EI Eurogas International Inc

Eurogas International Inc. ("Eurogas International" or the "Corporation")
(CNSX:EI) today announced its financial results for the year ended December 31,
2010.


During 2010, the Corporation incurred a net loss of $2.2 million, or
approximately $0.07 per share. This compares with a net loss of $3.9 million, or
$0.12 per share in 2009. During the fourth quarter of 2010, and as a result of
the recovery of $0.6 million in legal expenses from the settlement of the
litigation with Seawolf (see below), the Corporation earned income of $7,743.
This compares with a net loss of $1.2 million incurred during the fourth quarter
of 2009.


RECENT EVENTS

On January 18, 2011, the Corporation announced that, together with its joint
venture partner, it has declared a condition of a Force Majeure with respect to
the Sfax Permit and Ras-El-Besh concession. The Corporation and its joint
venture partner believe that the current political uncertainty and civil unrest
in Tunisia, which have resulted in the collapse of the government, a declaration
of a state of emergency and serious civil disturbance, adversely affects their
ability to continue their exploration and evaluation activities. Eurogas
International believes that the declaration of a Force Majeure will temporarily
suspend activities while the conditions resulting in the Force Majeure continue.
It is anticipated that the Force Majeure declaration will result in an extension
of the term of the Sfax Permit and Ras-El-Besh concession for a period of time
equivalent to the time that activities were suspended as a result of the Force
Majeure. Once the situation in Tunisia is resolved, exploration and evaluation
activities will resume.


BUSINESS DEVELOPMENTS

The Offshore Sfax Exploration Permit

During 2010, the Corporation completed the reprocessing and mapping of four 3-D
seismic surveys on the Sfax Permit. These surveys include a 340 km2 seismic
program over the Ras-El-Besh and Jawhara prospects, as well as a 460 km2 seismic
program over the Kerkennah Banks and a 60 km2 3-D seismic program over the
Salloum structure. Selected 2-D seismic lines have also been reprocessed. The
Corporation and its joint venture partner are currently using the reprocessed
data to remap the prospects and leads in order to determine a future course of
action.


Ras-El-Besh Concession

In 2009 and upon completion of drilling and testing the REB-3 well, the joint
venture partners requested and received approval from the Tunisian government to
temporarily suspend the well, providing the Corporation with sufficient time to
determine whether to reenter or abandon the well. During the fourth quarter of
2010, the joint venture concluded that it would proceed with abandoning the
well. Work is expected to begin in the first quarter of 2011, with completion
expected in the fourth quarter of the year.


Mobile Offshore Production Unit

The Corporation holds a 45% interest in a mobile offshore production unit
("MOPU"), which was acquired with the expectation of producing, processing and
transporting oil on certain development concessions on the Sfax Permit. The
joint venture partners are currently evaluating alternative usage of the MOPU,
including actively seeking opportunities for monetization of the asset through a
possible sale or lease arrangements.


The Seawolf Litigation

In 2009, APEX, on behalf of the joint venture partners, commenced arbitration
proceedings against Seawolf under the rules of the London Court of International
Arbitration, seeking damages for misrepresentations and breach of contract in
respect of the drilling of the REB-3 well on the Ras-El-Besh concession. In May
2010, the parties reached a settlement agreement that provides for a US$12
million payment to the joint venture over an 18-month period. The settlement
amount is secured by a letter of guarantee issued by a recognized international
bank.


During the year ended December 31, 2010, the Corporation received cash of $2.1
million (US$2.1 million) and recognized further amounts receivable of $1.5
million (US$1.5 million), as its share of the expected settlement proceeds.


