Filed by sedaredgar.com - Eurogas, Inc.

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

14 Wall Street 22^ndFloor
New York, NY
10005
(Address of principal executive offices, including Zip Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [ ] NO [X]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S–K is not contained
herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10–K or any amendment to this Form 10–K. [X]

As of December 31, 2007, the registrant had 196,212.494 shares of common stock outstanding.

This Annual Report on Form 10-K for the year ended December 31, 2007 contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve risks and uncertainties. The reader is cautioned that the actual results of EuroGas, Inc. and its consolidated subsidiaries will differ (and may differ materially) from the results discussed in these forward-looking statements. Statements considered to be forward-looking by the Company include statements in which the Company discloses its beliefs, expectations or anticipations, and statements using the words “may,” “should,” “might,” “could,” “might,” “would,” “expect,” “believe” and “anticipate.” Factors that could cause or contribute to such differences include those factors discussed herein under “Factors That May Affect Future Results” and elsewhere in this Form 10-K generally. The reader is also encouraged to review other filings made by the Company with the Securities and Exchange Commission (the “SEC”) describing other factors that may affect future results of the Company.

We are primarily engaged in the acquisition of rights to explore for and exploit natural gas, coal bed methane gas, crude oil and minerals . We have acquired interests in several large exploration concessions and are in various stages of identifying industry partners, farming out exploration rights, undertaking exploration drilling, and seeking to develop production. Unless otherwise indicated, all dollar amounts in this Form 10-K are reflected in United States dollars.

When used herein, “we”, the “Company” and “EuroGas” includes EuroGas, Inc., and its wholly owned subsidiaries, EuroGas GmbH Austria, which was sold in the summer of 2007. Any reference to other previously owned subsidiaries is no longer valid with the Bankruptcy sale early in 2006 stripping the company of certain assets.

On January 1, 1993, the Czech Republic and Slovakia emerged as separate independent nations. Slovakia is bordered on the north by Poland, on the east by Ukraine, on the south by Hungary, and on the west by Austria and the Czech Republic. Slovakia has an area of approximately 19,000 square miles and a population of approximately 5.5 million people. Slovakia is a member of the International Monetary Fund, the European Bank for reconstruction and development, and a full Member of the European Union and has announced to adopt the European Union’s common currency, the Euro, as its own currency on January 1, 2009. Bratislava is the capital of Slovakia and its largest city

Gemerska Talc Deposit. During 1998, we acquired a 24% interest in an undeveloped talc deposit located near Roznava in Eastern Slovakia through an indirect investment in Rozmin s.r.o., the owner of a mining concession via a direct 55% shareholding interest in Rima Muran s.r.o.. Oxbridge Ltd., a related party, in 1998 paid $879,000 on behalf of the Company to the Slovak owners of Rima Muran, Ing. Peter Corej, Pavol Krajec, Jan Balaz and Villiam Komora, as part of the purchase price for the 55% shareholding interest in Rima Muran s.r.o.. On March 19, 1998, we reimbursed Oxbridge Ltd. for its cash payment to Corej, Krajec, Balaz and Komora and accounted for the payment to Oxbridge Ltd. as a reduction of a separate promissory note payable to Oxbridge Ltd. In 2000, Oxbridge Ltd. made a demand for payment of the promissory note. EuroGas reclassified the payment to Oxbridge Ltd. as an increase in the cost of the 24% interest in the talc deposit and recorded the principal and $272,490 of accrued interest due under the promissory note payable to Oxbridge Ltd. In November 2000, EuroGas issued 2,391,162 shares of common stock, valued at $1,151,490, or $0.48 per share, to Oxbridge Ltd. in satisfaction of the principal and accrued interest due on the promissory note. Through December 31, 2000 and 1999, EuroGas had invested $2,376,682 (including the $879,000 paid to Oxbridge Ltd.) and an additional $915,913 (excluding the payment to Oxbridge Ltd.), respectively, in the acquisition and development of the talc deposit and related equipment as well as certain loans and working capital cash advances to Rima Muran s.r.o. .

On April 17, 2001, EuroGas entered into an agreement to purchase an additional 57% interest in Rozmin s.r.o. from Belmont Resources, Inc. ("Belmont"), in exchange for EuroGas issuing 12,000,000 common shares, paying Belmont $100,000 in cash, and modifying the exercise price of existing stock options. EuroGas further agreed to issue an additional 1,000,000 common shares for each $0.05 decrease in the ten-day average OTC Bulletin Board quoted trading price of the Company's common shares below $0.30 per share through April 17, 2002. During April 2002,

EuroGas was obligated to issue 3,830,000 common shares to Belmont under the terms of the agreement. Additionally, EuroGas agreed to issue additional common shares to Belmont if Belmont did not realize approximately $1,218,000 from the resale of the original 12,000,000 common shares by April 17, 2002, and provided notice of the deficiency, to compensate Belmont for the shortfall based on the ten-day average trading price on the date of the notice of shortfall from Belmont. Because Belmont has not provided notice of the sale of the shares and the resulting deficiency, EuroGas is not able to calculate the shares that may be issuable, but estimates it may be obligated to issue additional common shares, based on recent market prices for the Company's common stock, to Belmont under this provision of the agreement.

