Kulczyk Oil Ventures - why look at Warsaw?

Sunday, Dec 05 2010 by
10
Kulczyk Oil Ventures  why look at Warsaw
The overwhelming majority of the Oil and Gas companies discussed on Stockopedia are listed in the UK and, to a lesser extent, Canada. As noted by several posters, there are plenty of other markets, and other companies, which might be worth a look. This post covers one of them, Warsaw-listed Kulcyzk Oil Ventures, KOV.PW
 
Why on earth am I bothering about a company on the Warsaw Exchange? For historical reasons. KOV is one of two companies spun out of Loon Energy, which formerly listed, as LEY.V, on the Toronto Venture exchange. I bought a small stake in Loon because of its interests in Syria and Brunei. It also had a very small operation in Colombia. Its largest shareholder, Dr. Jan Kulczyk, a widely-diversified millionaire once said to be the richest man in Poland, prompted its division into two separate companies, KOV, which eventually listed, after a considerable delay, in Warsaw in May this year, and a new Loon Energy Corporation in Toronto, with the symbol LNE.V.
 
After the division, LNE.V took the Colombian interests, and Kulczyk Oil Ventures the Syria and Brunei interests. I chose not to accept a miserly offer from Dr. Kulczyk for my shares in LEY.V, leaving me with legacy holdings (way under water) in both KOV.PW and LNE.V, to wait and see what would happen. The main attraction remained the Brunei interests (though LNE.V has done okay over the last few months).
 
For updates on LNE.V, see the website  or the S'pedia Colombia board. KOV has subsequently acquired acreage, and a small amount of production in Ukraine, to provide it with some cash flow. 
You can read the latest news from KOV here. There are plans for testing of its Lempuyang-1 and Lukut-1 wells in Brunei, " following encouraging indications during the drilling and from the interpretation of wireline logs from both wells". An aero-gravity survey over Block L and a 3D seismic survey over the Belait North structure in Block M,  both completed and interpretation under way. The latest presentation is here.
 

Here's a quick summary of the assets:

BRUNEI

  • Four wells drilled this year, two on each block.
Block L: (KOV: 40 per cent)
 
  • Lukut-1: Ten zones of interest identified during drilling, with up to three to be tested early next year. Aggregate…

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Disclaimer:  

The author may hold shares in this company. All opinions are his own. You should check any statements that appear factual and seek independent professional advice before making any investment decision.


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59 Comments on this Article show/hide all

ManSiarad 28th Jun '11 40 of 59
2

Flow test from the O-9 well in Ukraine, proving up reserves for the first time in the Lower Bashkirian reservoir. Primary targets in the Middle Bashkirian to be tested next.

http://www.marketwire.com/press-release/kulczyk-oil-ventures-inc-ukraine-new-zone-gas-discovery-at-olgovskoye-9-warsaw-kov-1532091.htm

 

Now to see whether they will spud their Syria well, Itheria-1, next month, as planned. Not much sign of unrest in the general area of Block 9 subsiding, as far as I can see

 

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kfahoo 22nd Jul '11 41 of 59
2

http://demo.e-pap.pl/espi?plik=dane/20110722/20110722_124800_0000180515.xml&xsl=depesza3.xsl&id=hyxq68qa41#start

The Management of KULCZYK OIL VENTURES
INC. (“Kulczyk Oil”, “KOV”) hereby informs that it has published the
news release concerning the spud of Itheria-1, the first exploration
well being drilled by KOV and its joint venture partners on Block 9,
Syria, filed with the SEDAR system in Canada.


The planned total depth of the well is 3,256 metres and it is expected
to take 80 days to drill, on a dry hole basis. The well will test a
large structure with four-way dip closure defined by 3D seismic in an
area approximately 200 kilometres due east of the City of Latakia.
Primary targets are sandstones of Ordivician age.

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ManSiarad 31st Jul '11 42 of 59
1

 

  
 
An update on recent news from the Ukraine, all of which looks fairly positive, albeit small-scale.
 
