Eurogas Begins Operations on the Jorf Prospect in Tunisia

Eurogas has commenced drilling operations on its 20% interest Jorf exploration permit in Tunisia. The well, Jorf-1, will be drilled to a depth of 2,300 m to evaluate a large Triassic TAGI sand prospect identified by Eurogas. Jorf-1 is the second well to be drilled in the Corporation's ongoing Triassic exploration program in the southern portion of Tunisia and is a follow-up to the Eurogas Douz-1 well, located 32 Km to the northwest, drilled in June 2001. Although Douz-1 confirmed the presence of a thick TAGI sand, the well was abandoned after failing to test commercial quantities of hydrocarbons.

Since 1998, Eurogas has processed and interpreted over 8,400 Km of seismic data defining a series of prospects lying within the TAGI sand trend which extends northeast out of Algeria's Berkine basin. Over the past ten years, the Berkine TAGI sands have proven to be extremely prolific with over four billion barrels of recoverable oil reserves discovered to date. To help finance its ongoing exploration program, in 2001 Eurogas invited Pioneer Natural Resources, a large Dallas-based independent E & P company, to join in its program. Under the terms of a participation agreement, Pioneer is required to spend, on behalf of Eurogas, $US 5.2 million in drilling costs to earn a 50% interest in the three Eurogas permits, Bazma, Jorf and El Hamra, which cover an area of 11,420 square Km. To date, half of this amount has been spent.

Eurogas retains a 20% working interest in the Jorf Permit and 50% working interest in the Bazma and El Hamra permits. The Tunisian national oil company, ETAP, has a right to participate up to 50% in the development of any oil and gas discovery and its share of pre-development costs will be recovered out of its share of production.