CALGARY, ALBERTA--(Marketwire - June 22, 2012) - Kulczyk Oil Ventures Inc. (WARSAW:KOV) ("Kulczyk Oil", "KOV" or the "Company"), an international upstream oil and gas exploration and production company, is pleased to announce the finalization of a new funding arrangement. All dollar amounts are expressed in United States currency.
New Funding Arrangement
On 22 June 2012 KOV finalized an arrangement with Kulczyk Investments SA ("KI"), its major shareholder, for the provision of up to $12 million in funding to KOV. In conjunction with KOV's existing cash balances and undrawn EBRD debt facility, this loan will fund KOV's ongoing working capital requirements. KI is an international investment house founded by Polish businessman Dr. Jan Kulczyk, the former Chairman of the board of directors of KOV. Dariusz Mioduski, the current Chairman of the board of directors of KOV, is the Chief Executive Officer of KI.
In connection with these arrangements KI has agreed to provide funding by way of a loan to the Corporation for the principal amount of up to $12 million (the "KI Loan"). The KI Loan is for a term ending December 31, 2012 and interest is payable monthly at a rate of 15% per annum on the principal balance outstanding. KOV may at any time prepay the whole or any part of the outstanding amount of the KI Loan.
About Kulczyk Oil
Kulczyk Oil is an international upstream oil and gas exploration company with a diversified portfolio of projects in Ukraine, Brunei and Syria and with a risk profile ranging from exploration in Brunei and Syria to production and development in Ukraine. The common shares of Kulczyk Oil trade on the Warsaw Stock Exchange under trading symbol "KOV".
In Ukraine, KOV owns an effective 70% interest in KUB-Gas LLC. The assets of KUB-Gas consist of 100% interests in five licences near to the City of Lugansk in the northeast part of Ukraine. Four of the licences are gas producing.
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 90% working interest in Block L, a 1,123 square kilometre area covering onshore and offshore areas in northern Brunei and a 36% working interest in Block M, a 1,505 square kilometre area onshore in southern Brunei.
In Syria, KOV holds a participating interest of 50% in the Syria Block 9 production sharing contract 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 area in northwest Syria. The Company has an agreement to assign a 5% in ownership interest to a third party which is subject to the approval of Syrian authorities, and which, if approved, would leave the Company with a remaining effective interest of 45% in Syria Block 9.
The main shareholder of the Company, Kulczyk Investments S.A., owns approximately 44% of the issued common shares. Kulczyk Investments S.A. is an international investment house founded by Polish businessman Dr Jan Kulczyk.
For further information, please refer to the Kulczyk Oil website (www.kulczykoil.com).
Translation: This news release has been translated into Polish from the English original.
Forward-looking Statements This release may contain forward-looking statements made as of the date of this announcement with respect to future activities of KOV that are not historical facts. Although the Company believes that its expectations reflected in the forward-looking statements are reasonable as of the date hereof, any potential results suggested by such statements involve risk and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Various factors that could impair or prevent the Company from completing the expected activities on its projects include that the Company's projects experience technical and mechanical problems, there are changes in product prices, failure to obtain regulatory approvals, the state of the national or international monetary, oil and gas, financial, political and economic markets in the jurisdictions where the Company operates and other risks not anticipated by the Company or disclosed in the Company's published material. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties and actual results may vary materially from those expressed in the forward-looking statement. The Company undertakes no obligation to revise or update any forward-looking statements in this announcement to reflect events or circumstances after the date of this announcement, unless required by law.