EuroGas getting share of Epic Energy, Ukranian project | Oil & Gas Journal

By the OGJ Online Staff

HOUSTON, May 16 -- EuroGas Inc., New York, Wednesday announced a deal with Epic Energy Inc., Calgary, in which EuroGas will acquire a 19.9% interest in Epic in exchange for a loan and an investment in an exploration project in Crimea, Ukraine.

EuroGas agreed to provide Epic with a $1 million (Can.) project loan and agreed to invest $1 million (Can.) in exchange for 50% interest in Epic Energy's Uzunlarskaya exploration project.

Following completion of due diligence, EuroGas and Epic expect to enter into definitive agreements, subject to regulatory approval. The companies expect the process to take 30 days.

EuroGas will earn a participating interest in Epic's shallow oil program as part of its agreement to fund a $1 million development loan.

Apart from its 50% interest in the first well in the Uzunlarskaya prospect, EuroGas will earn 50% participation in the prospect. EuroGas and Epic expect to spud the first well on the Uzunlarskaya prospect, in the southern Kerch Peninsula near the Black Sea coast, this summer.

In addition, EuroGas will access the services of Epic's HHO Ltd. subsidiary, which manages Epic's oil and gas operations in Ukraine. HHO will assume management of EuroGas' Ukrainian oil and gas properties.

EuroGas is an independent producer with gas concessions in Poland and oil and gas joint ventures in Canada, Poland, the Slovak Republic, and Ukraine.

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