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Eurogas Corporation: News Release

August 20, 2008

CALGARY, ALBERTA--(Marketwire - Aug. 20, 2008) - Eurogas Corporation ("Eurogas" or the "Corporation") (TSX VENTURE:EUG) announced its financial results for the three months ending June 30, 2008. The Corporation ended the quarter with working capital of $91.6 million. The increase in working capital was due to the receipt of funds from the April 24, 2008 rights offering, amounts due from Escal UGS S.L. ("Escal") that are related to the previously announced transaction with ACS Servicios Comunicaciones y Energia, S.L. ("ACS") of which $29.3 million has been received and funds received related to the previously announced farmout of the Sfax permit to Delta Hydrocarbons B.V. ("Delta"). The Corporation had a comprehensive loss of $1.4 million during the quarter. In Spain, the development concession for the Castor UGS Project was received on May 16, 2008, which completed the transaction signed December 20, 2007, whereby ACS increased its ownership in Escal, the Castor project operating company, to 66.67%. Accordingly, the Corporation deconsolidated Escal, which was previously included in the Corporation's consolidated financial statements, and recorded an equity investment in Escal. Subsequent to the end of the quarter, on July 10, 2008, the Corporation announced it would spin-off Eurogas International Inc. ("EII") by way of a dividend to holders of the Corporation's common shares. To effect the dividend, the Corporation exchanged its currently held common shares in EII for preferred shares and new common shares of EII and then immediately distributed the new common shares by way of a dividend-in-kind, to the holders on August 5, 2008, of the Corporation's common shares. Certificates representing the common shares of EII will be held by Computershare Trust Company of Canada until such time as a receipt for a prospectus of EII has been obtained. Each holder of the Eurogas common shares will receive one common share of EII for each five Eurogas shares held. EII will have approximately 31 million shares outstanding following the distribution. Eurogas has filed its consolidated financial statements and related Management Discussion and Analysis for the period ended June 30, 2008 with Canadian securities regulatory authorities on the System for Electronic Document Analysis and Retrieval ("SEDAR"). Eurogas Corporation is an independent oil and gas exploration company listed on the TSX Venture Exchange under the symbol EUG. The company is engaged in the development of a major underground storage facility off the east coast of Spain and the exploration and development of oil and gas in Tunisia's Gulf of Gabes. More information is available on the company website www.eurogascorp.com. Jaffar Khan, President & CEO Certain information set forth in this document, including management's assessment of the Corporation's future plans and operations, contains forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Corporation's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The Corporation's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits the Corporation will derive from there. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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