Eurogas acquires large deposits via OMVJ
June 12, 1997 Eurogas has acquired all of the issued and outstanding shares of OMV Exploration (OMVJ). Eurogas
purchased OMVJ from Austria's largest industrial concern, OMV Group AG, in exchange for a $ 6,000,000 cash payment
and a 5 % net profits interest.
OMVJ's primary asset is a 50 % working interest in the TAKT Joint Venture with Sakhaneftegaz, the Republic of
Yakutia's national oil company (Yakutia is located in the eastern part of the Russian Federation). Sakhaneftegaz is
responsible for all oil and gas activities in Yakutia. OMVJ controls TAKT because it names the Chairman of the Board
of the JV, who casts the deciding vote on all major decisions. Yakutia, with a population of 1,100,000 people and a
land area of 3,100,000 sq km is extremely rich in natural resources: 43 % of its GDP is derived from the production
of natural resources.
TAKT is developing proven oil and gas reserves and exploring for new oil and gas deposits on two large exploration
blocks located near the city of Lensk. The two blocks encompass approximately 21,300 sq km. Since the formation of
TAKT six years ago, OMVJ has performed extensive exploration work on the two blocks and TAKT is in possession of
4,502 km of seismic and data on 18 previously drilled wells. According to OMV, TAKT's blocks could contain as much as
9 to 18 tcf of natural gas and up to 370 mmb of recoverable oil and condensate.
TAKT owns the right of first refusal on any future oil and gas exploration venture in Yakutia. As a result, Eurogas
is in a strategic position to control the future exploration and development of Yakutia's vast oil and gas reserves.
To date, 18 oil and gas fields have been discovered in Yakutia. OMV estimates that reserves on the ten fields for
which data is available amount to 35 tcf and 1.3 bnb of oil. The US Geological Service has rated Yakutia's
hydrocarbon potential at between 2 and 15 bnb of oil and between 70 and 278 tcf.
Since Yakutia's hydrocarbon reserves by far exceed domestic demand, a plan to export the Republic's natural gas to
the Korean and possibly Chinese and Japanese markets is being considered. Recently, a South Korean consortium
conducted a $ 10,000,000 feasibility study to investigate commercial and technical options for the export of 1.05 tcf
to 1.225 tcf annually. The South Korean Minister for Energy and Resources has estimated Yakutia's gas potential at
350 tcf, and has also publicly stated that Yakutia will be a "key source of Korean gas into the next century."
Separately, Eurogas announces that it recently completed an equity financing in Europe for gross proceeds of $
15,000,000 and net proceeds of $ 13,500,000.
Eurogas controls major gas concessions in Poland and has oil and gas exploration and development joint ventures in Slovakia, the Czech Republic and Yakutia.