The late July spud of the Itheria-1 exploration well in Syria already posted - see above
 
18th July
 
O-14 Exploration Well

The O-14 exploratory well was drilled to a TD of 2,800 metres. The eight potential gas-bearing zones where encountered in the Middle and Lower Bashkirian portions of the well.  The well was drilled to further increase the gas production capability of the Olgovskoye Field and was drilled into a separate fault block which had not previously produced gas.  Production testing of the O-14 well is expected to commence in late August / early September.
 
Next Well

The drilling rig will now be moved to a new location at O-12 which lies at the north end of the Olgovskoye license area.  The new well is located 500 metres northeast of the O-7 well and 7,000 metres northeast of the recently drilled O-14 location.  The O-12 well is designed to test gas-bearing reservoirs in the Muscovian and Middle Bashkirian and to further develop the gas production capability of the Olgovskoye Field.  The O-12 well is expected to commence drilling in late July.


The O-14 well is the third new well drilled on the Olgovskoye license since the Company acquired its 70% interest in KUB-Gas in June 2010 and is part of a larger development program on the KUB-Gas assets through 2011 and 2012.

Kulczyk Oil completed drilling of the Olgovskoye-8 well in early January 2011. This well is expected to be tested and completed later in the third quarter of 2011. The O-8 well was drilled to a TD of 2,780 metres and wireline logging of the open hole identified several potential hydrocarbon-bearing zones. Another well on the Olgovskoye license, the O-9 well, reached its TD of 2,638 metres in mid-April and was cased to total depth as a potential multi-zone gas well.  Completion and testing of the O-9 well indicated a gas discovery in a new zone known as the R37 unit.

The Olgovskoye Field currently produces from 4 wells (O-3, O-4, O-5 and O-7) with each well producing from a separate horizon.  

Through its interest in KUB-Gas, one of the largest private gas producers in the Ukraine, KOV has an effective 70% interest in the Olgovskoye Field.
 
 
and the M-19 well in the Makeevskoye field has been tied in
 
 
26th July:
 

Kulczyk Oil Ventures Inc. (“Kulczyk Oil”, “KOV” or the “Company”) is pleased to announce that total gas production on its properties in Ukraine has increased by 70% to more than 10 million cubic feet per day (“MMcf/d”) (more than 7 MMcf/d net to KOV), as a result of the tie-in of the M-19 discovery well in the Makeevskoye Field. 

Highlights

  • M-19 well initial average gas production rate in excess of 5.5 MMcf/d (3.85 MMcf/d net to KOV) since tie-in;
  • Projected production rate for the remainder of 2011 from the M-19 well is a minimum of 4 MMcf/d (2.8 MMcf/d net to KOV);
  • The tie-in of the M-19 well has increased the gas production by almost 70% from an average of approximately 6 MMcf/d (4.2 MMcf/d net to KOV) for the first six months of 2011 to the current rate of more than 10 MMcf/d (more than 7 MMcf/d net to KOV).
  
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ManSiarad 31st Jul '11 43 of 59

further to #39 (22nd June), some more press comment in Nigeria today about NNPC flexing their muscles over the disposals by Shell, including OML42, to the consortium involving Kulczyk:

http://www.thisdaylive.com/articles/billions-at-risk-as-shell-bidders-face-losses/96025/

 

The attempt by Shell Petroleum Development Company to sell four of its onshore oil blocks may hit the rocks and could cost bidders billions of naira in non-refundable deposits, as some of the companies that won the bids have grave concerns over their inability to operate the blocks. 

Their reluctance to close the deals, is a fall out  from the decision by the Nigerian National Petroleum Corporation not to assign operatorship of the blocks to the companies that won the bids.

Shell is the operator of the Nigerian National Petroleum Corporation (55per cent); Shell (30per cent); Total Exploration Nigeria Limited (10per cent); and Nigeria Agip Oil Company (5per cent) joint venture.

Shell, in conjunction with its multinational oil partners, had tendered four of its oil fields - Oil Mining Leases 30, 34, 40 and 42 - to sell their 45 percent to interested oil companies last year under a strategy to downsize its onshore operations in the Niger Delta.

At least 30 consortia, comprising local and international firms, had submitted bids for the blocks that hold oil reserves in excess of 2.9 billion barrels.

Of the 30, four of the companies that made the highest offers during the tender process executed share purchase agreements with Shell, but this was subject to the approval of NNPC, the senior partner in the JV. 

