Kulczyk Announces Second Successful Fracture Stimulation
Kulczyk Oil Ventures Inc. has successfully completion of the second reservoir stimulation in Ukraine using hydraulic fracturing technology on the R30c zone in the Ologovskoye-8 ("O-8") well.
After being frac'd, the O-8 well flowed gas at a rate of 1 million cubic feet per day ("MMcf/d") through a 7 mm choke, from a previously non-commercial zone.
The O-8 well was drilled by KUB-Gas in the first quarter of 2011 to a total depth ("TD") of 2,780 metres but did not test commercial volumes of natural gas prior to the frac'ing operation.
The successful frac of the R30c unit in the O-8 well, the second well in the frac program confirms the potential for enhancement of productivity utilizing frac'ing. On 2 November 2011 the Company announced that the R30c zone in the Olgovskoye-6 ("O-6") well was frac'd successfully and flowed 2.3 MMcf/d through an 8 mm choke. The O-8 and O-6 wells are both expected to be tied-in for regular production prior to the end of 2011. Based upon the positive results of this first fracture stimulation program, the Company is selecting candidates and planning for a second multi-well frac'ing program in mid-2012.
The total cost of the two-well hydraulic fracturing program is expected to be approximately $1.6 million ($800,000 per frac). By way of comparison, the estimated costs to drill and complete a new 2,500 metre well are approximately $2.5 million.
Jock Graham, Executive Vice President stated that:
"The successful fracs in the O-8 and O-6 wells confirms our belief that modern frac technology can have a material impact on the Company by unlocking new production and reserves from zones that had previously been considered to be uneconomic. The economics of frac'ing appears to be quite favourable and, by proving that some of the zones in our license areas respond to modern frac technology, we appear to have opened the door to substantial upside, in terms of both production and reserves, from our Ukraine project."
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 with Gastek LLC owning the remaining 30%.