Eurogas Corporation
TSX VENTURE : EUG

Eurogas Corporation

October 23, 2006 13:47 ET

Eurogas Corporation Announces Significant Events in Development of Castor Project in Spain

CALGARY, ALBERTA--(CCNMatthews - Oct. 23, 2006) - Eurogas Corporation ("Eurogas") (TSX VENTURE:EUG) is pleased to announce significant events in the development of the Castor Underground Gas Storage ("UGS") Project in Spain.

Commencement of FEED Study

Eurogas' Spanish subsidiary, Escal UGS S.L., has entered into an Assistance Contract with the leading industrial group in Spain, ACS Group, for the development of the Castor Underground Gas Storage project. This agreement is expected to be the first step in a broader collaboration. Under the terms of this contract, ACS Group will undertake the Front End Engineering and Design ("FEED") study and provide permitting and licensing services. The FEED study will take approximately 5-6 months, will result in a fixed price determination for the project investment, and form the basis for an award of a turnkey contract for Engineering, Procurement and Construction (EPC). The awarding of the EPC contract will comply with applicable public procurement provisions.

ACS Group is the largest construction group in Spain and eighth largest in the world, with 2005 revenue in excess of $15 billion. ACS Group is a global leader in the creation, construction and operation of infrastructure in a variety of industrial sectors such as: oil & gas, LNG and re-gasification, power generation and grids, railways. Through its subsidiaries, Dragados Industrial, Dragados Off-shore and Cobra, it is one of the world leaders in the construction and installation of off-shore platforms and infrastructure topsides, and offers extensive experience in transportation and distribution networks, onshore natural gas pipelines and gas compression stations. Its industrial investments include a 35% stake in Union Fenosa, and a 10% stake in Iberdrola - both leading Spanish utility companies.

Appointment of General Manager Castor Project

Mr. Luis Carmona has joined Eurogas subsidiary Escal UGS S.L. in the capacity of General Manager Castor Project. Based in Madrid, Mr. Carmona will be responsible for the design, construction and operation of the Castor Project.

Mr. Carmona is a highly qualified professional with 30 years of wide-ranging engineering and management experience in the oil and gas industry, both onshore and offshore, gained while working for Repsol YPF in Spain and North Africa, with specific experience in the area of underground gas storage. Most recently, he was responsible for the development of a US$ 4 billion integrated LNG project in Algeria that included the drilling of over 200 wells, a pipeline and the installation of LNG facilities.

Pursuant to the terms of the Corporation's Employee Stock Option Plan, the Board of Directors has approved the issue of share options in the amount of 300,000 to Mr. Carmona with a term of five years, vesting over three years, and an exercise price based on the closing price of Eurogas shares on October 25, 2006.

Eurogas Corporation is an independent oil and gas exploration company listed on the TSX Venture Exchange under the symbol EUG and is engaged in development of a major underground storage facility offshore the east coast of Spain, and the exploration and development of oil and gas fields in Tunisia. For more information on the Company, visit the website www.eurogascorp.com.

Jaffar Khan

President & CEO

Certain information set forth in this document, including management's assessment of the Corporation's future plans and operations, contains forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Corporation's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The Corporation's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits the Corporation will derive from there. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Eurogas Corporation
    Jaffar Khan
    President & CEO
    (403) 264-4985
    (403) 262-8299 (FAX)
    or
    Eurogas Corporation
    Andrew Constantinidis
    Vice President & CFO
    (403) 264-4985
    (403) 262-8299 (FAX)
    or
    Eurogas Corporation
    250, 435 - 4 Avenue S.W.
    Calgary, Alberta, Canada
    T2P 3A8
    Email: eurogas@eurogascorp.com
    Website: www.eurogascorp.com