Eurogas International Inc. Announces 2013 Financial Results
TORONTO, ONTARIO -- (Marketwired) -- 01/30/14 -- Eurogas
International Inc. (CSE: EI) ("Eurogas International" or the
"Corporation") today reported its 2013 financial results. The
Corporation's audited financial statements, along with the
accompanying management's discussion and analysis have been filed on
the System for Electronic Document Analysis and Retrieval ("SEDAR")
and may be viewed by interested parties under the Corporation's
profile at www.sedar.com or the Corporation's website at
During the year ended December 31, 2013, the Corporation incurred a
net loss of $2.1 million (2012 - $2.1 million), or a loss of
approximately $0.07 per share (2012 - $0.07 per share).
Farmout Agreement with DNO Tunisia AS
In June 2013, the Corporation and its joint venture partner, Atlas
Petroleum Exploration Worldwide Ltd. ("APEX" and, together with the
Corporation, the "Original Contractors") entered into negotiations to
complete a farmout agreement with DNO Tunisia AS, a subsidiary of DNO
International ASA, in respect of the Sfax Permit. The farmout
agreement with DNO (the "DNO Agreement") provides for DNO acquiring
an 87.5% working interest in the Sfax Permit in exchange for a US$6
million cash payment to the Original Contractors, and the carrying of
100% of all future costs associated with the Sfax Permit, including
the associated drilling commitments. DNO will assume operatorship of
the Sfax Permit under the terms of the DNO Agreement. The DNO
Agreement was completed on January 17, 2014, whereupon the
Corporation received US$2.7 million, representing its 45% interest of
the US$6.0 million cash payment received from DNO.
Under the terms of the DNO Agreement, the Original Contractors will
be entitled to 12.5% of the profit oil or profit gas component of
production from the Sfax Permit, to a maximum of US$125 million (or
12.5% of the profit oil or profit gas from the production of 75
million barrel of oil equivalents, whichever comes first).
Thereafter, the Original Contractors are entitled to 6.25% of the
profit oil or profit gas component of production from the Sfax Permit
to a maximum of an additional US$75 million (or 6.25% of the profit
oil or profit gas component from the production of an additional 45
million barrel of oil equivalents, whichever comes first). The
Corporation is entitled to 45% of any payments made to the Original
Contractors under these arrangements.
The Original Contractors have conceded a temporary deferral of 50% of
their entitlement to a share of the profit oil or profit gas
component of production from the Sfax Permit, as outlined above,
until such time as DNO recovers $150 million of total incurred costs,
including costs to be incurred by DNO subsequent to completion of the
DNO Agreement, from the cost oil or cost gas component of production
on the Sfax Permit.
In addition to their entitlement to a share of the profit oil or
profit gas, the DNO Agreement also provides the Original Contractors
with entitlement to receive 20% of the cost oil or cost gas component
of production from the Sfax Permit, to a maximum of the lesser of 18%
of the costs incurred by the Original Contractors prior to completion
of the DNO Agreement, or US$20 million.
Under the terms of the DNO Agreement, and with the approval of the
Tunisian authorities, DNO has contractually assumed full
responsibility for completion of the drilling obligations associated
with the Sfax Permit, including any compensatory payments that may
arise as a result of non-compliance. In that regard, DNO has provided
a full guarantee to the Tunisian governmental authorities.
Certain information set forth in this document, including
management's assessment of the Corporation's future plans and
operations, contains forward-looking statements. Forward-looking
statements are statements that are predictive in nature, depend upon
or refer to future events or conditions or include words such as
"expects", "anticipates", "intends", "plans", "believes", "estimates"
or similar expressions. By their nature, forward-looking statements
are subject to numerous risks and uncertainties, some of which are
beyond the Corporation's control, including risks of not being able
to obtain or renew permits and licenses, the inability to access
sufficient capital from internal and external sources, risks
associated with foreign operations, the impact of general economic
conditions, currency fluctuations, exploration and development risks,
reliance on key personnel and management, risks relating to the
abandonment of operations, environmental risks, and competition from
other industry participants. Readers are cautioned that the
assumptions used in the preparation of such information, although
considered reasonable at the time of preparation, may prove to be
imprecise and, as such, undue reliance should not be placed on
forward-looking statements. The Corporation's actual results,
performance or achievement could differ materially from those
expressed in, or implied by, these forward-looking statements and
accordingly, no assurance can be given that any of the events
anticipated by the forward-looking statements will transpire or
occur, or if any of them do so, what benefits the Corporation will
derive from them. The Corporation disclaims any intention or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by law.
ABOUT EUROGAS INTERNATIONAL
Eurogas International Inc. is an independent oil and gas exploration
company listed on the Canadian Securities Exchange (www.cnsx.ca)
under the symbol EI.
All documentation in respect of the Corporation may be viewed under
the Corporation's profile on SEDAR (www.sedar.com) or under the
Corporation's website at www.eurogasinternational.com.
Eurogas International Inc.
c/o Dundee Corporation
1 Adelaide Street East
Toronto, ON M5C 2V9
Jaffar Khan, President & CEO
Telephone: (403) 264-4985
Telefax: (403) 262-8299
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