EuroGas Issues Newsletter Update to Shareholders
Feb 5, 2009 1:46:00 PM
NEW YORK, NY -- (MARKET WIRE) -- 02/05/09 -- Eurogas, Inc. (PINKSHEETS: EUGS) (FRANKFURT: EUG) (XETRA: EUG) (HAMB: EUG) (STUT: EUG) today issued a newsletter to shareholders which outlines recent events at the company:
Dear EuroGas Shareholders,
In December 2008, we wrote to you about our intentions of issuing a EuroGas Newsletter, whose purpose would be to keep you apprised of our activities on a regular basis. Below you will find the first edition of this Newsletter. Although we live in the most trying economic climate in our lifetimes, we adhere to the notion that, "Crisis brings opportunity," and are resolute in taking advantage of opportunities that we are unlikely to ever see again. This approach is the key to unlocking the uncommon values that the world economic dislocations have presented us.
1. Poland
During the last quarter of 2008 Poland's national oil and gas concern, PGNiG SA (Polish Oil & Gas) commenced a comprehensive seismic program on the 3,481 square kilometer Bieszady concession area in southeastern Poland. The Bieszady concession is the former EuroGas Polska concession, which EuroGas Polska transferred in 2006 to a newly structured Joint Venture Agreement (JOA), with PGNiG as operator, owning 51% of the JOA, Aurelian Oil & Gas, a publicly held UK oil and gas concern owning 25% and EuroGas Polska holding a 24% interest.
The purpose of the current seismic program undertaken by PGNiG is to detect new hydrocarbon structures in addition to the approximately 300 Million Barrels of Oil Equivalent (BOE) potential that was reported in Poland's Ministry of Environment's Annual Report. The entire area is currently the subject of a number of very active drill programs by several oil companies. Immediately adjoining the western border of the concession area, RWE-DEA, a subsidiary of Germany's utility giant RWE, has reported several oil discoveries. PGNiG itself has made a large natural gas discovery on the northeastern flank with a reported 2.5 TCF (Trillion cubic feet) of natural gas.
Initial analysis of PGNiG's recent seismic program on the Bieszady concession is encouraging; the company will give a more detailed account of the findings as soon as the analysis of the seismic data is completed.
2. Slovak Republic
The company has accelerated its legal efforts to have the Slovak Republic's Ministry of Economy's Mining Office at Spisska Nova Ves return the mining concession at Gemerska Poloma to its lawful previous owner Rozmin s.r.o., a Slovak mining company in which EuroGas owns or has agreements to acquire a 90% interest. These efforts were made possible after the Supreme Court of the Slovak Republic (the highest court in the country) decided that the cancellation of Rozmin's valid mining concession by the Spisska Nova Ves Mining Office was in violation of Slovak civil and constitutional law. The company and its Austrian subsidiary, EuroGas GmbH, plan to bring the huge Gemerska Poloma talc ore body into commercial production once the concession is returned to Rozmin by the Slovak government.
In an initiative to regain physical control and ownership of the deposit, the company has contacted with the Minister of Economy of the Slovak Republic, The Honorable Dr. Lubomir Jahnatek, and has informed him in detail about the illegal, and in the opinion of the company, corrupt practices of some of the Ministry of Economy's officials. The independent Anti-Corruption Police of the Slovak Republic is investigating this matter separately at this time, in addition to certain investigative Anti-Corruption agencies of the European Commission in Brussels. The Slovak Republic is a full Member of the European Union. Any full Member of the EU must abide by the laws and constitution of the European Union.
Based upon the recent favorable decision of the Supreme Court of the Slovak Republic, the company has recently asked its legal counsel in the United States and Austria to decide whether it should file suit for damages in the USA and Europe against those government officials which were involved in the conspiracy of cancelling Rozmin's mining license in late 2004.
