SOURCE: EuroGas, Inc.

April 28, 2008 08:24 ET

EuroGas Enters Agreement to Acquire 45% Interest in McCallan Oil & Gas (UK)

NEW YORK, NY--(Marketwire - April 28, 2008) - EuroGas, Inc. (HAMB: EUG) (PINKSHEETS: EUGS) today announced that it has signed a Share Option Agreement (the "Agreement") with Regent Ventures Ltd. (Regent), a Canadian public company, to acquire Regent's 45% interest in McCallan Oil & Gas (UK) Ltd. (McCallan), a closely held UK company with European oil and gas and mining interests.

Under the terms and conditions of the agreement, Regent has granted EuroGas the Option to purchase Regent's entire interest in McCallan Oil & Gas (UK) Ltd in exchange for the issuance of 10 million common shares of EuroGas and a cash-payment of CDN $ 3 million payable in three stages. The initial cash payment is to be made five months after Regent has received regulatory approval; two additional payments of CDN $ 1 million are to be made on or before March 31, 2009 and September 30, 2009, respectively.

Spencer Clarke LLC, a New York-based investment bank which provides financial advisory services to EuroGas, acted as exclusive advisor in this transaction.

McCallan's s main assets are its wholly owned subsidiaries EuroGas Polska sp.zo.o (EuroGas Polska) and EuroGas (Austria) GmbH (EuroGas Austria). The remaining 55% interest in McCallan is held by private investors.

EuroGas Polska is a Polish private oil and gas company with interests in the exploration and development of Coal Bed Methane in the Upper Silesian Coal Basin in Poland. EuroGas Polska also owns a 24% interest in a Joint Operating Agreement (JOA) with Poland's national oil and gas company Polish Oil and Gas Company (POGC), a large public company trading on the Warsaw Stock Exchange, which owns a 51% interest in the JOA and is the operator. The balance of 25% is held by Aurelian Oil & Gas PLC, a British public company trading on the London Stock Exchange.

The sole asset of the JOA is a block of 10 oil and gas concessions in the Carpathian Mountains in Southeast Poland. The blocks lie along the trend of Carpathian oilfields which have been producing since the 1850s. Seismic work has indicated the presence of potentially substantial oil and gas reserves. In its last "Annual Report 2006," published in June 2007, the Polish Ministry of Environment, Forestry and Natural Resources states, "A report conducted by independent Polish oil and gas experts, based on regional geological and geophysical evaluation of original and reprocessed data, indicated hydrocarbon prospects in 12 exploration leads within this area, with the largest one potentially containing 300 million barrels of oil equivalent."

The recent discovery of the huge 2.43 TCF (Trillion Cubic Feet) Przemysl natural gas field at the Northeast flank of the JOA concession block, bordering Ukraine, has indicated deeper hydrocarbon horizons which may add substantial reserves to the potential 300 Million barrel equivalent area situated in the southern portion of the JOA concession block, bordering Slovakia. In the fall of 2008 additional seismic work will be conducted on the JOA concession block to be followed by the drilling of two exploratory wells

RWE-DEA, a wholly owned subsidiary of Europe's utility giant RWE of Germany, has drilled three exploratory wells to date adjacent to the JOA concession block on the northwestern flank. RWE-DEA's wells are under "tight-hole status" and, accordingly, no results have yet been released.

EuroGas Austria is a private Austrian company, based in Vienna. Its main asset is a 33% shareholding interest in Rozmin s.r.o. (Rozmin), a private Slovakian mining company which holds a mining concession to develop the huge Gemerska Poloma talc ore body, one of the largest and richest talc ore bodies in the world. The ore body contains 150 million tons of high-grade talc, an important industrial mineral. The project is in the advanced stage and production is imminent.

EuroGas has an agreement to purchase a 57% interest in Rozmin s.r.o. from Belmont Resources Ltd., subject to receipt of a final purchase price payment in the amount of approximately CDN $ 1,000,000. The remaining 10% interest in Rozmin is held by a Berlin-based private German trading company.

About EuroGas, Inc.

EuroGas is a publicly traded oil and gas company with assets in Ukraine. The company's common stock trades on the Hamburg Stock Exchange in Germany under the symbol EUG and on the Other OTC (Pink Sheets) in the United States under the symbol EUGS.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

This press release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995.

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Contact Information

  • For further information, please contact:
    Wolfgang Rauball
    Chairman & CEO
    Telephone: (212) 618-1274
    Fax: (212) 618-1276