In connection with the purchase by EuroGas, Rozmin s.r.o. granted an overriding royalty to Belmont of two percent of gross revenues from any talc sold. EuroGas agreed to pay Belmont a $100,000 non-refundable advanced royalty payment and agreed to arrange the necessary financing to place the talc deposit into commercial production by April 17, 2002. If the talc deposit was not in commercial production by then, EuroGas agreed to pay Belmont additional advanced royalties of $10,000 per month for each month of delay in achieving commercial production. As of December 31, 2002 EuroGas has accrued $85,000 in advance royalty due to Belmont because the talc deposit was not in commercial production. EuroGas granted Belmont the right to appoint one member of the EuroGas, Inc., board of directors for not less than one year.

The purchase of the interest in Rozmin s.r.o. was recorded at $3,843,560, based on the market value of the common shares issued (including the guarantee of the future stock value), the increase in the fair value from the modification of the stock options, and the cash advance royalty to be paid. The issuance of additional common shares under the guarantee of the future market value of the Company's common shares will not result in additional cost when issued. EuroGas accounted for the acquisition as a purchase and allocated the purchase price to the assets acquired, primarily the interest in talc mineral properties. No goodwill was recognized in the purchase transaction. The operations of Rozmin s.r.o. have been included in the consolidated results of operations from its purchase.

On April 2, 2002, EuroGas by way of a share-swap agreement exchanged its 55% shareholding interest in RimaMuran for the 43% shareholding interest in Rozmin held by RimaMuran. As part of the exchange, EuroGas paid an additional approximately $105,000 in cash to the former minority owners of RimaMuran, Peter Corej, Pavol Krajec, Jan Balaz and Villiam Komora personally enabling them as the remaining sole shareholders of Rima Muran to pay overdue liabilities of RimaMuran and to compensate them personally. Under the April 2, 2002 share-swap agreement Mrrs. Corej, Krajec, Balaz and Komora irrecvocably agreed to transfer title to two pieces of heavy equipment, which EuroGas had previously financed for Rima Muran, to Rozmin. As a result of the exchange, EuroGas received a direct 43% ownership in Rozmin free of encumbrances, and will acquire direct ownership of the remaining 57% interest in Rozmin if the contingency for additional stock issuances to Belmont is resolved. By virtue of its ownership of Rozmin and the talc deposit, EuroGas bears the full responsibility to fund the development costs necessary to bring the deposit to commercial production. The Company is currently in negotiations with several interested parties to sell a minority interest in Rozmin s.r.o to raise these development funds. In addition the Company is also negotiating a long-term delivery contract for talc from Rozmin. There is no assurance that these negotiations will be successful.

The Gemerska Talc Deposit is considered to be one of the richest and largest talc deposits in the world. The deposit, according to the Ministry of Environment of the Slovak Republic, contains 146.6 million tons of high-purity talc reserves. Mine construction, which began in August 2000, is scheduled for completion in 2003, at which time talc production is scheduled to commence. Production is expected to reach 130,000 tons of talc annually. This would represent approximately 12% of the annual European talc consumption. We believe the exploitation of the Gemerska Talc Deposit will be particularly favorable due to strong global demand for talc.

In January 2005 the Company’s subsidiary Rozmin s.r.o. was notified by the Slovak Republic’s Ministry of Economy’s Mining Office Unit at Spissska Nova Ves that Rozmin’s concession regarding the Talc deposit had been cancelled by the Slovak Government for unspecified and dubious reasons. At this point therefore no further concession is held by Rozmin.

Rozmin subsequently started substantial legal procedures in the civil courts of the Slovak Republic against the Ministry of Economy’s Mining Office Unit at Spisska Nova Ves claiming the cancellation of Rozmin’s valid mining concession at Gemerska Poloma was an illegal and corrupt act as Rozmin’s civil and constitutional rights have been violated under the law and the constitution of the Slovak Republic as well as those of the European Union. Rozmin is also claiming substantial loss and damage as a result of this illegal - in the opinion of Rozmin and the Company - corrupt act of the Slovak Republic’s Ministry of Economy’s Mining Office Unit at Spisska Nova Ves and has initialled several lawsuits against the Mining Office at Spisska Nova Ves.

Depending on the final outcome of the litigation Rozmin and the Company may consider further civil and criminal proceedings in the Slovak Republic and the United States of America against certain Slovak government officials which are to be held responsible for the cancellation of the concession, incl. the head of the Mining Office at Spisska Nova Ves, Ing. Antonin Baffi, and the head of Supreme Mining Office at Banska Stiavna, Dr. Peter Kukelcik, as well as those individuals which have benefitted from the illegal cancellation of Rozmin’s valid concession and the subsequent issuance of a new concession to a company controlled by Peter Corej and his wife.

In the opinion of Rozmin and the Company these individuals had acted to the detriment of Rozmin and the Company in collusion with the heads of the Mining Offices at Spisska Nova Ves and Banska Stiavna, Ing. Baffi and Dr. Kukelcik, and had masterminded the illegal cancellation of Rozmin’s valid mining concession with the subsequent transfer of the concession area to a small Slovak accounting company owned/controlled by Mr. Corej and his wife. Depending on the outcome of the litigation Rozmin may ask the Slovak courts to grant further relief and judgement to Rozmin and the Company in order to seek damages from those individuals personally.

Rozmin and the Company have informed the appropriate Heads of Cabinet of the European Commission in Brussels, Belgium about the illegal and - in the opinion of the Company - corrupt practices of the Ministry of Economy’s Mining Office at Spisska Nova Ves and have been informed by the European Commission that the appropriate agencies of the European Commission are investigating the matter. The Slovak Republic is a full Member of the European Union and has to abide by the law and the constitution of the European Union.

