One of the indicated gas zones in the Olgovskoye-18 (O-18) well in Ukraine yielded a maximum flow rate of 1.19 million cubic feet per day (MMcf/d) of natural gas through a 5.0-mm choke, according to Kulczyk Oil Ventures Inc.

The well is operated by KUB-Gas LLC, a partially owned subsidiary in which KOV has a 70% effective ownership interest, and is expected to begin commercial production in the first quarter 2012.

The O-18 well reached a planned depth of 2,300 m (7590 ft) on Nov. 4. Following analysis of data gathered during drilling, it was decided to deepen the well to total depth (TD) of 2,650 m (8,745 ft). The well was then cased to TD as a potential gas producer.

The well was designed to test gas-bearing reservoirs of Muscovian and Bashkirian age and to further develop the gas production capability of the Olgovskoye field.

Wireline logs indicated up to 38.5 m (127 ft) of gas pay in seven zones. The R22 zone, which had not previously been produced in the Olgovskoye license area, was perforated and flowed for a period of 12 hours prior to being shut-in for pressure build-up.

Additional production has already been tested after the recent fracture stimulation of the O-6 and O-8 wells and the testing of the O-12 gas discovery well. These wells, which tested an aggregate maximum rate of 11.4 MMcf/d of gas, are expected to commence regular production at different times over the next three months.

Good production practice dictates that the wells are produced at lower rates to avoid damage to the reservoir and, accordingly, the O-6, O-8 and O-12 wells are expected to add cumulative new production volumes of between 5.0 and 8.0 MMcf/d when connected.

The drilling rig is being moved to a new location at Makeevskoye-21, which has a planned TD of 2,176 m (7,181 ft). The M-21 well is about 900 m northwest of the M-19 gas discovery well, which commenced production in late July 2011 at a rate of 5.5 MMcf/d. It is expected to spud in the second half of December and to reach TD approximately 30 days after the spud date.