Eurogas Corporation's Board of Directors has approved a restructuring plan that will allow 100% of the common shares of its wholly owned Barbados subsidiary - Eurogas International - to be distributed as a dividend to all shareholders on a pro rata basis of one Eurogas International common share for each five Eurogas Corporation common shares held.
Eurogas International's sole assets will be cash of approximately $10 million and its 45% interest in the one million off-shore acreage (Sfax) oil and gas exploration venture in Tunisia, which is currently being funded by Delta Hydrocarbons B.V. (Delta). Delta has committed to spend US $125 million to earn a 50% interest in the Sfax permit. The current work program agreed to by the partners includes the drilling of up to four wells.
The first well, which is an appraisal well on the Ras El Besh structure, is currently being drilled. To date, Delta has spent approximately US $30 million, including reimbursement of past expenditures and on current drilling. Subsequent to Delta fulfilling its commitment, Eurogas International's interest will be 22.5% and the Company will participate as to 22.5% of further expenditures on the Sfax permit.
The objective of splitting Eurogas into two separate publicly traded companies is to enhance shareholder value. Eurogas International will have approximately 32 million shares outstanding.
All required regulatory approvals for the restructuring and dividend plan, including a listing of the shares of Eurogas International, are being sought. Shareholders will receive a prospectus and further details as soon as they are available. It is the intention of Eurogas that this distribution will be done on a tax efficient basis for all shareholders and the Company.
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