The illegal cancellation of Rozmin’s valid mining concession by the Ministry of Economy of the Slovak Republic does not nullify the Company’s obligation to Belmont Resources as to the balance of the purchase price. The Company and Belmont have entered, however, into a stand-still agreement for Belmont not to pursue legal proceedings against the Company as long as the situation in respect to Rozmin has not been cleared. The Company will be forced to impair the cost of the Rima Muran/Rozmin assets, $3,843,560, because of the illegal cancellation of the concession.

The Company and Rozmin also intend to inform the “Office for Fighting Corruption” within the “Presidium of the Police Forces”, a subsidiary of the Ministry Of Interior of the Slovak Republic, and will ask the General Attorney’s Office of the Slovak Republic to carry out an investigation of the matter.

Envigeo-Carpathian Flysch Concession. In September 1998, we acquired a 51% interest in Envigeo s.r.o., a Slovakian private company that owns a 2,300 square kilometer appraisal and survey concession, known as the Medzilaborce concession, in the northeast corner of Slovakia, referred to as the Carpathian Flysch region. Subsequently the Company sold some of its interest and now EuroGas presently holds a 45% interest in Envigeo, McCallan owns 45% and the Envigeo s.r.o. owns the other 10% There are three concessions, all held by Envigeo. This region extends into Poland and Ukraine and is geologically on trend with extensive major discoveries of oil and gas found in the neighboring countries. Since 1998 we have undertaken geological reconnaissance work on the Medzilaborce concession to meet the concession requirements. As we have evaluated the investment we have determined that there is no potential for returns in the near future. Therefore we have decided to impair this project. Accordingly, the Company recognized a $1,703,000 charge for impairment, which was the carrying value of the Company's investment in the project, during the fourth quarter of 2002.

Slovakian Oil & Gas Joint Venture. In July 1996, as part of our effort to diversify and expand our interests in Europe, we acquired Danube International Petroleum Company (“Danube”), which held participation rights for natural gas exploration in Slovakia and the Czech Republic. Since the acquisition, we have focused our efforts on the development of the Slovakian project and abandoned our interest in the Czech Republic. Danube was a partner in a joint venture agreement (the “Slovakian Oil & Gas Joint Venture”) with NAFTA Gbely A.S. (“NAFTA”). The principal focus of the Slovakian Oil & Gas Joint Venture is natural gas exploration and development under a license covering 128,000 acres located in the East Slovakian Basin, a northeastern extension of the Pannonian Basin that covers large parts of Hungary and the southeastern part of Slovakia.

Under the terms of the joint venture agreement, EuroGas was obligated to provide 75% ($4.98 million) of the projected initial test phase (including seismic testing) funding of $6.64 million and 60% ($4.08 million) of the projected capital investment cost for the initial production phase of $6.8 million. All funds required for the initial test phase were expended. However, the Company has decided to withdraw from the NAFTA-Danube association and discontinue our involvement in any further exploration in the Trebisov gas field in eastern Slovakia. In exchange for the Company’s withdrawal, Nafta Gbely a.s. agreed to pay all outstanding obligations and liabilities totaling approximately $750,000 owing to Geophysical Services Ltd. of Hungary.

By an amended agreement dated November 22, 2001, EuroGas agreed to acquire all of the issued and outstanding shares of Falcon Energy Overseas Inc., a subsidiary of Falcon Energy Holding Corp. (“Falcon The venture holds the license to explore and develop proven shallow oil fields in Kazakhstan on an area of approximately 3.2 million acres known as the Sagiski Block. Falcon also holds other oil and gas interests in Kazakhstan outside the joint venture with FIOC. Under the agreement EuroGas was to issue 30,000,000 shares of EuroGas common stock and pay staged cash commitments of $10,000,000. The Company issued 10,000,000 shares and the parties terminated the relationship as the acquisition was unwound.

EuroGas expected to obtain funding for this project through Oxbridge Ltd., but terms of that funding were never finalized due to the Company’s delisting from the NASD OTC Bulletin Board on December 28, 2001 and Falcon’s inability to provide financial statements to the Company. On February 12, 2002, Falcon notified EuroGas that all agreements between Falcon and EuroGas, both written or verbal were null and void as of February 6, 2002. The Company and Falcon are currently in discussions to negotiate a new agreement; however, any new agreement will contemplate potential properties other than the Sagiski Block.

Beaver River Natural Gas Field. EuroGas owns a 7.5% interest in the Beaver River natural gas project. The objective of this project is to reestablish commercial production in an abandoned natural gas field in the northeast corner of British Columbia, Canada. Beaver River is the largest existing gas pool in British Columbia. The prior owners shut down the project because of heavy water influx. Before shutting down the project, the prior owner produced substantial amounts of natural gas and reported that peak production reached 350 million cubic eet per day from five wells. Independent reservoir studies and government reports show substantial natural gas reserves at Beaver River, ranging between 1.5 and 3 trillion cubic feet.

EuroGas originally held a 15% interest in the Beaver River natural gas project, through a wholly owned subsidiary, Beaver River Resources Ltd. (“BRRL”). This interest was reduced to 7.5% in the settlement of a lawsuit with the former owners. In the settlement, the former owners returned 1,200,000 shares of EuroGas common stock to EuroGas in exchange for one-half of BRRL’s interest in the Bear River project.

According to the current operator of the Beaver River project, Questerre Energy ("Questerre"), the A5 re-entry well was reaching gas production levels as high as 17 million cubic feet per day in March of 2001. The well was in production from March through April 2001, when it was shut in. Due to drilling of a new well and lower pressure in the field pipeline, enhancement of the field pipeline pressure through installation of additional compressor pumping and gas lift systems was necessary.