NNPC was also required to waive its preemptive rights in the blocks before the deals could be concluded.

The successful companies were Conoil, belonging to telecom, banking, and oil and gas mogul, Dr. Mike Adenuga, which offered $1.29 billion for OML 30; Nestoil in partnership with Polish-based Kulczyk Oil Ventures Inc and Folawiyo Energy, reported to have offered $800 million for OML 42; Eland-Starcrest Consortium, which offered $157 for OML 40; and Niger Delta Exploration & Production, which offered $600 million for OML 34.  

 

and more ....

 

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ManSiarad 1st Aug '11 44 of 59

an update on the O-9 testing

http://www.marketwire.com/press-release/kulczyk-oil-ventures-inc-gas-tested-from-second-zone-o-9-well-ukraine-o-8-well-update-warsaw-kov-1544199.htm

The testing of the O-9 well began in June when a 5.5 metre thick reservoir unit in the Lower Bashkirian at a depth of approximately 2,560 metres (the R37 unit) was perforated. A two-metre section of the R37 unit was perforated and tested over two periods of time. The first test flowed gas at a rate of 1.2 MMcf/d (840 Mcf/d net to KOV) through a 6 mm choke. The second test flowed gas at a stabilized rate of 762 Mcf/d (533 Mcf/d net to KOV) through a 5 mm choke. This new discovery of gas in the Lower Bashkirian was disclosed in the KOV news release dated June 28, 2011 (current report No 35/2011).

The testing of the Middle Bashkirian sandstones, which are the primary target of the O-9 well, commenced on July 22nd, 2011 when two 3 metre zones of one of the potential gas zones in the Middle Bashkirian were perforated from measured depths of 2,304 to 2,307 metres and from 2,309 to 2,312 metres, respectively. These perforated intervals flowed gas at rates ranging between 1.7 MMcf/d (on a 5 mm choke) to 4.4 MMcf/d (on a 9 mm choke) i.e. between 1.19 to 3.08 MMcf/d net to KOV. with a stabilized flow rate of 2.9 MMcf/d on a 7 mm choke (2.03 MMcf/d net to KOV). The tested zone, which is only one of several potential gas producing zones seen in the Middle Bashkirian section in the O-9 well, is expected to commence commercial production at a gross rate of approximately 1.5 MMcf/d (1.1 Mmcf/d net to KOV) prior to the end of the third quarter.

Initially, this well will produce only from the tested Middle Bashkirian zone and gas reserves indicated by the testing of the Lower Bashkirian gas zone described in the June 28, 2011 news release will be available to produce at a later date. O-9 was the second new well drilled in the Olgovskoye field since the Company acquired its interest in KUB-Gas in June 2010 and it is part of a larger development program on the KUB-Gas assets which will continue through 2011 and 2012.

Testing of Olgovskoye-8 to come next.

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ManSiarad 19th Sep '11 45 of 59

A couple of snippets from Brunei and Nigeria

First, Tap OIl, operators of Brunei Block M, have sold  their 39 per cent stake to Hong Kong-listed Polyard Petroleum

http://www.upstreamonline.com/live/article278372.ece

At  US $ 2 million, it doesn't sound as though either Tap or the purchasers value the block very highly !

And a lengthy piece on the problems facing those firms who, like Kulczyk, are members of the consortia offering to buy Shell's interests in several Nigerian fields. The key issue is whether or not state firm NNPC will allow the foreign consortia to become operators. It seems NNPC don't want that - but bankers of the consortia, at least in one case, insist.

Potentially very messy and very expensive...

http://www.thisdaylive.com/articles/shell-s-messy-assets-sale/98734/

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ManSiarad 30th Sep '11 46 of 59

 

Another increase in gas production in the Ukraine, now more than 12 MMcf/d (8.4 MMcf/d net to KOV), thanks to putting the O-9 well into production, More tofollow, it would seem, from O-12.

http://www.marketwatch.com/story/ukraine-kub-gas-production-exceeds-12-mmcfd-2011-09-30

I note there's no mention in this update of the Itheria-1 well now being drilled in Syria (there must, surely, be some concerns about security?) or about the hoped-for acquisition of interests from Shell in Nigeria.