The Gemerska Poloma talc deposit near Roznava in Central Slovakia ranks amongst the largest and purest industrial mineral deposits of its kind in the world. The company and its solicitors are confident that the Slovak Government will return, in a timely manner, the concession at Gemerska Poloma back to its lawful owner Rozmin based on the non-appealable decision of the Highest Court of the Slovak Republic in favor of Rozmin s.r.o.
Accordingly, the company therefore has initiated discussions with a large European talc refining concern to enter into a long-term sales contract of Rozmin's talc products.
3. Ukraine
As previously announced in July 2008, the company entered into a Memorandum of Understanding (MOU) with OJSC ZNVKIF New Technologies (ZNT) of Kiev, Ukraine, a wholly owned subsidiary of one of Ukraine's largest Industrial Holding Groups. The MOU's purpose was to form a Ukrainian Joint Venture Company for the purpose of exploring certain Coalbed Methane (CBM) license areas to be farmed into the JV company by ZNT; and, to rework a large number of plugged and abandoned former producing natural gas wells located in Ukraine. These wells were shut-in when Russia discovered extremely large natural gas reserves in Siberia over 50 years ago and opted to forego continued development and maintenance of certain Ukrainian oil and gas fields, including the ones controlled by ZNT. Current discussions between the two parties indicate that EuroGas will provide cutting edge oil and gas industry technology to the joint venture, while ZNT will provide the CBM license areas and the shut-in natural gas wells.
On December 24, 2008 the new Joint Venture company was registered as a Ukrainian Limited Company in the "Torgowy Register" (Register of Companies) of Kiev under the name of "EuroGas Ukraine." The shareholders are EuroGas GmbH Austria and ZNT which each own a 50% stake. On January 26, 2009 the joint venture obtained two new large CBM licenses from the Ukrainian government. For further information on the Ukrainian activities, please go to EuroGas Inc.'s website at www.eurogas-inc.com.
4. Beaver River Natural Gas field in British Columbia, Canada
Through its wholly-owned Canadian subsidiary, Beaver River Resources Ltd., the company currently receives small royalty payments from natural gas production of the Beaver River natural gas-field in northwest British Columbia, Canada. The operator, Questerre Energy of Calgary, a Toronto Stock Exchange listed Canadian oil and gas company, has invested in excess of C$ 25,000,000 over the last 8 years to return the reserve-rich Beaver River gas field to commercial production. This gas field, which was owned and operated by Amoco in the late 1960's, ceased production after a massive influx of water rendered it uneconomic at the then prevailing gas prices. With estimated gas reserves of approximately 3 TCF Beaver River ranks among the largest natural gas reserves in North America.
On December 19, 2008 Questerre reported an "unexpected success" in successfully achieving substantial production at the A5 well of the Beaver River gas-field which is currently producing at daily production of 5 MMCF (Million cubic feet) or the equivalent of approximately 833 barrels of oil equivalent. For further information on the Beaver River gas-field please go to Questerre website at www.questerre.com.
5. Tombstone Mining District, Arizona, USA
In early 2008 the company entered into an agreement with Rio Plata Mining Company, a private Montana based mining company, to acquire a 60% working interest in a large gold/silver claim area with Rio Plata holding the balance of 40%. The Rio Plata claims are adjacent to Tombstone Exploration Corporation's large gold/silver claim block in the famous Tombstone mining district near the city of Tombstone, Arizona. This mining district is historically known for its rich silver/copper/gold deposits. The current high gold and silver prices warrant new exploration and resulted in EuroGas' acquisition of two million shares of Tombstone Exploration Corporation, a Canadian mining company trading on the OTC Bulletin Board.
As you can see from the above, EuroGas Inc. is very actively involved in several exciting projects in Europe, the United States of America and Canada which we believe will show positive results in the near future and create significant intrinsic shareholder value in the long term. We thank you for your continued support and look forward to success in 2009 and beyond.
Yours sincerely,
Wolfgang Rauball
Chairman & Chief Executive Officer
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.
"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.
For further information, please contact:
Wolfgang Rauball
Chairman & CEO
EuroGas, Inc.
Telephone: (212) 618-1274
