Managing Director CEE
+48 22 414 21 00