CALGARY, ALBERTA — (Marketwire) — 10/17/11 — Kulczyk Oil Ventures Inc. (“Kulczyk Oil”, “KOV” or “the Company”) (WARSAW: KOV) announces that Loon Latakia Limited (“Loon Latakia”), an indirect wholly-owned subsidiary of KOV, has suspended current operations in Syria. As a result of KOV suspending its exploration activities in Syria, the drilling of the Itheria-1 well, the first exploration well being drilled by the Company and its joint venture partners on Syria Block 9, has been suspended at a depth of 2,072 metres.
The original planned target depth of the Itheria-1 well was 3,256 metres. The well was designed to evaluate multiple zones within a large structure with four-way dip closure defined by 3D seismic in an area approximately 200 kilometres due east of the City of Latakia. The Affendi Sandstone of Ordovician age, the first objective encountered, was penetrated at a depth of approximately 1,470 metres and did not have sufficient porosity or permeability to be a potential reservoir. Two other potential reservoirs, the Ordovician Khanasser Sandstone and the Middle Cambrian Burj Carbonate are expected to occur below the suspended depth. The geological and petrophysical information obtained thus far at Itheria will now be assessed to review the prospectivity of the deeper objectives in Itheria and in the nearby Bashaer prospect. The need to assess, together with an increasingly more difficult operating environment, has resulted in a suspension of exploration activity.
As a result of the current operating conditions in the country, KOV requested an extension of the first exploration period under the Block 9 Production Sharing Contract (“Block 9 PSC”) which was refused. The Block 9 PSC remains in effect and discussions with the Syrian government authorities concerning Block 9 are continuing. In the meantime, KOV will continue to monitor operating conditions in Syria to assess when, and if, a recommencement of its Syrian operations is possible.
Loon Latakia holds a participating interest of 50% in the Block 9 PSC which provides the right to explore for and, upon fulfilment of certain conditions, to produce oil and gas from Block 9, a 10,032 square kilometre (2.48 million acre) area in northwest Syria.
For further information, please refer to the Kulczyk Oil website ()
Assets of Kulczyk Oil
Kulczyk Oil is an international upstream oil and gas exploration and production 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 to 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 50% in the Syria Block 9 production sharing contract which provides the right to explore for and, upon fulfilment 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 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
The main shareholder of the Company, Kulczyk Investments S.A. owns approximately 47.6% of the issued common shares. Kulczyk Investments S.A. is 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 on Syria Block 9, the drilling of the Itheria-1 well and general exploration activities in Syria and other statements that are not historical facts. Although the Company believes that its expectations reflected in the forward-looking statements are reasonable as of the date hereof, any draft 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.
Contacts:
Kulczyk Oil Ventures Inc. – Canada
Norman W. Holton
Vice Chairman
+1403 264-8877
Kulczyk Oil Ventures Inc. – Poland
Jakub J. Korczak
Vice President Investor Relations & Managing Director CEE
+48 22 414 21 00