Kulczyk Oil's Subsidiary Acquires Additional Ukraine License

Kulczyk Oil's 70% owned subsidiary, KUB-Gas, has been awarded another exploration license area in Ukraine.

The North Makeevskoye Exploration License is located adjacent to the KUB-Gas Makeevskoye and Olgovskoye licenses, near the City of Lugansk in eastern Ukraine. Similar to the KUB-Gas Makeevskoye and Olgovskoye licenses which lie along the primary southeastern Dneiper-Donets Basin gas/condensate structural trend, the 19,050 hectare (47,073 acre) North Makeevskoye license area is prospective for gas production from multiple zones within the Muscovian and Bashkirian sedimentary section. The award of this license to KUB-Gas increases their total holdings to five license areas and increases their total area under license by more than 110% to 36,315 hectares (89,736 acres).

Mikhail Afendikov, the Managing Director of Gastek LLC, KOV's 30% partner in KUB-Gas stated that: "We are very pleased to get this new license so close to our M-19 gas discovery."

Tim Elliott, President and Chief Executive Officer of KOV stated that, "Our experience with KUB-Gas and with our partner Gastek has been a very positive one. We will continue to have a very active program in Ukraine as gas production is developed on the KUB-Gas licenses."

The North Makeevskoye Exploration License has a 5-year term effective 29 December 2010. It is located adjacent to the Makeevskoye License and 4 kilometres east of the KUB-Gas M-19 gas discovery which was production tested in late December at 5 million standard cubic feet per day ("MMscf/d") through a 10 mm choke.

KOV and its joint venture partner KUB-Gas will incorporate all available subsurface data at North Makeevskoye into an exploration model similar to that which was successfully constructed for the Makeevskoye and Olgovskoye licenses. This will be followed by the acquisition of a 2D seismic survey over the North Makeevskoye Exploration License in mid-2011. The first wells to be drilled on the new license might be expected in late 2011 or early 2012 depending on results of the 2011 seismic program.