Transeuro Energy Corp.
TSX VENTURE : TSU

Transeuro Energy Corp.

February 01, 2006 15:15 ET

Transeuro Announces Acquisition in Ukraine

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Feb. 1, 2006) - Mr. Hal Hemmerich, President and CEO of Transeuro Energy Corp. (the "Company", "Transeuro") (TSX VENTURE:TSU) reports on acquisition activities in Ukraine.

Transeuro has completed the acquisition of the Ukrainian company 'Pivdenspetsbud', holder of Joint Activity Agreements ("JAA") for the development of the Povorotnoye gas field and the Vladislavovskoye oil field, both located in Eastern Crimea, Ukraine. Transeuro paid US$ 650,000 in consideration for 100% of the corporate rights of Pivdenspetsbud. The JAA partner with Pivdenspetsbud and holder of the Petroleum license is 'Crymgeologia', with whom Transeuro also holds a JAA for the development of the Krasnapolianskoye and Karlovskoye gas fields in Western Crimea. The JAA for Povorotnoye and Vladislavovskoye provide for 72% of JAA profits to Transeuro during the investment phase and 60% thereafter, after deduction of all royalties, operating and capital expenses and taxes. Ukrainian profit tax is currently 25%.

The Povorotnoye field is 8.5 by 2.5 kilometers ("km") in size with the gas bearing horizons located at a depth of approximately 3,800 metres ("m"). The field is delineated by 2D seismic and by seven appraisal wells drilled in the late 1980's that confirmed gas in the Maykop M3 and M4 reservoir intervals. Two wells produced commercial gas rates to surface, however all the wells were abandoned and the field was not put into production. Plans are being prepared to commence drilling the first production well on the crest of the structure and to shoot 3D seismic over the area.

The Vladislavovskoye field consists of a series of three small anticlines over an area of approximately 9 by 2 km, with the oil bearing horizons located at a depth of approximately 700m. The three anticlines are delineated by 2D seismic and twenty-five wells drilled from the 1950's onwards with numerous wells encountering oil across 36m of net reservoir sand. Well 18 originally tested over 200 barrels of oil per day and is still producing. Plans are being prepared to commence drilling of a number of production wells to confirm reservoir and fluid properties and to confirm the extent of the reservoir over the three anticlines.

Mr. Hemmerich stated that the acquisition is an important development for Transeuro as the addition of the two fields furthers Transeuro's efforts to become a future gas supplier and oil producer in the Ukraine, at a time when local gas supplies are receiving considerable national and international attention. Recent changes in the price of imported gas into the country has considerably strengthened the domestic gas market and significantly enhanced the profitability of these and associated projects.

Expanding the development program will also allow High Arctic Energy Services, who supply personnel and services to Transeuro under a global Integrated Project Management (IPM) agreement, to immediately mobilize drilling rigs and associated equipment to the region to commence the development operations.

The statements contained in this release that are not historical facts are forward-looking statements, which involve risks and uncertainties that could cause actual results to differ materially from the targeted results. The Company relies upon litigation protection for forward-looking statements.

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

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