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.
Translation: This news release has been translated into Polish from the English original.
The reserves data for KOV and Winstar set forth in this press release is based upon the following reports which have been prepared by RPS Energy Canada Ltd. ("RPS"), an "independent qualified reserves evaluator" (as such term is defined in National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101")) in accordance with NI 51-101 and the COGE Handbook:
(i) the reserve report dated March 11, 2013 with an effective date of December 31, 2012 prepared by RPS for Winstar, which evaluates the crude oil, natural gas and natural gas liquids reserves of Winstar and its subsidiaries; and
(ii) the reserve report dated March 20, 2013 with an effective date of December 31, 2012 prepared by RPS for KOV, which evaluates the crude oil, natural gas and natural gas liquids reserves and resources of KOV and its subsidiaries.
There are numerous uncertainties inherent in estimating quantities of reserves. The reserve information set out in this press release are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual reserves may be greater than or less than the estimates provided herein.
Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. There is a 90% probability that the quantities actually recovered will equal or exceed the estimated proved reserves. Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. There is a 50% probability that the quantities actually recovered will equal or exceed the estimated proved plus probable reserves. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves. Each of the reserve categories may be divided into developed and undeveloped. All reserves disclosed in this press release have been classified as developed.
Production information is commonly reported in units of barrel of oil equivalent ("boe" or "BOE") or in units of natural gas equivalent ("Mcfe"). However, BOEs or Mcfes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1 bbl, or an Mcfe conversion ratio of 1 bbl:6 Mcf, is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Forward-looking Statements Regarding Acquisition
This press release contains certain statements relating to KOV that are based on the expectations of KOV, as well as assumptions made by, and information currently available to, KOV, which may constitute forward-looking information under applicable securities laws. All such statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results or developments that KOV anticipates or expects may, or will occur in the future (in whole or in part) should be considered forward-looking information. In some cases, forward-looking information can be identified by terms such as "forecast", "future", "may", "will", "expect", "anticipate", "believe", "potential", "enable", "plan", "continue", "contemplate", "pro-forma", or other comparable terminology. In particular, this press release makes reference to the timing and completion of the Acquisition, the issuance of common shares of KOV on the completion of the Acquisition, the expected completion of the Acquisition, including the ability of the Company to satisfy all necessary conditions to the closing of the Acquisition, the anticipated benefits of the Acquisition, reserve volumes associated with the properties to be acquired by KOV, expected production from the properties to be acquired pursuant to the Acquisition, timing of exploration and production activities, the number of shares held by the former shareholders of Winstar upon completion of the Acquisition and the timing of the Winstar and KOV shareholder meetings. Readers are cautioned that there is no assurance that the transactions referenced herein will proceed. Certain conditions must be met before the Acquisition can be completed.
Such conditions include the receipt of all necessary regulatory approvals, including the Tunisian Approval (as such term is defined in the Arrangement Agreement), the approval of the listing of the shares of KOV on the TSX (subject only to the filing of documentation that cannot be filed prior to the effective date), such that the shares of KOV shall be listed and posted for trading on the TSX as soon as is reasonably practicable following the effective date in accordance with TSX policies, the approval of the plan of arrangement by the Winstar shareholders and the approval of the name change and share consolidation by KOV shareholders. There is no assurance that the required approvals will be received and all of the conditions to the completion satisfied and there is therefore no assurance that the Acquisition completed in the time frame anticipated or at all. Many factors could cause the performance or achievement by KOV to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. These factors include the failure to obtain the required approvals, including requisite Winstar and KOV shareholder approvals and the approval of the TSX of the listing of the shares of KOV, risks relating to the integration of KOV and Winstar, the failure to realize anticipated synergies and incorrect assessments of the value of Winstar. Readers are cautioned that the foregoing list of factors is not exhaustive. Statements relating to "reserves" or "resources" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described can be profitably produced in the future.
The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. KOV is not under any duty to update any of the forward-looking statements after the date of this press release or to conform such statements to actual results or to changes in KOV's expectations and KOV disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.
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
For further information, please refer to the KOV website (www.kulczykoil.com).
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
Pelham Bell Pottinger - London
Nick Lambert / Rollo Crichton-Stuart / Charles Stewart
+44 20 7861 3232