The compressor pumping and gas lift systems were installed and operational in early 2002 after which extensive testing of the experimental process upon which the recovery effort is based.

Since mid-March of 2001, BRRL received one-sixth of a 4% overriding royalty from gas production, under its agreement with Questerre. The property owners including BRRL are receiving an overriding royalty of 4% until Questerre has recovered its investment. The total royalties received are expected to substantially increase until Questerre has received up to 600% of its investment. Thereafter the ownership interest will change to a 6.7% working interest.

During the second quarter of 2002, the Company evaluated its investment in the Beaver River Gas project in British Columbia, Canada. The terms of the related farmout agreement provide that the operator of the project will receive payout of all of its investment prior to any payments to the other interest holders and then the Company would receive 3.33% of the net cash flows, if any. The operator has invested in excess of $16,000,000 in the project at September 30, 2002. Due to the low production from the Beaver River Project and gas prices currently being paid for the production, management has determined that it is unlikely that the Company will receive any cash flows from the project, except for nominal overriding royalty payments. Accordingly, the Company recognized a $3,937,500 charge for impairment, which was equal to the carrying value of the Company's investment in the project.

Reserves Reported to Other Agencies. No reserves were reported to any other federal agency or authority for the years ended December 31, 2007 or December 31, 2006.

In the business of exploration, development, and production of oil and gas resources, we compete with some of the largest corporations in the world, in addition to many smaller entities. Many of the entities that we compete with have access to far greater financial and managerial resources than those available to EuroGas. As a result of the exclusive nature of certain concessions that we hold, to the extent that we are able to successfully find, develop, and produce hydrocarbon resources, we will be able to exclude any competitor from production of the resources located on the concessions, but we cannot exclude competitors from providing natural gas or other energy sources at prices or on terms that purchasers deem more beneficial.

As of December 31, 2007, we had two administrative employees. In addition, we use the services of consultants to the Company. These employees include Wolfgang Rauball, and Hank Blankenstein. Mr.Rauball, works out of Europe, and Mr. Blankenstein works mainly out of Canada and partly in the United States. Mr. Andraczke resigned his positions related to the Company during March of 2006. None of our employees are represented by a collective bargaining organization, and we consider our relationship with our employees to be satisfactory. In addition to our employees, we regularly engage technical and other consultants to provide specific geological, geophysical, and other professional services on an as-needed basis.

We are engaged in the exploration for methane and natural gas and the drilling of wells and, as such, our operations are subject to the usual hazards incident to the industry. These hazards include blowouts, cratering, explosions, uncontrollable flows of gas or well fluids, fires, pollution, releases of toxic gas, and other environmental hazards and risks. These hazards can cause personal injury and loss of life, severe damage to and destruction of property and equipment, pollution or environmental damage, and suspension of activities. We do not have any hazard insurance. The occurrence of a significant adverse event that is not covered by insurance would have a material adverse effect on EuroGas.

The information set forth as “Note 8 – Geographic Information” of our consolidated financial statements included in this Form 10-K contains information regarding financial information about foreign and domestic operations of the Company and its subsidiaries.

This report on Form 10-K contains forward-looking statements. You can identify forward-looking statements by their use of the forward-looking words “anticipate,” “estimate,” “project,” “likely,” “believe,” “intend,” “expect,” or similar words. These statements discuss future expectations, contain projections regarding future developments, operations, or financial conditions, or state other forward-looking information. When considering the forward-looking statements made in this report, you should keep in mind the risks noted in “Factors That May Affect Future Results” below and other cautionary statements throughout this report. You should also keep in mind that all forward-looking statements are based on management’s existing beliefs about present and future events outside of management’s control and on assumptions that may prove to be incorrect. If one or more risks identified in this report or other filing materializes, or any other underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, estimated, projected, or intended.

Our consolidated financial statements are prepared using generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.

We have incurred significant losses since inception, which have resulted in an accumulated deficit of $ 192,651,764 at December 31, 2007 . These losses and this significant deficit raise substantial doubt about our ability to continue as a going concern. The accompanying audited consolidated financial statements do not include any adjustments relating to

the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty.

We are dependent upon financing activities to fund our operations and will continue to require significant funds to meet our obligations and to pursue our business plan.

EuroGas has historically been undercapitalized. Prior to our acquisition of an approximately 50% interest in a Canadian gas production entity (Big Horn) in 1998 (which was fully divested in 2002), we had not earned any significant cash revenues since our incorporation. Because we divested our interest in Big Horn, we do not currently have a source of revenues, do not anticipate any revenues in the near term and expect to continue to incur operating losses in the foreseeable future. As a result, we are entirely dependent on financing from the sale of securities or loans in the future and/or amounts made available by industry partners in the future. We expect to continue to incur significant costs as part of our ongoing and planned projects and do not anticipate that these costs will be offset fully, if at all, by revenues for the foreseeable future. If we are unable to raise capital from the sale of securities, loans, or industry partnerships in the future, we will have to scale back our operations and may, at some point, become insolvent.

Our projects are highly speculative and generally only at the exploration stage.

Our assets and interests are primarily in methane gas, natural gas, and crude oil exploration and development projects. These projects are highly speculative, whether we are still at the exploratory stage or have commenced development. We can provide no assurance that any drilling, testing, or other exploration project will locate recoverable gases or other fuels in sufficient quantities to be economically extracted. Several test wells are typically required to explore each concession or field. We may continue to incur significant exploration costs in specific fields, even if initial test wells are plugged and abandoned or, if completed for production, do not result in production of commercial quantities of natural gas or other fuel.

