Kulczyk Oil Spuds First Ukraine Exploration Well

Kulczyk Oil announced that the M-19 well has commenced drilling in Ukraine. M-19 is the first well to be drilled by KUB-Gas since the acquisition by KOV of an effective 70% interest in KUB-Gas in June 2010.

The M-19 well is being drilled in the Makeevskoye license area owned 100% by KUB-Gas. The well, with an initial target depth of 2,100 meters, will evaluate three distinct gas zones identified on 2D seismic, two of which are structurally and stratigraphically independent from the producing Makeevskoye field 1.2 kilometers to the northeast.

Statement by the CEO of Kulczyk Oil Ventures:

"We are pleased to be starting the drilling of our first well in Ukraine only a few months after closing our acquisition. The timely implementation of this first step in our plan to increase the production and reserves of KUB-Gas was made possible by the diligence and teamwork of the technical and operational teams of both KUB-Gas and Kulczyk Oil," said Tim Elliott, the President and Chief Executive Officer of Kulczyk Oil.

On June 11, 2010, Kulczyk Oil completed the acquisition of an effective 70% interest in both KUB-Gas and a 1,000 horsepower drilling rig built in Canada in 2007 which is being used to drill the M-19 well.

During the first five months of 2010 the average gas production from the licenses owned by KUB-Gas was 5.9 million cubic feet per day ("MMcfd") (166 thousand meters per day) and the average selling price was US $6.76 per thousand cubic feet ("Mcf") (US $239.90 per thousand meters).

Assets of Kulczyk Oil

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 kilometer (550,000 acre) area covering onshore and offshore areas in northern Brunei and a 36% working interest in Block M, a 3,011 square kilometer (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 kilometer 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 conversion of a debenture (the "KI Debenture") and owns almost 50% 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.