Eurogas International Inc. says that, together with its Joint Venture partner, Atlas Petroleum Exploration Worldwide Ltd. (APEX), it has reached an agreement with Delta Hydrocarbons B.V. (Delta) with respect to Delta's previously expressed desire to exit from the Joint Venture and the related agreements pertaining to the farmout of the Sfax Exploration Permit and the Ras El Besh Concession in Tunisia. Prior to exiting the Joint Venture, Delta had expended approximately US $110 million on the project.

Under the Agreement, Delta will reassign its 50% participating interest in the Sfax Exploration Permit and the Ras El Besh Concession and transfer its shares in Innovative Productions Services Limited ("IPS") to the remaining Joint Venture partners, including EI. In exchange, Delta will be entitled to a portion of certain payments, when received by the Joint Venture, including a share of the proceeds from the Cost Oil portion of any future production revenues and a share of the proceeds from any sale or lease of assets, to a maximum of US $20 million. Delta remains committed to fund 50% of any costs associated with the abandonment of the REB-3 well until December 9, 2011.

The reassignment of Delta's participating interest is subject to the approval of the Tunisian regulatory authorities. On completion of such reassignment, EI's participating interest in the Sfax Exploration Permit, Ras El Besh Concession and IPS will be 45% and APEX's participating interest will be 55%.

The Joint Venture is continuing with its re-evaluation work on the Sfax Permit, including reprocessing seismic data covering the El Garia and Reneiche formations in the Ras El Besh Concession area and north. Upon completion of the seismic reprocessing the Joint Venture partners will consider a revised work program.

Tags: Eurogas International Inc.