Many of our projects are in locations where the infrastructure is inadequate to support our needs.

Many of the projects in which we have invested are located in areas of the world, primarily Eastern Europe. In most of these areas the necessary infrastructure for transporting, delivering, and marketing any natural gas, methane gas or other fuels that may be recovered is significantly underdeveloped or, in some cases, nonexistent. Even if we are able to locate natural gas, methane gas, or other valuable fuels in commercial quantities, we may be required to invest significant amounts in developing the infrastructure necessary to support the transportation and delivery of such fuels. We do not currently have a source of funding available to meet these costs.

Many of our projects are in countries that have fragile and unpredictable political and socio-economic systems.

Our operations in Eastern Europe carry with them certain risks in addition to the risks normally associated with the exploration for, and development of, natural gas and other fuels. Although recent political and socio-economic trends in these countries have been toward the development of market economies that encourage foreign investment, these countries continue to be subject to the risks of political instability, a change of government, unilateral renegotiation of concessions or contracts, nationalization, foreign exchange restrictions, and other uncertainties. The terms of the agreements governing our projects are subject to administration by the various governments and are, therefore, subject to changes in the government itself, changes in government personnel, the development of new administrative policies or practices, the adoption of new laws, and many other factors.

Moreover, we may be required to obtain and renew licenses and permits on an ongoing basis in connection with further exploration, the drilling of wells, the construction of transportation facilities and pipelines, the marketing of any fuel that may be produced, and financial transactions necessary for all of the foregoing. The rules, regulations, and laws governing all such matters are subject to change by the various governmental agencies involved. We can provide no assurance that the laws, regulations, and policies applicable to our interests in various countries in which our projects are located will not be radically and adversely altered at some future date.

The continuance, completion or renewal of many of our licenses may be subject to the discretion of government authorities and we cannot therefore predict with certainty whether they will be continued or renewed or whether we will be successful in obtaining all permits and licenses required to fully exploit our interests in those countries.

In general, we have had the right to conduct basic exploration on all concessions or fields in which we have an interest. However, in order to drill for, recover, transport or sell any gas or other hydrocarbons, we will generally be required to obtain additional licenses and permits and enter into agreements with various landowners and/or government authorities. The issuance of most such permits and licenses will be contingent upon the consent of national and local governments having jurisdiction over the production area, which entities have broad discretion in determining whether or not to grant permits and licenses. Moreover, even if obtained, such licenses, permits, and agreements will generally contain numerous restrictions and require payment by us of a development/exploration fee, typically based on the market value of the economically recoverable reserves. The amount of a fee and other terms of any such license, permit, or agreement will affect the commercial viability of any extraction project. We can provide no assurance that we will be able to obtain the necessary licenses, permits, and agreements. Even if we do obtain such items, the associated costs, delays and restrictions may significantly affect our ability to develop the affected project.

None of the projects in which we own an interest is presently producing gas or other hydrocarbons. Texaco drilled and abandoned test wells on the concession in Poland in which we had an interest, and we have drilled test wells on our Slovakia concessions. None of these wells has been developed or commenced production, and we can provide no assurance that any of our projects will at any time commence production of any valuable resource.

We are dependent upon certain officers, key employees, and consultants, the loss of which would adversely affect our ability to continue in business.

We are dependent on the services of Wolfgang Rauball (Chairman and Chief Executive Officer), Hank Blankenstein (Chief Financial Officer). We do not maintain key-man life insurance on any EuroGas employees.

We have numerous projects throughout the world, which we attempt to direct and manage with only a few employees. Unless and until additional employees are hired, our attempt to manage our numerous projects and obligations with such a limited staff could have serious adverse consequences, including without limitation, a possible failure to meet a material contractual, court, or SEC deadline, or a possible failure to consummate investment or acquisition opportunities.

Subsequent evaluation may reveal that our unproved properties are not valuable, and we may need to record an impairment of the value of those properties, which would adversely affect our financial condition.

We capitalize costs related to unproved gas properties under the full cost method. We review our unproved properties periodically to assess whether an impairment allowance should be recorded. On December 31, 2007, we had capitalized costs related to the acquisition of oil and gas properties not subject to amortization in the amount of $0.0. EuroGas has been forced because of the Bankruptcy to write off any capitalized cost associated with the assets that were sold during the Bankruptcy procedures.

Severe weather will interrupt, and may adversely affect, our activities in various parts of the world.

Severe weather conditions frequently interrupt much of our exploratory and testing work. Heavy precipitation sometimes makes travel to exploration sites or drilling locations difficult or impossible. Extremely cold temperatures may delay or interrupt drilling, well servicing, and production (if commenced, of which we can give no assurance). The temperatures in all of the regions in which we have exploratory or other operations are extremely cold. Even if recoverable reserves are discovered in regions prone to severe weather, the above-described adverse weather conditions may limit production volumes, increase production costs, or otherwise prohibit production during extended portions of the year.

The prices of the various hydrocarbons we produce or may produce are volatile and unstable.

The prices of oil, natural gas, methane gas and other fuels have been, and are likely to continue to be, volatile and subject to wide fluctuations in response to numerous factors, including the following:

Low prices or highly volatile prices for any fuel being explored or produced at one of our projects will adversely affect our ability to secure financing or enter into suitable joint ventures or other arrangements with industry participants. In addition, if we commence recovery of fuel at any of our projects, a low or volatile price for the fuel being recovered will adversely affect revenue and other operations.

Our operations involve numerous hazards, and we maintain no insurance against such risks.

