Kulczyk Oil boosts sales 3.5x in 9M12, postpones AIM listing till early 2013

Kulczyk Oil　Ventures (KOV PW) boosted it average natural gas sales volume 2x yoy to 14,5 MMcf/d in 9M12, the company reported on Nov. 13 in its financials. The average gas sale price grew 11.5% to USD 11.7/Mcf, while condensate sales volume increased 2.4x yoy to 142 bbl in 9M12, boosting revenue for the period 3.5x to USD 72.3 mln. Natural gas netback grew 46% yoy to USD 8/Mcf in 9M12. Kulczyk reported an USD 80.2 mln net loss in 9M12 on an USD 85.3 mln Brunei Block M write off. Kulczyk also announced plans to conduct fracking of the M-21 well by the year’s end. In a separate Nov. 13 statement, Kulczyk reported a 6.7% increase in its 2P reserves after royalties to 5,624 MMboe since the end of 2011. The company plans to complete its AIM listing in 2013.

Roman Dmytrenko: The company’s production results are of little surprise, considering that a recent operation update indicated that the average gas output as of mid-November stood at 17.7 MMcf/d, or 22% higher compared to 9M12. However, the year-end exit rate might be up to 10% lower due to additional work on the M-21 well, which was put into commercial production at a rate of 1.7 MMcf/d in August. We are concerned with the postponement of the AIM listing till early 2013 as an auditor emphasized that Kulczyk might need additional funds to continue implementing its drilling program.