Eurogas PR The wolf is howling 1% REVEuroGas Enters Into Memorandum of Understanding With Galizien Energy to Drill and Develop Coal Bed Methane Gas Properties in Ukraine
Ticker Symbol: U:EUGS X:XETRA:EUG X:FRANKFURT:EUG ?:HAMB:EUG ?:STUT:EUG
EuroGas, Inc. (EuroGas) (PINKSHEETS: EUGS) (FRANKFURT: EUG) (XETRA: EUG) (HAMB: EUG) (STUT: EUG) today announced that it has entered into a Memorandum of Understanding (MOU) with Galizien Energy Corp., a closely held, Toronto-based private oil & gas company, to develop certain Ukrainian coal bed methane gas properties (CBM properties) owned by EuroGas and its Ukrainian partners. The CBM properties in Ukraine consist of coal bed methane permits in East Ukraine, as well as an interest in a revitalization program of up to approximately 2,000 plugged and shut-in natural gas wells, which are also located in Eastern Ukraine.
The MOU, which is binding and is expected to lead to a definitive agreement upon receipt of further documentation, calls for Galizien to spend up to US $5.000.000 in the first stage in connection with the drilling of the first 10 new coal bed methane wells on the East Ukrainian CBM Properties held by EuroGas Ukraine (a Ukrainian private company equally owned by EuroGas GmbH and OJSC NT Technologies of Kiev); reservoir and core evaluation; and completion of the wells in order to earn a 33% undivided working interest in the CBM Properties. Galizien and EuroGas will be mutually responsible together with EuroGas Ukraine for choosing all well locations in East Ukraine for all of the operations associated with the work program.
The work completion program will consist of the drilling of 10 new wells to the appropriate coal bed methane formations, of which a minimum of two well locations shall be selected to include coring, logging and respective laboratory rock evaluation work. The following completion program will consist of the application of Galizien's licensed proprietary enhanced oil recovery technology, known as SRS (short radius stimulation) hydra-jetting technology, including the application of Siloxane fluids (SRS Process), in connection with the completion of the wells. Galizien will be responsible for the operations associated with the drilling, completion and application of the SRS technology.
Mr. Wolfgang Rauball, Chairman and CEO, EuroGas, said, "Our partnership will Galizien and its COO, Dr. David Kahn, is expected to fast-track the development of our considerable CBM properties, starting with Eastern Ukraine. We will immediately begin reviewing our trove of technical data and start scouting well sites: we expect to begin drilling as early as fall 2010."
Dr. David Kahn commented on the partnership with EuroGas, "We are extremely excited to have become involved with EuroGas and OJSC NT Technologies in this prime, critical mass land package which has seen substantial historical production. Those companies have together done an extremely impressive job of putting together this major block of CBM claims."
Dr. Kahn went on to add, "The concessions overlay a defined reservoir which we believe can be efficiently and effectively exploited, particularly with our suite of North American drilling and drilling re-completion technologies. We look very much forward to beginning work alongside our partners on the rehabilitation of some of the 2,000 formerly producing wells, adding new drilling, and moving rapidly towards production."
As regards EuroGas and Total, Mr. Rauball said, "On a separate track, we continue to work closely with respect to our Western Ukrainian shale gas activities with Total E&P Activit?s P?troli?res (Total), a wholly owned subsidiary of Total S.A., one of the world's largest oil companies, with whom we have signed a previously announced confidentiality agreement in connection with the evaluation and possible acquisition by Total of certain rights held by EuroGas Polska's wholly owned West Ukrainian subsidiary in an onshore region in Western Ukraine, as well as the Bieszczady concession in Poland, in which EuroGas owns a 24% interest."
"The tremendous amount of press coverage on the potential that European shale gas has received in Poland and Ukraine is well merited," said Mr. Rauball, EuroGas. "While the shale gas revolution has vaulted the United States into first place among global gas producers, we believe that European shale gas has an even brighter future due to higher gas prices in Europe; reduced transportation costs resulting from shorter distances from the wellhead to end markets; greater accessibility to gas pipelines; a more mature geological rural landscape that might prove to be even more productive due to substantially thicker shale gas bearing formations than in the U.S.; and higher associated natural fracturing."
About Galizien/Dr. David Kahn, COO
Galizien Energy Corp. is a new company formed specifically to address the energy opportunities present in the Ukraine. Its principals have extensive experiece in reservoir engineering and technology as well as the international capital markets. Galizien is intent on becoming a major new producer of conventional and unconventional natural gas in Eastern Europe. Dr. David S. Kahn has in excess of 17 years' experience in the oil and gas industry having served in senior roles for Halliburton Energy Services, Baker Hughes and Weatherford PPG. From 1998 to present, he has pursued actively the commercialization of various unconventional assets both in the Lower 48 and internationally. His accomplishments include being a principal of Ensyn Petroleum which was sold to Ivanhoe Energy, a large heavy oil project (6+ Billion Original Oil In Place -- OOIP) in West Texas (San Miguel reservoir) that was later sold to Pearl Exploration & Production, a new independent USA heavy oil company Megawest Energy with in excess of 3 B OOIP and Gastem, a 5+ Trillion Cubic Feet in situ shale gas company in Quebec. He graduated from with a PhD of Engineering from ?cole nationale sup?rieure du p?trole et des moteurs (now IFP School) (Paris).
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 and gold, silver mining assets in Tombstone, Arizona, USA. 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)