Exploring for fuel, drilling wells, and producing fuel involves numerous hazards, including the following:

If any of these events were to occur we might be forced to cease any or all of our exploration, drilling, or production activities on a temporary or permanent basis. In addition, these events might lead to environmental damage, personal injury, and other harm resulting in substantial liabilities to third parties. We do not maintain insurance against these risks. Even if we were to obtain insurance, we might not be insured against all losses or liabilities that might arise from these hazards because the insurance may be unavailable at economic rates, due to limitations in the insurance policies, or other factors. Any uninsured loss would likely have a material adverse impact on our business and operations.

Our operations are subject to numerous environmental laws, compliance with which may be extremely costly.

Our operations are subject to environmental laws and regulations in the various countries in which they are conducted. These laws and regulations frequently require completion of a costly environmental impact assessment and government review process prior to commencing exploratory and/or development activities. In addition, environmental laws and regulations may restrict, prohibit, or impose significant liability in connection with spills, releases, or emissions of various substances produced in association with fuel exploration and development.

We can provide no assurance that we will be able to comply with applicable environmental laws and regulations or that those laws, regulations or administrative policies or practices will not be changed by the various governmental entities. The cost of compliance with current laws and regulations or changes in environmental laws and regulations could require significant expenditures. Moreover, if we violate any governing laws or regulations, we may be compelled to pay significant fines, penalties, or other payments. Costs associated with environmental compliance or noncompliance may have a material adverse impact on our financial condition or results of operations in the future.

Most of our outstanding shares are free trading and, if sold in large quantities, may adversely affect the market price for our common stock.

Most of the approximately 191,212,635 shares of common stock issued and outstanding as of December 31, 2007are free trading or are eligible for resale under Rule 144 under the Securities Act. Although the resale of certain of these shares may be subject to the volume limitations and other restrictions under Rule 144, the possible resale of the remaining shares may have an adverse effect on the market price for our common stock.

We have the right to, and expect to, issue additional shares of common stock without shareholder approval.

EuroGas has authorized capital of 325,000,000 shares of common stock, par value $0.001 per share, and 3,661,968 shares of preferred stock, par value $0.001 per share. As of December 31, 2007 there were 191,212,635 shares of common stock and 2,392,228 shares of preferred stock issued.

We have not paid any dividends on our common stock and do not expect to pay dividends with respect to the common stock in the near future.

We have not paid, and do not plan to pay, dividends on our common stock in the foreseeable future, even if we become profitable. Earnings, if any, are expected to be used to advance our activities and for general corporate purposes, rather than to make distributions to shareholders.

You should consider this cautionary warning concerning forward-looking statements in this report

Certain statements in this report constitute "forward-looking statements" within the meaning of the rules and regulations promulgated by the SEC. Those forward-looking statements involve known and unknown risks, uncertainties and other factors, including those discussed above, that may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks, uncertainties and other factors include, among other things, our lack of revenue and our substantial net losses and accumulated deficit, as well as the continuing uncertainty of profitability, the highly competitive industry in which we operate, changes in or failure to comply with governmental regulation, the uncertainty of third party reimbursement for our products, general economic and business conditions and other factors referenced above.

The Company abandoned its office facilities from various leasers in Vienna, Austria and Vancouver for lack of working capital and because of the Chapter 7 bankruptcy situation.

Except for Vancouver, the office leases were on month-to-month agreements. EuroGas entered into a lease agreement for its Vancouver office space that required monthly payments of $6,851 through January 2003. Thereafter, the lease was on a month-to-month basis but has since been abandoned by the lessor.

The principal portion of the Company’s previous litigation, as described in the following six paragraphs, involves matters relating to the Company’s acquisition of GlobeGas (which indirectly controlled the Pol-Tex Concession in Poland). This litigation is being brought by Steve Smith, Chapter 7 Trustee (the “Trustee”) for the bankruptcy estates of Harven Michael McKenzie, Debtor; Timothy Stewart McKenzie, Debtor; Steven Darryl McKenzie, Debtor (case no. 95-48397-H2-7, Chapter 7; case no. 95-48474-H2-7, Chapter 7; and case no. 95-50153-H2-7, Chapter 7, respectively), pending in the United States Bankruptcy Court, for the Southern District of Texas, Houston Division.

McKenzie Bankruptcy Claim. This litigation is being brought by Steve Smith, Chapter 7 Trustee (the “Trustee”) for the bankruptcy estates of Harven Michael McKenzie, Debtor; Timothy Stewart McKenzie, Debtor; Steven Darryl McKenzie, Debtor (case no. 95-48397-H2-7, Chapter 7; case no. 95-48474-H2-7, Chapter 7; and case no. 95-50153-H2-7, Chapter 7, respectively), pending in the United States Bankruptcy Court for the Southern District of Texas, Houston Division.

In March 1997, the Trustee commenced the following cause of action: W. Steve Smith, Trustee, v. McKenzie Methane Poland Co., Francis Wood McKenzie, EuroGas, Inc. GlobeGas, B.V. and Pol-Tex Methane, (Adv. No. 97-4114 in the United States Bankruptcy Court for the Southern District of Texas, Houston Division) (hereafter “97-4114”). The Trustee’s initial claim appears to allege that the Company may have paid inadequate consideration for its acquisition of GlobeGas from persons or entities acting as nominees for the McKenzies, and therefore McKenzies’ creditors are the true owners of the proceeds received from the development of the Pol-Tex Concession in Poland. The Company has contested the jurisdiction of the Court, and the Trustee’s claim against a Polish corporation (Pol-Tex), and the ownership of Polish mining rights. The Company further contends that it paid substantial consideration for GlobeGas (Pol-Tex’s parent), and that there is no evidence that the creditors of the McKenzies invested any money in the Pol-Tex Concession.