 

 

 

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ManSiarad 5th Oct '11 47 of 59


Results from testing of the O-12 well in the Ukraine now released.

http://www.reuters.com/article/2011/10/04/idUS180927+04-Oct-2011+MW20111004

CALGARY, ALBERTA, Oct 04 (MARKET WIRE) --
Kulczyk Oil Ventures Inc. (WARSAW:KOV) ("Kulczyk Oil", "KOV" or the
"Company"), an international upstream oil and gas company, is pleased to
report that the Olgovskoye-12 ("O-12") well has been production tested at
a maximum rate of 8.1 million cubic feet per day ("MMcf/d"). The well is
operated by KUB-Gas LLC ("KUB-Gas"), a partially-owned subsidiary in
which KOV has a 70% effective ownership interest. It is expected to be
tied-in for commercial production later in Q4 2011.

If production is anywhere near 8.1 mmscfd, that'll represent over 5.5 mmscfd NET to KOV, i.e. a 65% increase in total daily production from O-12 alone. Buying into these long-existing fields and using new technology does seem be be yielding dividends !

And, following analysis of seismic, new drilling planned in the  Olgovskoye,  Makeevskoye, and North Makeevskoye license areas, with five new wells in the next few months.





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ManSiarad 17th Oct '11 48 of 59
1

Kulczyk have suspended operations at their Itheria-1 well in Syria

http://media.kulczykoilventures.com/en/pr/196110/kulczyk-oil-ventures-suspends-operations-in-syria

Kulczyk Oil Ventures Inc. (“Kulczyk Oil”, “KOV” or “the Company”) announces that Loon Latakia Limited (“Loon Latakia”), an indirect wholly-owned subsidiary of KOV, has suspended current operations in Syria.  As a result of KOV suspending its exploration activities in Syria, the drilling of the Itheria-1 well, the first exploration well being drilled by the Company and its joint venture partners on Syria Block 9, has been suspended at a depth of 2,072 metres.

The original planned target depth of the Itheria-1 well was 3,256 metres.  The well was designed to evaluate multiple zones within a large structure with four-way dip closure defined by 3D seismic in an area approximately 200 kilometres due east of the City of Latakia.  The Affendi Sandstone of Ordovician age, the first objective encountered, was penetrated at a depth of approximately 1,470 metres and did not have sufficient porosity or permeability to be a potential reservoir. Two other potential reservoirs, the Ordovician Khanasser Sandstone and the Middle Cambrian Burj Carbonate are expected to occur below the suspended depth. The geological and petrophysical information obtained thus far at Itheria will now be assessed to review the prospectivity of the deeper objectives in Itheria and in the nearby Bashaer prospect. The need to assess, together with an increasingly more difficult operating environment, has resulted in a suspension of exploration activity.

As a result of the current operating conditions in the country, KOV requested an extension of the first exploration period under the Block 9 Production Sharing Contract (“Block 9 PSC”) which was refused. The Block 9 PSC remains in effect and discussions with the Syrian government authorities concerning Block 9 are continuing.  In the meantime, KOV will continue to monitor operating conditions in Syria to assess when, and if, a recommencement of its Syrian operations is possible.

Loon Latakia holds a participating interest of 50% in the Block 9 PSC which provides the right to explore for and, upon fulfilment of certain conditions, to produce oil and gas from Block 9, a 10,032 square kilometre (2.48 million acre) area in northwest Syria.

Note the bit in bold. Given the fact that KOV have drilled in a somewhat unfavourable political environment, I find it remarkable that the Syrian Government have refused to give them an extension to the first exploration period. They should be grateful that KOV drilled at all, in my view, especially with sanctions forcing them to order cmoanies to cut back on oil production.

"When, and if, a recommencement of its Syrian operations is possible" ? Perhaps not just yet.... and not under the present regime?

Man Siarad

 

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ManSiarad 20th Oct '11 49 of 59
1

In reply to post #60995

Ho Ho !

