Ukraine: Kulczyk Granted Production License at Olgovskoye

Kulczyk Oil Ventures Inc. has reported that the Ukrainian Ministry of Fuel and Energy has formally acknowledged the conversion of the Olgovskoye License from a five-year exploration license to a 20-year production license.

Under the terms of the new license, production from the Olgovskoye field, operated by KUB-Gas LLC a partially-owned subsidiary in which KOV has a 70% effective ownership interest, is no longer limited.

“The conversion of the license means that the company is no longer obliged to limit output to 10 percent of its reserves,” Kulczyk stated.

The Olgovskoye license is presently the most productive of the five licenses held by KUB-Gas in the Lugansk Oblast of southeast Ukraine. Since KOV acquired its ownership interest in KUB-Gas in June 2010 five new gas wells have been drilled on the Olgovskoye license and one additional well at Olgovskoye-6 , which was drilled prior to June 2010, was fracture stimulated in the fourth quarter of 2011.

The O-6 well was tied-in as a producing gas well in early February 2012 at a rate of 1.5 MMcf/d”, (1.05 MMcf/d net to KOV). Gross production from Olgovskoye is currently 12 MMcf/d to KUB-Gas (8.4 MMcf/d net to KOV), representing approximately 65% of total production from all of the licenses.