In March of 1997, the Trustee brought a related suit W. Steve Smith, Trustee v. Bertil Nordling, Rolf Schlegal, MCK Development B.V. Claron N.V., Jeffrey Ltd., Okibi N.V., McKenzie Methane Poland Co., Harven Michael McKenzie, Timothy Stewart McKenzie, Steven Darryl McKenzie and EuroGas, Inc., (Adv. No. 97-4155) in each of the three McKenzie individual bankruptcy cases. In general, the action asserts that the defendants, other than the Company, who acquired an interest in the Polish Project, received a fraudulent transfer of assets belonging to the individual McKenzie bankruptcy estates, or are alter egos or the strawmen for the McKenzies. As a result, the Trustee asserts that any EuroGas stock or cash received by these defendants should be accounted for and turned over to the Trustee. As to the Company, the Trustee asserts that as transfer agent, the Company should turn over the preferred stock presently outstanding to the defendants or reserve such shares in the name of the Trustee and that any special considerations afforded these defendants should be canceled. It appears the Company was named to this litigation only because of its relationship as transfer agent to the stock in question. This suit has been administratively consolidated with 97-4114, and is currently pending before the Houston bankruptcy court.

In October 1999, the Trustee filed a Motion for Leave to Amend and Supplement Pleadings and Join Additional Parties in the consolidated adversary proceedings, seeking to add new parties, including Wolfgang and Reinhard Rauball and assert additional causes of action against EuroGas and the other defendants in this action. These new causes of action include claims for damages based on fraud, conversion, breach of fiduciary duties, concealment and perjury. These causes of action claim that the Company and certain of its officers, directors or consultants cooperated or conspired with the McKenzies to secret or conceal the proceeds from the sale of the Polish Concession from the Trustee. In January 2000, this motion was granted by the bankruptcy court. The Company is vigorously defending this suit. On March 18, 2002, the court considered motions to dismiss filed by EuroGas and the Rauballs (other named defendants). These motions are currently pending before the Court. No trial date has been set In June 1999, the Trustee filed another suit in the same bankruptcy cases styled Steve Smith, Trustee, vs. EuroGas, Inc., GlobeGas, B.V., Pol-Tex Methane, SP. Z.O.O., et al (Adv. No. 99-3287). That suit sought sanctions against the defendants for actions allegedly taken by the defendants during the bankruptcy cases which the Trustee considered improper. The defendants filed a motion to dismiss the lawsuit, which was granted in August 1999. In July 1999, the Trustee also filed a suit in the same bankruptcy cases styled Steve Smith, Trustee, vs. EuroGas, Inc., GlobeGas, B.V., Pol-Tex Methane, SP. Z.O.O. (Adv. No. 99-3444). This suit seeks damages in excess of $170,000 for the defendants’ alleged violation of an agreement with the Trustee executed in March 1997. EuroGas disputes the allegations and has filed a motion to dismiss or alternatively, to abate this suit, which motion is currently pending before the court. On March 18, 2002, the court considered motions to dismiss filed by EuroGas and the Rauballs (other named defendants). On September 10, 2002, the Court entered an Order which required the Trustee to specify the causes of action asserted against each Defendant. A few days prior to this Order, the Trustee filed his Second Motion for Leave to Amend and Supplement Pleadings and to Drop Certain Defendants (the “Second Motion”). On October 21, 2002, EuroGas and other Defendants filed their Response to the Second Motion. On November 11, 2002, the Trustee filed his Motion and Reply to this Response under which, in part, Trustee sought court approval to file a Third Amended Complaint. On March 13, 2003 the Court entered and Order Granting Trustee’s Motion for Leave to Amend. On March 13, 2003 the Trustee filed his Third Amended Complaint, which is now styled Steve Smith, Trustee v. Harven Michael McKenzie, McKenzie Methane Poland, Inc., EuroGas, Inc., Wolfgang Rauball, Reinhard Rauball, MCK Development, B.V., Claron, N.V., Jeffrey, Ltd. and Okibi N.V. (Adv. No. 97-4114 and 97-4115). As to EuroGas, the Third Amended Complaint asserts claims for breach of contract, fraud in the inducement, conspiracy, aiding and abetting civil conspiracy, fraudulent transfer and punitive damages. As to Wolfgang and Reinhard Rauball, the Third Amended Complaint asserts claims for turnover under Sections 542 and 543 (Reinhard Rauball only) of the Bankruptcy Code, conversion, post-petition avoidable transfers, civil conspiracy, aiding and abetting civil conspiracy and punitive damages. The Company has recently filed a Motion to Dismiss the Third Amended Complaint. At present, no trial date has been set.

Kukui, Inc. Claim In November 1996, the Company entered into a settlement agreement with Kukui, Inc. ("Kukui"), a principal creditor in the McKenzie bankruptcy case, whereby the Company issued 100,000 common shares and an option to purchase 2,000,000 additional common shares, which option expired on December 31, 1998. The Company granted registration rights with respect to the 100,000 common shares issued. On August 21, 1997, Kukui asserted a claim against EuroGas, which was based upon an alleged breach of the 1996 settlement agreement as a result of the Company's failure to file and obtain the effectiveness of a registration statement for the resale by Kukui of the 100,000 shares delivered to Kukui in connection with the 1996 settlement. In addition, the Estate of Bernice Pauahi Bishop (the “Bishop Estate”), Kukui's parent company, entered a claim for failure to register the resale of common shares subject to its option to purchase up to 2,000,000 common shares of EuroGas. EuroGas denied any liability and filed a counterclaim against Kukui and the Bishop Estate for breach of contract concerning their activities with the McKenzie Bankruptcy Trustee.