The Syrian News Agency has quoted the local KOV manager (working for Loon Latakia, a 100% subsidiary) as saying that work has NOT been halted.

http://www.businessweek.com/news/2011-10-20/kulczyk-oil-unit-denies-halting-syria-operations-sana-says.html

Oct. 20 (Bloomberg) -- Loon Latakia, a fully owned subsidiary of Calgary-based Kulczyk Oil Ventures Inc., continues to explore for crude in Syria, the official Syrian Arab News Agency reported.

Ammar Nofal, Loon Latakia’s general manager, described as untrue other reports that the company had suspended work in the country, according to the agency.

Kulczyk announced on Oct. 17 it had halted Syrian operations due to an “increasingly more difficult operating environment.” Loon Latakia holds a 50 percent stake in the Block 9 concession in the northwestern region of Syria, according to Kulczyk’s website.

One can't help wondering whether Mr. Nofal knew that this denial was being put out in his name - or whether he was "gently" informed by the Syrian Government that he had no choice, personally, in the matter !


Man Siarad

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ManSiarad 21st Oct '11 50 of 59

Some more on the suspension - or lack of suspension - of activities in Syria, from Syrian Oil and Gaz News, a site which is clearly run by government supporters, if not by the Oil Ministry itself

http://www.syria-oil.com/en/?p=1822

Loon Lattakia Limited Co. denies reports of suspending its work in Syria

Category: Companies Operating in Syria | Posted on: 19-10-2011

Canadian Loon Lattakia Limited Co. on Wednesday denied reports by some media stations that it suspended its activity in Syria, describing the reports as untrue and baseless.

"The company continues it works and commitments of exploration in the Syrian coast, we are in a continuous contact and coordination with the competent authorities in the country," Engineer Ammar Nawfal, Director of the Company said.

Some media said yesterday that Loon Latakia Ltd, an indirect unit of Kulczyk Oil Ventures Inc KOVP.WA and the operator of Block IX, has suspended all exploration operations in Syria, Mena Hydrocarbons said in a statement.

Loon Latakia Co. on 21/7/2011 started drilling archaeological – 1 exploration well, located in the southeast side of the Block – 9 (contract Lattakia), 35 km south east of the town Khanasser and 100 km south of the city of Aleppo, and with a final schema depth 3256 meter

Loon Energy INK Canadian Company , signed in 2008 with the Ministry of Oil and Mineral Resources, a contract to explore and develop oil and its production in the region / 9 / is called a Latakia contract and extends the area within the territory of the provinces of Latakia, Aleppo, Hama countries, and an area / 10039.139 / are still in the initial exploration period of the contract and will drill a well the second commitment (al-Bashaer – 1) before the end of this period.

I can't help feeling more convinced by the statement put out by Kulczyk HQ than by the statement ascribed to its country manager, who isn't, one assumes, altogether a free operator.

Man Siarad

 

 

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ManSiarad 24th Oct '11 51 of 59
1

In reply to post #61110

And the Syrian story continues:

http://www.oilandgaseurasia.com/news/p/0/news/13402

Polish business mogul Jan Kulczyk has suspended his oil operations in Syria, as violence in the Middle Eastern country shows no sign of abating.

“The main reason for the decision is the problem of ensuring the safety of our employees,” said Jakub Korczak, vice chairman of Kulczyk Oil Ventures (KOV), in an interview with business daily Parkiet.

“The country is virtually in a state of civil war,” he affirmed.

However, he acknowledged that that was not the only factor involved.

“It's worth pointing out that there are sanctions imposed by the United States and the European Union, which prevent us from securing financing for our search operations.”

By June this year, KOV had invested some 19.4 million zloty (4.5 million euros) in Syria. Most of that money has been spent on surveys, but drilling for oil began in July.

That seems pretty conclusive to me, regardless of what the poor fellow at Loon Latakia has put in his mouth by the Syrian Government.

With Syria on hold until the political situation is resolved, and that could take some time, with the deal with Shell in Nigeria, on which we've heard little lately, looking as thouigh it's falling apart and with no news out of Brunei (I wonder why?), KOV are, for the time being, a one-trick pony, with their Ukrainian interests, or so it would seem.

