Eurogas Corporation
TSX VENTURE : EUG

Eurogas Corporation

May 25, 2005 12:05 ET

Eurogas Reports Q1 2005 Results

CALGARY, ALBERTA--(CCNMatthews - May 25, 2005) - Eurogas Corporation (TSX VENTURE:EUG) ("Eurogas" or the "Corporation") today announced its financial results for the three month period ending March 31, 2005. Capital expenditures totaled $12.2 million during the first quarter which was highlighted by significant progress towards the development of the Amposta Underground Storage project in Spain. Plans are being finalized to place the Castor #1 well on production through a system that allows simultaneous production and drilling operations. Depending upon timing of administrative approvals in Spain, production is expected to commence in mid-2006, with a second well being drilled immediately after the Castor #1 well is placed on production.

The Corporation recorded revenue of $124,385 from its two minor, non-operated Canadian properties during the quarter, and a net loss of $427,941 before taxes. Funds used in continuing operations totaled $139,698.

HIGHLIGHTS OF Q1 2005

On January 24, 2005 Eurogas completed drilling and testing operations of the Castor #1 well for the Amposta project in Spain, after flow testing oil in commercial quantities. The total cost of the well was $13.4 million, of which $9.5 million was incurred during the first quarter of 2005. Work is currently being done to complete the design of the oil production system. Upon completion of regulatory approvals, Castor #1 will be put on production and the drilling of additional wells for oil production and future gas storage will commence. The Amposta project entails the conversion of the abandoned Amposta oil field to natural gas storage. Eurogas holds a 72% working interest in the gas storage project and a 100% working interest in all hydrocarbons produced on the permit.

During the quarter, Eurogas commenced a 140 km2 3-D seismic program over the Amposta structure with total expenditures of $1.9 million incurred to March 31, 2005. This state-of-the-art survey is designed to delineate the significant system of undrilled attic areas on the structure in order to accurately locate wells required to drain remaining oil prior to converting the wells to gas injection/withdrawal.

On the 1.1 million acre offshore Sfax permit located in the Gulf of Gabes in Tunisia, processing neared completion on the 350 km2 3-D seismic survey acquired in mid-2004. Plans for 2005 are to integrate the seismic data into the geological model, convert the Prospecting Permit to an Exploration Permit, and, in early 2006, drill a well to evaluate one of the three known oil accumulations on the permit. Eurogas holds a 45% interest in the Sfax permit.

During the quarter, Eurogas participated in the EH-1 exploration well on the El Hamra Permit in Tunisia. The well was plugged and abandoned after an extensive evaluation program. EH-1 is the second well drilled on this 1.2 million acre permit; the first by Eurogas and its partners. Eurogas has a 20 percent working interest in the permit and will be responsible for 20 percent of costs above total well costs of US$5 million. Eurogas had not incurred costs on this project to March 31, 2005.

Eurogas has filed its consolidated financial statements and related Management Discussion and Analysis for the period ended March 31, 2005 with Canadian securities regulatory authorities on the System for Electronic Document Analysis and Retrieval ("SEDAR").

Eurogas is a Canadian-based company engaged in exploration, development and production activities in Spain, Tunisia and Canada.

Jaffar Khan

President & CEO

This press release contains certain forward-looking statements that reflect the current views and/or expectations of Eurogas with respect to its performance, business and future events. Such statements are subject to a number of risks, uncertainties and assumptions which may cause actual results to be materially different from those expressed or implied. Eurogas assumes no future obligation to update these forward-looking statements.

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)
    or
    Eurogas Corporation
    520, 333 - 5th Avenue SW
    Calgary, Alberta, Canada
    T2P 3B6
    Email: eurogas@eurogascorp.com
    Website: http://www.eurogascorp.com