Eurogas Corporation
TSX VENTURE : EUG

Eurogas Corporation

October 25, 2005 15:29 ET

Eurogas Corporation: News Release

CALGARY, ALBERTA--(CCNMatthews - Oct. 25, 2005) - Eurogas Corporation (TSX VENTURE:EUG) ("Eurogas") is pleased to announce the successful closing of its 24,348,286 common share Rights Offering, with gross proceeds to the Corporation of $32,139,738. The maximum subscription of 24,348,286 shares was significantly over-subscribed under the additional subscription privilege. Dundee Corporation was allocated approximately 50% of the 2,830,380 rights not exercised under the basic subscription privilege.

The Corporation intends to use the proceeds from the Offering for construction and installation of production facilities and recompletion costs for the Castor #1 well in the Amposta reservoir, the oil development program on the Sfax offshore permit in Tunisia, $5 million in debt reduction and for general corporate purposes.

The Corporation continues to make excellent progress in the engineering and procurement activities relating to the implementation of the oil development phase of the Amposta UGS project, with drilling and oil production forecast to commence in the second half of 2006. On the Sfax permit in Tunisia, the 348 km2 3D seismic program that was shot over two previously drilled oil discoveries is in the final stages of processing. The geophysical interpretation of this data will lead to the identification of drilling locations for 2006.

Eurogas is a Canadian oil and gas exploration and development company engaged in development of a major underground storage facility offshore the east coast of Spain, and the exploration and development of oil and gas in Tunisia's Gulf of Gabes.

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
    or
    Eurogas Corporation
    Andrew Constantinidis
    Vice President & CFO
    (403) 264-4985
    (403) 262-8299 (FAX)
    Email: eurogas@eurogascorp.com
    Website: www.eurogascorp.com
    or
    Eurogas Corporation
    520, 333 - 5th Avenue SW
    Calgary, Alberta, Canada
    T2P 3B6