Ukraine is proceeding nicely, but it's not going to spark any significant re-rating, IMO

 

Man Siarad

 

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ManSiarad 28th Oct '11 52 of 59

An update on Nigeria - if only an extension of a couple of weeks to get part of the deal in place.

http://www.istockanalyst.com/business/news/5505342/kulczyk-oil-ventures-inc-nigeria-oml-42-update

Still, with such a short extension, one assumes that there IS some sort of progress in negotiations with the Government over the whole principle of the deal !

 

Man Siarad

 

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ManSiarad 2nd Nov '11 53 of 59
2

In reply to post #61282

Successful fraccing in the Ukraine:

http://www.marketwire.com/press-release/kulczyk-oil-ventures-inc-ukraine-first-successful-fracture-stimulation-yields-23-mmcf-warsaw-kov-1580868.htm

CALGARY, ALBERTA--(Marketwire - Nov. 2, 2011) - Kulczyk Oil Ventures Inc. ("Kulczyk Oil", "KOV" or the "Company") (WARSAW:KOV), is pleased to announce the successful completion of the first reservoir stimulation using western hydraulic fracturing technology ("frac'ing"). The frac was undertaken by KUB-Gas LLC ("KUB-Gas"), a partially-owned indirect subsidiary of KOV, on the R30c zone in the Ologovskoye-6 ("O-6") well. After being frac'd, the O-6 well flowed gas at a rate of 2.3 million cubic feet per day ("MMcf/d") through an 8mm choke, from a previously non-commercial zone. The O-6 well was originally drilled by KUB-Gas in 2008 to a total depth ("TD") of 2,530 metres.

HIGHLIGHTS

  • O-6 well frac'd and flows gas with condensate at a rate of 2.3 million cubic feet per day (MMcf/d) from a previously unproductive zone
  • First frac using modern Canadian technology in eastern Ukraine
  • Creates significant upside potential for KUB-Gas

The O-6 frac was implemented on October 26, 2011 and utilized a cross-linked gel water frac fluid with 25 tonnes of ceramic proppant. The target zone in the O-6 well was a Middle Bashkirian silty sandstone interval with a gross thickness of 14 metres which occurs at a depth of approximately 2,270 metres, referred to as the R30c unit. The zone had an indicated permeability of less than 1 millidarcy and was not capable of flowing gas at commercial rates before the frac'ing operation. The frac was designed to penetrate beyond the immediate vicinity of the well bore in to the R30c unit by creating fractures to liberate gas trapped in the tight formation. The company hopes to repeat this success with a frac of the R30c unit in the O-8 well, the second well in this frac programme. Initial indications from the O-8 frac look positive and more information will be made available as soon as the Company has definitive results.

Well, they needed some good news after the problems in Nigeria and the closinbg down of operations in Syria.

The Executive Vice President sounds mildly upbeat:

Jock Graham, Executive Vice President stated that:

"We are extremely excited about the initial results of this frac programme. By proving that the reservoirs in our license areas respond to modern frac technology, we have opened the door to substantial upside to our Ukraine project. While frac'ing is a commonly used procedure in North America on both conventional and unconventional reservoirs and now more recently on shale, to our knowledge this is the first frac of its kind in this part of Ukraine. The Company will now integrate these positive results into its data base with a view to expanding its Ukraine frac programme and continuing our successful track record with our Ukrainian project"

Man Siarad

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ManSiarad 25th Nov '11 54 of 59

Syria has granted an 11-month extension to KOV's licence agreement - finally. It did seem rather odd, to put it mildly, that the Government was pretending there was no reason tojustify its suspension of drilling operations a few weeks ago as the country descended further into crisis.

http://www.upstreamonline.com/live/article290858.ece

Let's see how the politics/near-civil war develops over the next few months

 

Man Siarad

 

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ManSiarad 1st Dec '11 55 of 59

Confirmation from Shell on the Nigerian deal

http://www.prnewswire.com/news-releases/shell-sells-stakes-in-nigerian-oil-leases-134816473.html

THE HAGUE, The Netherlands, December 1, 2011 /PRNewswire/ --

On November 30, the Shell Petroleum Development Company of Nigeria Limited (SPDC), a subsidiary of Royal Dutch Shell plc (Shell), (NYSE: RDS.A)(NYSE: RDS.B) completed the assignment of its 30% interest in two oil mining leases and related facilities in the Niger Delta.  Total cash proceeds for SPDC amount to some US$488 million.

