Kulczyk Oil Ventures Inc.: Ukraine-Dual Completions Successful

CALGARY, ALBERTA--(Marketwire - Dec. 21, 2012) - Kulczyk Oil Ventures Inc. (WARSAW:KOV) ("Kulczyk Oil", "KOV" or the "Company"), an international upstream oil and gas exploration and production company, is pleased to announce the successful dual completion of two wells in Ukraine during the fourth quarter of 2012. The wells, Olgovskoye-18 ("O-18") and Makeevskoye-21 ("M-21"), are both operated by KUB-Gas LLC ("KUB-Gas"), a partially-owned subsidiary in which KOV has a 70% effective ownership interest. To the knowledge of KOV these wells are the first to be successfully dual completed in the Ukraine.

HIGHLIGHTS

• The KUB-Gas owned snubbing unit was used to prepare the O-18 well for dual completion and perforate the B3 zone;
• The B3 zone initially tested gas at 0.700 MMcf/d before declining to a relatively low stabilized rate of 0.136 MMcf/d at a flowing pressure of 550 psi;
• The Company will evaluate the pressure information to determine which additional operations (stimulation or compression) can be undertaken in the first quarter 2013 to improve flow;
• The R22 zone in the O-18 well (the original producing zone) is currently producing gas at an average rate of 1.4 MMcf/d;
• The snubbing unit was also used to dually complete the M-21 well in the R21tb zone. The R21tb was perforated and is expected to flow gas at commercial rates after a fracture stimulation currently schedule for the first quarter of 2013;
• Production from two zones in both the O-18 and M-21 wells is expected to commence in the first quarter of 2013.

Olgovskoye-18

The O-18 well reached its original total depth ("TD") of 2,300 metres in early November 2011 and, following analysis of data gathered during drilling, was deepened to 2,650 metres and cased to the new TD as a potential gas producer. Interpretation of wireline logs indicated up to 38.5 metres of gas pay in 7 zones and of these one, the R22 zone, a 4 metre thick Bashkirian sandstone reservoir at a depth of 2,035 metres, was perforated and tested gas at a rate of approximately 1.2 million cubic feet per day ("MMcf/d") through a 5 mm choke in mid-December 2011. The R22 zone was tied-in for commercial production in March 2012.

By utilizing the KUB-Gas owned snubbing unit, the B3 zone, a 13 metre thick Bashkirian sandstone reservoir at a depth of 2,108 metres was perforated without the need to suppress the gas flow from the R22 zone. The B3 zone flowed gas at 0.700 MMcf/d but declined to a stabilized rate of 0.136 MMcf/d through a 3 mm choke after a two hour flow test and was then shut-in for pressure buildup. Analysis of the pressure data will assist in a determination of whether there is damage to the formation or whether a frac is required. In the meantime, wellsite compression is also being considered.

Makeevskoye-21

The M-21 well reached its TD of 2,210 metres in March 2012. It encountered 6 metres of gas pay in a Moscovian sandstone formation called the R8 at a depth of 1,450 metres and a second potential gas zone (the R21tb zone) in rocks of Bashkirian age at a depth of 2,115 metres. This deeper zone, which had not previously been tested in the area, appeared to have approximately 10 metres of potential gas pay based upon interpretation of wireline logs. The R8 zone was tied in for commercial production in August 2012 at an initial rate of 1.7 MMcf/d.

The snubbing unit was used to perforate the well in the R21tb zone so that the well is dually completed in both the R8 and R21tb zone. The R21tb zone, as expected after interpretation of wireline logs and information gathered during the drilling operation, is relatively tight and a frac, expected to occur in the first quarter of 2013, is needed before commercial gas production will be possible from this lower zone.

It is expected that production from two horizons in each of the O-18 and M-21 wells will commence in the first quarter of 2013. The Company is confident that dual completions will be a cost-effective way to improve overall production from the Ukraine assets. The dual completion allows for natural gas production from the two zones at the same time. A dual completion occurs when a wellbore is equipped with tubulars and equipment to enable production from two segregated zones. A snubbing unit is specialized service rig that allows for the work over of wells under pressure without any need to kill an existing producing zone. Stopping the flow from an existing producing zone, especially one that is partially depleted through production, can lead to damage to the producing zone leading to a permanent impairment of its gas producing capability. The snubbing unit was built for KUB-Gas in Canada and imported in to the Ukraine in January 2012. It can be moved in a few truck loads and can be rigged up and ready for operations more quickly than a conventional service rig.

Successful implementation of a program of dual completions will enable KUB-Gas to increase production from existing producing wells. More than 10 additional legacy wells have been identified as potential dual completion candidates and it is anticipated that most of the new wells drilled will be dual completed.

Tim Elliott, President and Chief Executive Officer of KOV stated that:

"The successful use of our snubbing unit to conduct our first dual completions is a significant milestone in our operations and to our knowledge it is a first in Ukraine. While it took some time to train our staff and get the appropriate regulatory approvals, it is great to be able to introduce new technology into the country and get such positive results, and I take this opportunity to thank the KOV/KUB-Gas team for the dedication and hard work and congratulate them on this success. The snubbing unit is a great tool that will allow us to continue to increase production from both existing and future wells."

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.

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.