Transeuro Energy Corp.

Transeuro Energy Corp.

September 25, 2009 11:14 ET

Transeuro Energy Corp.: Final Settlement of Ukraine Joint Venture Dispute

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 25, 2009) - Transeuro Energy Corp. ("Transeuro" or the "Company") (TSX VENTURE:TSU)(OSLO:TSU) announces that the Company has signed final and binding Agreements with Rohol-Aufsuchungs Aktiengesellschaft ("RAG") to settle the dispute pertaining to the purported withdrawal by RAG from the joint venture company 'Scythian Energy BV'. The final agreements are consistent with the 'Term Sheet' that was disclosed in the announcement on September 1st.

The salient points of the Settlement Agreement include:

- The global mutual release from all accrued rights and obligations with regards to the joint venture operations in Ukraine, including the claim raised by RAG for repayment of USD 13,473,403 plus interest and Transeuro's potential counterclaim for costs, losses and damages. No cash payments are required between the Parties to settle the dispute.

- The transfer of RAG's 50% shareholding in Scythian Energy BV to Transeuro has been completed for a nominal charge of one Euro and Transeuro now owns 100% of the shares in Scythian Energy BV and full title to the Ukraine assets.

- The granting by Transeuro to RAG of a Call Option for 12.5% of the shares in Scythian Energy BV. The Call Option is valid until the Company (or other third party investor or farm in parties) have invested a further USD 70 Million in Scythian Energy BV, its subsidiaries, and the Ukrainian assets. The Call Option is backed by a pledge by Transeuro on 12.5% of Scythian Energy shares in favour of RAG.

- At any time prior to the exercise of the Call Option by RAG, Transeuro shall be entitled to buy back RAG's Call Option for the purchase price of USD 13,473,403 plus interest.

- Transeuro shall be entitled to divest, pledge and/or mortgage up to 87.5% of the shares in Scythian Energy BV to any third party without requiring any prior approval from RAG and on such terms as may be negotiated by Transeuro.

- RAG has agreed to pay a sum of USD 400,000 by no later than 31st December 2009 to retain the Povorotnoye 'Joint Activity Agreement' assets within the Scythian Energy JV structure, otherwise Transeuro will have 100% beneficial rights to the Povorotnoye JAA.

- The arbitration proceedings at the ICC have been terminated by both parties.

David Worrall, President and CEO of Transeuro commented, "Final settlement of the dispute with RAG will now enable Transeuro to resume activity in Ukraine. We are pleased that RAG have retained an interest in Scythian as this emphasizes the attractiveness of our Ukraine assets to European focused energy groups regardless of the general economic situation affecting the country. As previously stated, our preferred route going forward is to attract new partners to assist in the cost of developments up to the point where the Ukraine assets are cash positive."

Transeuro Energy Corp. is involved in the acquisition of petroleum and natural gas rights, the exploration for, and development and production of crude oil, condensate and natural gas. The Company's properties are located in Canada, Armenia, and Ukraine. In addition, the Company owns shares in Eaglewood Energy Inc. and holds a back-in option to their exploration licenses.

On behalf of the Board of Directors

Aage Thoen, Chairman

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.

The TSX Venture Exchange and Oslo Bors have not reviewed, and do not accept responsibility for the adequacy or accuracy of the content of this news release.

Contact Information

  • Transeuro Energy Corp.
    David Parry
    +1 604 6813939
    Transeuro Energy Corp.
    Karen Jenssen
    +47 91 729787