2010 EXPENDITURES - TUNISIAN ASSET POOL



----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                     2010                              2009 
               -------------------------------------------------------------
For the year                    Seawolf     Seawolf                         
 ended December         Cash Settlement  Settlement                         
 31,            Expenditures   Proceeds Outstanding       TOTAL       TOTAL 
----------------------------------------------------------------------------
Opening balance                                     $21,175,897 $17,819,331 
Transactions                                                                
 during the                                                                 
 year                                                                       
 Sfax Permit       2,026,079          -           -   2,026,079   1,880,051 
 Ras-El-Besh                                                                
  expenditures,                                                             
  net                494,993 (1,087,316) (1,491,900) (2,084,223)    (81,615)
 Mobile                                                                     
  offshore                                                                  
  production                                                                
  unit "Ocean                                                               
  Patriot"           856,581   (504,274)          -     352,307   1,558,130 
----------------------------------------------------------------------------
Closing balance                                     $21,470,060 $21,175,897 
----------------------------------------------------------------------------
----------------------------------------------------------------------------



The Corporation's proportionate share of costs associated with the Sfax Permit
are capitalized as part of its exploration and evaluation asset pool. During
2010, an aggregate of $3.4 million (2009 - $3.4 million) was capitalized to the
Tunisian asset pool, including Ras-El-Besh expenditures and expenses relating to
the renovation and upgrade of the MOPU. Capitalized amounts were reduced by $3.1
million relating to the settlement of the litigation with Seawolf.


WORK PROGRAM FOR 2011

In the fourth quarter of 2010, the joint venture submitted its proposed 2011
work program for the Sfax Permit and the Ras-El-Besh development concession for
approval by the Tunisian regulatory agency. Aggregate expenditures in 2011 are
estimated at approximately US$25 million, of which the Corporation is
responsible for its net share of approximately US$8.1 million.


Included in the 2011 work program is an estimated US$10.9 million relating to
the costs of abandoning the REB-3 well. The actual costs of abandonment will
depend on several factors, including the mobilization and demobilization costs
of a rig. The Corporation currently estimates that its share of these costs will
be approximately US$1.8 million. The remaining costs in the 2011 work program
relate to the assessment of prospects and drilling of an exploration well to
satisfy the commitment required in order to retain the joint venture's interest
in the Sfax Permit. The joint venture will complete geological, geophysical and
engineering analyses to evaluate both the Salloum and Jawhara oil prospects as
future drilling candidates. The Salloum structure is located in the northeast
corner of the Sfax Permit in shallow waters adjacent to the city of Sfax and is
adjacent to two producing oil fields that produce from the same targeted
formation. Geotechnical studies indicate that the prospect may be drilled from
an onshore location.


The Jawhara structure is located in the center of the Sfax Permit in
approximately 28 metres of water. Seismic interpretation has identified a large
north south elongated structure with the Cretaceous Bireno formation being the
primary prospect. Costs relating to these activities, including costs of
drilling, are estimated at US$14.1 million, of which the Corporation's expected
share is US$6.3 million.


LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2010, the Corporation had cash and short term investments of
$1.1 million compared with cash and short term investments of $4.2 million at
December 31, 2009. The Corporation's current cash resources are insufficient to
meet its planned 2011 work program. The Corporation is actively pursuing
alternative financing options, including debt or equity issuances, potential
farmout arrangements, and monetization of certain assets. There can be no
assurance that the Corporation will be successful in these initiatives.


ABOUT THE CORPORATION

Eurogas International Inc. is an independent oil and gas exploration company
listed on the Canadian National Stock Exchange under the symbol EI. Eurogas
International has filed its financial statements and related management's
discussion and analysis for the period ended December 31, 2010 with the Canadian
securities regulatory authorities on the System for Electronic Document Analysis
and Retrieval ("SEDAR"). All documentation may be viewed under the Company's
profile on SEDAR (www.sedar.com), the company website at
www.eurogasinternational.com, or by contacting Eurogas International. For more
information about Eurogas International please visit the Listings Disclosure
Hall at www.cnsx.ca.


FORWARD LOOKING STATEMENTS

Certain information set forth in these documents, including management's
assessment of each of the Corporation's future plans and operations, contains
forward-looking statements. Forward-looking statements are statements that are
predictive in nature, depend upon or refer to future events or conditions or
include words such as "expects", "anticipates", "intends", "plans", "believes",
"estimates" or similar expressions. 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 them. 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, except as required by
law.

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