These divestments are part of Shell's strategy of refocusing its onshore interests in Nigeria and in line with the Federal Government of Nigeria's aim of developing Nigerian companies in the country's upstream oil and gas business. 

"As we refocus our portfolio we are strengthening our position for the future," said Peter Voser, Chief Executive Officer of Royal Dutch Shell plc. "The improvement in the security situation in the Niger Delta coupled with continued progress on key projects provides the foundation for further investment and growth." 

Shell has been in Nigeria for more than 50 years and remains committed to keeping a long-term presence there - both onshore and offshore.  Through SPDC and its other Nigerian companies, it responsibly produces the oil and gas needed to fuel the economic and industrial growth that generates wealth for the nation and jobs for Nigerians.

Oil Mining Lease 26 was assigned to the Nigerian company FHN26 Limited, an affiliate of Afren plc, for an amount of some US$98 million (SPDC share). Oil Mining Lease 26 covers an area of some 480 square kilometres and is currently producing around 6,000 barrels of oil per day (100%) from two fields.

Oil Mining Lease 42 was assigned to Neconde Energy Limited, a majority Nigerian-owned consortium consisting of Nestoil Group, Aries E&P Company Limited, VP Global, Kulczyk Investments and Kulczyk Oil Ventures, for an amount of some US$390 million (SPDC share). OML 42 covers an area of some 814 square kilometres and includes the Batan, Egwa, Odidi, Jones Creek fields and related facilities. Operations had been shut down because of militant activity, but production from the Batan field resumed earlier this year and is currently producing circa 15,000 barrels of oil per day (100%).

Total E&P Nigeria Limited (10%) and Nigerian Agip Oil Company Limited (5%) have also assigned their interests in both leases, ultimately giving the buyers a 45% interest.

All approvals have been received from the relevant authorities of the Federal Government of Nigeria and the Nigerian National Petroleum Corporation.

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ManSiarad 3rd Dec '11 56 of 59

Poor Kulczyk,

Having just got an agreement from Syria on the extension of  their licence (#54, above), tightened EU sanctions now mean that they'll almost certainly have to suspend operations, along with Shell and Gulfsands and, presumably, Total.

 

:

http://www.ogj.com/articles/2011/12/shell-pulls-out-of-syria-after-new-eu-sanctions-imposed.html?cmpid=EnlDailyDecember22011

Royal Dutch Shell PLC said it will pull out of Syria following the European Union’s imposition of tougher sanctions against the regime of the country's embattled President Bashar Al-Assad.

“Shell will cease its activities in Syria in compliance with sanctions,” said a company spokesman. “Our main priority is the safety of our employees of whom we are very proud. We hope the situation improves quickly for all Syrians.”

...

Shell has exploration interests in southern Syria, in addition to interests in three production licenses in the country, amounting to about 40 oil fields. In 2010, Shell’s share of production stood at 20,000 boe/d.

Shell’s statement followed a decision by the EU to tighten its existing sanctions against Syria's energy and financial sectors in order to punish the Al-Assad regime for its crackdown on dissidents...

Other European oil companies operating in the country, including Total SA and Gulfsands Petroleum are thought likely to follow Shell’s lead. Total did not respond to media enquiries, while a spokesperson for Gulfsands said the firm would “comply with all of the latest EU sanctions.”


 

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ManSiarad 7th Dec '11 57 of 59

After a long silence, some news from Brunei.

http://www.upstreamonline.com/live/article292844.ece

By taking over AED, which has gone inmto administration, KOV get an additional 50% in Block L, taking them to 90%

Block L is an 1110 square kilometre exploration and development block covering certain onshore and offshore areas of northern Brunei.

The size of the block was recently halved under the first part of a phased relinquishment process required under the terms of its production sharing agreement.

A 143 square kilometre 3D seismic program is currently underway on Block L, according to Kulczyk, and two additional exploration wells will be drilled prior to the end of the second phase exploration period at the block.

