annual report and debt restructuring

I just went though the annual report just published last week

Couple of comments on the report:

1/ As an ex auditor myself, I believe the auditors will not have signed off on the accounts if they did not have enough evidence that that binding agreements were on the table to clear this issue (especially now that Deloitte is the auditing firm)

2/ on pages 19-20 of the annual report, in the going concern there is a clear mention that the auditors have seen offers that are binding enough for them to sign off on the going concern.

"The Directors believe that to be appropriate for the following reasons:
?At the date of this report the Directors remain actively engaged in negotiations with several parties for the
disposal of all or part of the consolidated entity?s interest in Gazonor S.A. As at the date of this report, the
Company is in receipt of an offer for the sale of Gazonor S.A. The draft terms of the offer would ensure the
Notes would be settled in their entirety by 31 December 2010.
The Directors anticipate reaching a commercially acceptable outcome and executing an agreement (which
may require shareholder approval) by 30 November 2010 "

3/ what I read from these going concern notes is that several parties are willing to buy 100% or part of Gazonor for a valuation of EUR38m or more and that European Gas will announce the final terms to the market by the end of November.

4/ If I read it correctly this is amazing news since this basically mean that European Gas will be able to get EUR38m or more for an asset paid EUR26m 3 years ago and that we, shareholders, won?t suffer any dilution at the European Gas level which is an extremely, extremely positive outcome for us shareholders.

5/ It also means EGL will get entirely or partially rid of the boring CMM asset (I believe this asset does not have any great upside) and focus EGL efforts and capital to develop the unconventional concepts in Europe where the real upside for this company is in my view.

Bartom