Kulczyk Oil announced the results of an independent third party engineering evaluation of its resources in Syria by RPS Energy (“RPS”).

-Prospective Resources (High Estimate) of 777 million barrels of oil equivalent (“MMBOE”) for the Itheria prospect and 107 MMBOE for the Bashaer prospect were identified by RPS for the 100% interest in Syria Block 9;
-The net Prospective Resources (High Estimate) attributable to the 45% effective interest of KOV in Syria Block 9 are 350 MMBOE for Itheria and 48 MMBOE for Bashaer; Net Prospective Resources (High Estimate) are approximately 370% higher than the previous independent third party estimates;
-Prospective Resources (Best Estimate), net to the 45% effective interest of KOV, of 135 million barrels of oil and 101 billion cubic feet of gas for a total of 152 MMBOE at Itheria and 20 million barrels of oil and 8 billion cubic feet for a total of 21 MMBOE at Bashaer;
-KOV plans to spud the Itheria-1 well before the end of the second quarter.

The Company currently holds a participating interest of 100% in the Syria Block 9 production sharing contract which provides the right to explore for and, upon fulfillment of certain conditions, to produce oil and gas from Block 9, a 10,032 square kilometer (2.48 million acre) area in northwest Syria. The Company has agreements to assign an aggregate of 55% in ownership interests to third parties which are subject to the approval of Syrian authorities, and which, when approved, would leave the Company with a remaining effective interest of 45% in Block 9.

Geological evaluation and the interpretation of a 420 km2 3D seismic survey acquired by Kulczyk Oil over the southeastern part of Block 9 in 2010 led to the identification of the Itheria and Bashaer Prospects and an improved understanding of the subsurface.

The Company retained RPS to evaluate the resources underlying Syria Block 9 as at December 31, 2010. The evaluation was conducted using the guidelines of the Canadian Oil and Gas Evaluation Handbook and consistent with the reporting requirements listed in National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities of the Canadian Securities Administrators.

Itheria prospect – Prospective Resource volumes for the 100% interest in Block 9 in the Itheria prospect were estimated by RPS at an un-risked Best Estimate of 299 million barrels of oil (“MMBO”) and 225 billion cubic feet (“BCF”) of solution gas for a total of 337 MMBOE. For the 45% interest of Kulczyk Oil, the corresponding volumes are 135 MMBO, 101 BCF and 152 MMBOE.

Bashaer prospect – Prospective Resource volumes for the 100% interest in Block 9 in the Bashaer prospect were estimated by RPS at an un-risked Best Estimate of 44 MMBO and 17 BCF of solution gas for a total of 47 MMBOE. For the 45% interest of Kulczyk Oil, the corresponding volumes are 20 MMBO, 8 BCF and 21 MMBOE.

The planned total depth of Itheria-1 is 3,200 meters and estimated drilling time is 66 days. The well will evaluate a four-way dip closure and is expected to spud in June, 2011. The Company plans to move the drilling rig from the Itheria-1 to the second well in the 2011 program, Bashaer-1, shortly after completion of drilling operations on Itheria-1. The Bashaer-1 well has a planned total depth of 2,600 meters at a location approximately 10 kilometres northwest of Itheria-1.

“The Itheria-1 well will test a structure with potential for world-class hydrocarbon volumes as indicated in the evaluation report of RPS. We look forward to drilling Itheria-1, the first well operated by the Company in Syria” said Jock Graham, Executive Vice President of Kulczyk Oil.