Thursday, Jun 24, 2010
Kulczyk Oil Ventures (WARSAW:KOV) ("KOV", "Kulczyk Oil" or the "Company") announces that preliminary results from analysis of drilling data and interpretation of wire line logs from the Lukut-1 well on Brunei Block L indicates a number of potential hydrocarbon-bearing zones. Consequently, KOV and its joint venture partners (the "JV Partners") have decided to proceed with a testing program.
HIGHLIGHTS
HIGHLIGHTS
-- hydrocarbons intersected over several intervals;
-- a testing program is expected to begin in July dependent upon the
availability of a service rig;
-- the drilling rig will move to Lempuyang-1, approximately 15 kilometres
to the southwest, after it has been released from Lukut-1.
The Lukut-1 well, which commenced drilling on May 2, 2010, had an initial target depth of 2,150 metres. The well was designed to test the hydrocarbon potential of a structural feature defined by 3D seismic shot by KOV and its joint venture partners in 2009.
The well reached the target depth of 2,150 metres on May 31, 2010 and, as elevated gas readings were reported in the drilling mud, the JV Partners elected to deepen the well to 2,230 metres to facilitate assessment of a zone of interest between 2,130 metres and 2,210 metres before carrying out the wire line logging program.
Preliminary analysis of data acquired from the gas logs which evaluated the hydrocarbon content of the drilling fluid during the drilling operation showed a continual increase in gas content with indications of C1 to C5 over the interval from 1,745 metres to 2,230 metres. Gas shows were noted at 1,745 metres, 1,945 metres and from 2,150 metres to 2,185 metres. Elevated gas readings at 2,230 metres led the JV Partners to further extend drilling to 2,366 metres after running a liner to 2,230 metres.
During the drilling of the additional section elevated gas readings were also recorded from 2,295 metres to 2,317 metres but due to hole and drilling conditions this section of the wellbore was not able to be effectively cased. The well was plugged back to 2,230 metres. During the plugging back of the well the cement set up prematurely resulting in a section of tubing being left in the hole. Operations are underway to remove this impediment to the testing of the well. The Nabors 503 drilling rig will be moved off of the location and relocated to the Lempuyang-1 location once the tubing has been removed from the wellbore to allow for the testing of the zones below 2,066 metres.
Further interpretation of drilling results and a petrophysical evaluation of the wire line logs for the entire hole is progressing and will be factored in to the final design of the testing program. A smaller service rig will be sourced to undertake the testing of the well and the testing program is expected to commence in July, 2010.
The well reached the target depth of 2,150 metres on May 31, 2010 and, as elevated gas readings were reported in the drilling mud, the JV Partners elected to deepen the well to 2,230 metres to facilitate assessment of a zone of interest between 2,130 metres and 2,210 metres before carrying out the wire line logging program.
Preliminary analysis of data acquired from the gas logs which evaluated the hydrocarbon content of the drilling fluid during the drilling operation showed a continual increase in gas content with indications of C1 to C5 over the interval from 1,745 metres to 2,230 metres. Gas shows were noted at 1,745 metres, 1,945 metres and from 2,150 metres to 2,185 metres. Elevated gas readings at 2,230 metres led the JV Partners to further extend drilling to 2,366 metres after running a liner to 2,230 metres.
During the drilling of the additional section elevated gas readings were also recorded from 2,295 metres to 2,317 metres but due to hole and drilling conditions this section of the wellbore was not able to be effectively cased. The well was plugged back to 2,230 metres. During the plugging back of the well the cement set up prematurely resulting in a section of tubing being left in the hole. Operations are underway to remove this impediment to the testing of the well. The Nabors 503 drilling rig will be moved off of the location and relocated to the Lempuyang-1 location once the tubing has been removed from the wellbore to allow for the testing of the zones below 2,066 metres.
Further interpretation of drilling results and a petrophysical evaluation of the wire line logs for the entire hole is progressing and will be factored in to the final design of the testing program. A smaller service rig will be sourced to undertake the testing of the well and the testing program is expected to commence in July, 2010.
The partners in Brunei Block L and in the Lukut-1 well are Kulczyk Oil (40%), AED South East Asia Limited (50%) and QAF Brunei Sdn Bhd (10%). The Lukut-1 exploratory well is the first well in a program of a minimum of four wells to be drilled in Brunei by Kulczyk Oil and its joint venture partners in 2010. Two of the wells, Lukut-1 and Lempuyang-1, are located on Block L (KOV 40%) and the two additional wells will be drilled on Block M (KOV 36%) to the south. All four of the wells will evaluate prospects identified by newly-acquired 3D seismic.
Assets of Kulczyk Oil
Kulczyk Oil is an international upstream oil and gas exploration 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 gas producing assets of KUB-Gas consist of 100% interests in four licenses near to the City of Lugansk in the northeast part of Ukraine.
In Syria, KOV holds a direct 75% interest in a production sharing agreement that gives it the right to explore for and produce oil and natural gas from Block 9, a 10,032 square kilometre area in northwest Syria.
The main shareholder of the Company, Kulczyk Investments S.A., increased its holdings in the Company through participation in the initial public offering of the Company on the Warsaw Stock Exchange in May 2010 and the partial conversion of a debenture (the "KI Debenture") and owns approximately 48.55% of the issued common shares as of the date of this news release. Kulczyk Investments S.A. is an international investment house founded by Polish businessman Dr. Jan Kulczyk.
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