SOURCE: EuroGas, Inc.

December 07, 2010 06:00 ET

Niebieszczany # 1 Well Drilling Ahead in Southeast Poland at 1,800 Meters

EuroGas Shareholder Walter Storm Expands Financing for EuroGas

NEW YORK, NY--(Marketwire - December 7, 2010) - EuroGas, Inc. (EuroGas) (PINKSHEETS: EUGS) (FRANKFURT: EUG) (XETRA: EUG) (HAMB: EUG) (STUT: EUG) today announced that its Niebieszczany # 1 well is drilling ahead in southeast Poland at approximately 1,800 meters (approximately 5,900 ft.).

The well is situated in the Carpathian Thrust Fold Belt in southeast Poland in an area that comprises approximately 20% of the entire Bieszczady License Area (BLA), which encompasses approximately 3,500 square kilometres (approximately 1,000,000 acres). 

The Niebieszczany # 1, which was spudded on Oct. 14, 2010, has a current planned total depth of 4,160 m (13,450 ft.) and may be drilled to as deep as 4,800 m (15,750 ft.) if warranted. Seismic data has revealed a preliminary target at 2,400 m (7,875 ft.) with a secondary target indicated at 4,160 m (13,650 ft.). Preliminary results are expected in the first quarter 2011, with the final results coming in the late second quarter or the early third quarter of 2011.

The joint venture partners plan to drill a second well either nearby the Niebieszczany # 1, or at Rudawka, an area which is approximately 50 kilometers from the current well. The well's participants are conducting additional seismic to the east and south. The operator is Polskie Gornichtwo Naftowe i Gazownictwo (PGNiG), Poland's national oil and gas concern, which owns a 51% interest in the Bieszczady license. EuroGas' subsidiary EuroGas Polka Sp. z o.o. owns a 24% interest.

According to Aurelian Oil & Gas PLC (whose wholly owned subsidiary Energia Bieszczady Sp. z o.o. owns the remaining 25% working interest in the well), "The well will target an oil prospect of up to 100 million barrels (gross) and results are expected in Q1 2011. A number of reservoirs, all of which are proven producers in the region, are being targeted by this well and the primary prospect will be drilled to a maximum depth of around 4800 m. There are several other similar sized prospects on trend which would be derisked in the event of a successful outcome of this first well. Using existing 2D seismic data which covers approximately 20% of the block area, prospects totaling up to 680 million barrels of unrisked prospective resources have been mapped. A further 300 km of 2D seismic is currently being acquired on the license which will take block coverage to approximately 40%. This survey is being shot to the north and east of the existing 2D covered area and interpreted in Q1/Q2 2011."

Separately, the company announced that Walter Storm, a long term shareholder of EuroGas, has extended the $1,000,000 loan, which was due in October 2010, for an additional year. In addition, Mr. Storm lent the company an additional $1,850,000 -- which funds were used to finance the drilling of the Niebieszczany # 1 and associated programs -- which were converted at $0.10 per restricted EuroGas common share. Mr. Storm also received an additional 6,000,000 restricted EuroGas common shares as an incentive for this financing and extension of the previous $1,000,000 loan.

EuroGas Polska Sp. z o.o. is a 100% subsidiary of McCallan Oil & Gas (UK), a closely held British private company. The Company has recently announced that it has entered into a series of agreements to acquire up to 100% of McCallan Oil & Gas (UK).

McCallan (UK) owns a 100% shareholding in EuroGas Polska Sp. z o.o. (which owns 24% in the Bieszczady Joint Venture Agreement (JOA) with PGNiG), Poland's national oil and gas company (which owns a 51% as operator of the JOA); the remaining 25 % interest in the JOA is owned by Aurelian Oil & Gas Plc, a publicly traded UK company. McCallan also owns EuroGas GmbH (Austria) which in turn owns 33% of Rozmin s.r.o., and 50% of OOO EuroGas Ukraine, a Ukrainian company registered in Kiev Ukraine which explores for coal bed methane and unconventional gas (including shale gas) in Eastern Ukraine.

About EuroGas, Inc.
EuroGas is a publicly traded oil and gas company with assets in Ukraine and Poland, as well as talc mining interests in the Slovak Republic. The company's common stock trades on the Frankfurt, Hamburg and Stuttgart Stock Exchanges and XETRA in Germany under the symbol EUG and on the Other OTC (Pink Sheets) in the United States under the symbol EUGS. (www.eurogasinc.com)

"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. You can identify forward-looking statements by their use of the forward-looking words "anticipate," "estimate," "project," "likely," "believe," "intend," "expect," or similar words. These statements discuss future expectations, contain projections regarding future developments, operations, or financial conditions, or state other forward-looking information. When considering the forward-looking statements made in this press release, you should keep in mind the risks noted and other cautionary statements throughout this press release. You should also keep in mind that all forward-looking statements are based on management's existing beliefs about present and future events outside of management's control and on assumptions that may prove to be incorrect. If one or more risks identified in this press release or other filing materializes, or any other underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, estimated, projected, or intended.

Contact Information

  • For further information, please contact:

    Wolfgang Rauball
    CEO
    EuroGas, Inc.
    Telephone: (212) 618-1274