KOV And KI Agree To Amended Terms For Loan

KOV And KI Agree To Amended Terms For Loan 
CALGARY, ALBERTA -- (Marketwire) -- 12/18/12 -- Kulczyk Oil Ventures
Inc. ("Kulczyk Oil", "KOV" or the "Company") (WARSAW:KOV), an
international upstream oil and gas exploration and production
company, is pleased to announce that the terms of the June 2012 loan
agreement with Kulczyk Investments SA ("KI") (the "Original
Agreement") have been amended to, among other things, extend the term
of the Loan (as defined below) by one year from 31 December 2012 to
31 December 2013 and make amounts owing under the Loan convertible
into common shares of KOV ("Common Shares"). All dollar amounts in
this press release are expressed in United States currency. 
Funding Arrangement 
The Original Agreement for the provision by KI of up to an aggregate
principal amount of $12 million in funding (the "Loan") to KOV was
finalized in June 2012. The Loan was intended, and is intended to
continue, to assist with the funding of KOV's ongoing working capital
requirements.  
Under the terms of the amended agreement (the "Amended Agreement"),
the term of the Loan was extended by one year from 31 December 2012
to 31 December 2013 (the "Maturity Date") and all amounts owing under
the Loan were made automatically convertible into Common Shares upon
the completion by KOV of an "IPO" prior to the Maturity Date or,
alternatively, convertible, at the option of KI, into Common Shares
at any time during the term of the Loan.  
The Amended Agreement provides that KOV shall use its commercially
reasonable efforts to complete an IPO by no later than the Maturity
Date (being 31 December 2013). For the purposes of the Amended
Agreement, an "IPO" is defined as: (a) the initial public offering or
the admission to trading of the Common Shares on the AIM Market of
the London Stock Exchange; (b) the acquisition of KOV by an entity
listed on a recognized stock exchange for securities of such entity;
(c) the acquisition of an entity listed on a recognized stock
exchange by KOV for securities of KOV; or (d) any transaction or
arrangement which results in KOV being listed, directly or
indirectly, on a recognized stock exchange other than the Warsaw
Stock Exchange ("WSE"). In the event of an IPO, the Amended Agreement
provides for the automatic conversion of the outstanding principal
amount under the Loan, together with all accrued and unpaid interest
thereon and any other fees or costs payable by KOV to KI in
connection with the Loan, if any, (collectively, the "Obligations")
into Common Shares. If Common Shares are issued by KOV in connection
with the IPO, the conversion price will be either the offer price per
Common Share in the IPO or the issue price per Common Share in the
IPO. If no Common Shares are issued by KOV in connection with the
IPO, the conversion price will be either the volume weighted average
price ("VWAP") of a Common Share on the WSE during the five trading
days prior to and excluding the date of the IPO or the exchange ratio
per Common Share in the IPO. 
If KI chooses to exercise its option to convert any or all of the
outstanding Obligations into Common Shares at any time during the
term of the Loan, the conversion price will be the VWAP of a Common
Share on the WSE during the five trading days prior to, and
excluding, the date of the conversion election notice.  
Under the terms of the Amended Agreement, interest, payable monthly,
remains unchanged at 15% per annum. The Loan is currently drawn at
$10 million and the balance of the loan is expected to be drawn down
by the end of December 2012. 
The total number of Common Shares issuable to KI if the Obligations
are converted is uncertain as the amount of the Obligations to be
converted and the final conversion price will be determined in the
future.  
KI, the major shareholder of KOV, 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 and Manoj Madnani, a director of KOV, is a
member of the Supervisory Board of KI. KI presently holds
approximately 241 million Common Shares, representing, in aggregate,
approximately 49.9% of the outstanding Common Shares.  
About Kulczyk Oil 
Kulczyk Oil is an international upstream oil and gas exploration and
production 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 the Company 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 a 90% working interest in a production sharing
agreement which gives the Company the right to explore for and
produce oil and natural gas from Block L, a 1,123 square kilometre
area covering onshore and offshore areas in northern 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 the satisfaction 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%
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.
KOV declared force majeure, with respect to its operations in Syria,
in July 2012. 
The main shareholder of the Company is Kulczyk Investments S.A., 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, including the
intended use of proceeds of the Loan, the completion by KOV of an
IPO, the total principal amount to be drawn down by KOV pursuant to
the Amended Agreement, the number of Common Shares to be issued to KI
pursuant to the Amended Agreement and the conversion price. 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. 


 
Canada                                                                      
Suite 1170, 700-4th Avenue S.W., Calgary, Alberta, Canada                   
Telephone: +1-403-264-8877                                                  
Facsimile: +1-403-264-8861                                                  
                                                                            
Dubai                                                                       
Al Shafar Investment Building, Suite 123, Shaikh Zayed Road,                
Box 37174, Dubai, United Arab Emirates                                      
Telephone: +971-4-339-5212                                                  
Facsimile: +971-4-339-5174                                                  
                                                                            
Poland                                                                      
Nowogrodzka 18/29                                                           
00-511 Warsaw, Poland                                                       
Telephone: +48 (22) 414 21 00                                               
Facsimile: +48 (22) 412 48 60                                               

Contacts:
Kulczyk Oil Ventures Inc. - Canada
Norman W. Holton
Vice Chairman
+1-403-264-8877
nholton@kulczykoil.com 
Kulczyk Oil Ventures Inc. - Poland
Jakub J. Korczak
Vice President Investor Relations & Managing Director CEE
+48 22 414 21 00
jkorczak@kulczykoil.com
www.kulczykoil.com
 
 
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