Kulczyk Oil Ramps Up Production at Ukranian Assets
Kulczyk Oil reported on the continued growth of gas production from its partially-owned subsidiary in Ukraine.
- Gas production from the assets of KUB-Gas LLC ("KUB-Gas") in which KOV has a 70% effective working interest, is now more than 12 million cubic feet per day ("MMcf/d") (8.4 MMcf/d net KOV);
- The Olgovskoye-9 ("O-9") well has been completed as a gas producer and is currently producing at a rate of 2 MMcf/d;
- The Olgovskoye-12 ("O-12") well drilled and cased to total depth ("TD") as a potential gas producer. Testing is underway and is expected to be completed next week;
With the completion and tie-in of the O-9 well, total production attributable to KUB-Gas is now more than 12 MMcf/d (8.4 MMcf/d net to KOV). This represents an increase of 150% over the production rate at the time of its acquisition by KOV in June 2010, and a 100% increase over the average production rate for the second quarter of 2011.
The O-9 well reached a TD of 2,638 meters on 4 April 2011. Testing was completed in July 2011 with rates of up to 4.4 MMcf/d on a 9 mm choke with a stabilized rate of 2.9 MMcf/d (2.0 MMcf/d net to KOV) through a 7 mm choke as disclosed in the KOV press release dated 1 August 2011. The O-9 well was recently put on production after the construction of a pipeline and current production is approximately 2 MMcf/d.
The O-12 well is the fourth new well drilled in the Olgovskoye Field since the Company acquired its interest in KUB-Gas in June 2010. It is part of a larger development program on the KUB-Gas assets planned through 2011 and 2012. The well was spud on 3 August 2011 and reached its TD of 2,700 meters on September 8, 2011 before being wireline logged and cased to TD as a potential gas producer. Testing of potential gas zones identified from interpretation of the wireline logs is underway. Results of the O-12 testing program will be announced once the testing has been completed.
KUB-Gas owns a 100% interest in the Olgovskoye, Makeevskoye and North Makeevskoye, Krutogorovskoye and Vergunskoye licenses in the Lugansk area of Ukraine. KOV owns an effective 70% interest in KUB-Gas.
Tim Elliott, President and Chief Executive Officer of KOV commented, "We are delighted to announce increased gas production from our Ukrainian assets. In particular the M-19 and O-9 wells have been an important success and we look forward to reporting the results of our testing program on the O-12 well soon.
"Overall, the continued growth in production demonstrates our ability to grow the business organically and provide a consistent return on our investment. Our success is also a testament to the technical and operational capabilities of the KOV team. In conjunction with our partners, we have proved our ability to successfully develop complicated assets in a cost effective manner."