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ManSiarad 13th Dec '11 58 of 59
2

Another update on the Ukraine development programme, this time of the O-18 well

http://newsblaze.com/story/2011121306140300003.cc/topstory.html

One of 7 gas-bearing zones tested, this being one, the R22, which hadn't been tested in the field before.

CALGARY, ALBERTA - (Marketwire - Dec. 13, 2011) - Kulczyk Oil Ventures Inc. (WARSAW:KOV) ("Kulczyk Oil", "KOV" or the "Company"), an international upstream oil and gas company, is pleased to report that testing of one of the indicated gas zones in the Olgovskoye-18 ("O-18") well in Ukraine has yielded a maximum rate of 1.187 million cubic feet per day ("MMcf/d") of natural gas through a 5 mm choke. The well is operated by KUB-Gas LLC ("KUB-Gas"), a partially-owned subsidiary in which KOV has a 70% effective ownership interest. It is expected to be tied-in for commercial production in the first quarter of 2012.

And a production update, with more gas coming on stream soon.

Average gross production during the month of November 2011 from the KUB-Gas properties was 11.8 MMcf/d of natural gas (8.3 MMcf/d net to KOV) and 119 barrels per day of condensate. Additional producible volumes have already been tested after the recent fracture stimulation of the O-6 and O-8 wells and the testing of the O-12 gas discovery well. These wells, which tested an aggregate maximum rate of 11.4 MMcf/d of gas, are expected to commence regular production at different times over the next 3 months. Good production practice dictates that the wells are produced at lower rates to avoid damage to the reservoir and, accordingly, the O-6, O-8 and O-12 wells are expected to add cumulative new production volumes of between 5 and 8 MMcf/d (3.5 to 5.6 MMcf/d net to KOV) when they are tied-in.

 

I don't recall production of condensate being mentioned before (thoigh I haven't checked back). Every little bit helps, I suppose

 

Man Siarad

 

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ManSiarad 12th Jan '12 59 of 59

Another update from the Ukraine, with the tying in of the O-12 well

http://www.reuters.com/article/2012/01/12/idUS112341+12-Jan-2012+MW20120112

CALGARY, ALBERTA, Jan 12 (MARKET WIRE) --
Kulczyk Oil Ventures Inc. (WARSAW:KOV) ("Kulczyk Oil", "KOV" or the
"Company"), an international upstream oil and gas company, is pleased to
report that the Olgovskoye-12 ("O-12") well in Ukraine was tied-in for
commercial production on January 1, 2012 and is currently producing at a
rate of more than 4.6 million cubic feet per day ("MMcf/d") of natural
gas. The well is operated by KUB-Gas LLC ("KUB-Gas"), a partially-owned
subsidiary in which KOV has a 70% effective ownership interest. Total
KUB-Gas production from its Ukraine properties has averaged approximately
16.5 MMcf/d (KOV net 11.6 MMcf/d) since January 1st and more than 17
MMcf/d (KOV net 11.9 MMcf/d) since January 4th. Condensate production
since the start of the year has averaged more than 200 barrels per day
("bbls/d") (KOV net 140 bbls/d).

The well has increased KOV's net daily gas production by 40 per cent and condensate proeuction well up too, though still small beer.

Average gross production during the month of December 2011 from the
KUB-Gas properties was 12.1 MMcf/d of natural gas (8.5 MMcf/d net to KOV)
and 130 barrels per day of condensate. Since the start of the year
production from the KUB-Gas properties has increased by 40%. The tie-in
during the first quarter of 2012 of the O-6 and O-8 wells, which were
fracture stimulated in the fourth quarter of 2011, will further increase
the production capability of the KUB-Gas licenses.

Man Siarad

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About ManSiarad

ManSiarad

Resident in the United Arab Emirates for over thirty years, I've naturally become rather interested in the local oil and gas industry, and have written many  thousands of words about the industry's origins, history and current and future plans. From that perspective, I've tracked the UAE's involvement in Oil and Gas elsewhere, with a particular focus on the political and diplomatic aspects, especially in Central Asia and East Africa. I wouldn't claim to understand the technical side - at all - but am, at least, able to call on a few friends to try to explain it to me.  As always, in terms of investing, sometimes I get it right and sometimes I get it wrong. It provides an interesting diversion from other activities, though. more »



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