“Settlement Agreement”). The Settlement Agreement, in part, required EuroGas to pay $900,000 over 12 months and issue 100,000 shares of registered common stock to the Bishop Estate by June 30, 2000. The bankruptcy court approved the Settlement Agreement on May 23, 2000. The claims of Kukui, Inc. and the Trustees of the Bishop Estate have been dismissed pursuant to the terms of the Settlement Agreement. Under the terms of the Settlement Agreement, EuroGas recorded an accrued settlement obligation and litigation settlement expense of $1,000,000 during 1999, paid Kukui $782,232 of the settlement obligation in 2000 and accrued an additional settlement obligation liability and expense of $251,741 during 2000. During 2000, EuroGas issued the Bishop Estate 100,000 registered common shares, which were valued at $100,000, or $1.00 per share. The resulting accrued settlement obligation of $369,509 for the estimated cost of settling the claim included an estimated default penalty and interest. The Company contends that it has fully performed under the Settlement Agreement and that the Settlement Agreement additionally entitles the Company to a complete release and dismissal of all suits filed by the Bankruptcy Trustee. The Bankruptcy Trustee contends that EuroGas defaulted under the Settlement Agreement and is not entitled to a release or dismissal.

Holbrook Claim On February 9, 2001, James R. Holbrook, a documents escrow agent appointed under the Settlement Agreement, filed his Complaint of Escrow Agent for Interpleader and for Declaratory Relief against EuroGas, the Trustee and the other parties to the settlement in an action styled James R. Holbrook v. W. Steve Smith, Trustee, Kukui, Inc., Eurogas, Inc. and Kruse Landa & Maycock, L.L.C., (Adv. No. 01-3064) in the McKenzie bankruptcy cases. Under this complaint, Holbrook sought a determination of the defendants’ rights in certain EuroGas files that he had received from Kruse Landa and Maycock, former attorneys for EuroGas. Through this litigation, the Trustee sought turnover of all these files pursuit to the Settlement Agreement. EuroGas has opposed turnover of privileged materials and filed a cross-claim in the suit asking for a declaratory judgment that the Settlement Agreement is enforceable and that the Trustee be ordered to specifically perform his obligations under the Settlement Agreement. The Trustee filed a counterclaim requesting specific performance by EuroGas and other relief. At the direction of the court, both parties filed motions for summary judgment. On December 17, 2001, the court entered an order granting Trustee’s Motion for Summary Judgment and denying a related Motion to Strike Affidavit, which EuroGas had filed. EuroGas has appealed this order to the United States District Court for the Southern District of Texas. On September 25, 2002 the District Court entered its Opinion and Order affirming the Bankruptcy Court’s orders. On October 25, 2002 EuroGas filed a notice of appeal of the District Court’s order to the Fifth Circuit Court of Appeals. The appeal is currently pending before this Court. EuroGas cannot predict the outcome of these appeals, but intends to vigorously pursue the appeals to completion.

On November 4, 2003, EuroGas signed a settlement agreement with the Bankruptcy Trustee, Kukui, and other parties. The settlement agreement called EuroGas to make payments totaling $2,800,000, to be paid in installments, with an initial payment of $250,000 paid November 5, 2003 and $250,000 to be paid by December 6, 2003. Upon completion of the payments all the cases relating to the McKenzie bankruptcy claim, including the Kukui, claim, and the Holbrook claim, as described below, will be dismissed. Under this settlement EuroGas, its subsidiaries, Wolfgang Rauball and Reinhard Rauball will be released from any further claim by Kukui and the Bankruptcy Trustee. Since the initial payments were made EuroGas has not been able to make further payments and is in default of the settlement agreement. Subsequently EuroGas management has met with the Bankruptcy Trustee, on March 27, 2004 in Houston, Texas. The discussion centered on revival of the settlement agreement, this discussion is ongoing. Continued discussion are on going to revive the settlement agreement. A third party investor has indicated that he is prepared to place the required settlement amount in a trust fund in the very near future to obtain a settlement. In the meantime the Bankruptcy Trustee has filed a petition in US Bankruptcy court in Salt Lake City, Utah to have EuroGas, Inc. forced into involuntary bankruptcy. EuroGas has retained local council and has responded to the claim. Because Eurogas was unable to finance the settlement agreement the Bankruptcy court in Houston Texas has added a monetary amount of $113 million to the default judgment, against EuroGas, Inc. and certain parties, that was obtained by the Trustee for the McKenzie matter. On October 20, an Order for Relief was signed by the US Bankruptcy Court in Salt Lake City, Utah. This has put the Company into receivership at this point. There is ongoing negotiations by the third party to purchase the judgment against EuroGas presently held by the Bankruptcy Trustee in the McKenzie matter, who forced EuroGas into involuntary Bankruptcy. The plan is to purchase the judgment held by the McKenzie trustee by a friendly third party and then request the US Bankruptcy Court in Salt Lake City, Utah to convert the present chapter 7 bankruptcy to a voluntary chapter 11 reorganization. . In October of 2005, the Bankruptcy Trustee was asked to sell the Polish asset, GlobeGas B.V., Pol-Tex Methane, Sp. zo.o., McKenzie Methane Jastrzebie Sp. zo.o., to a third party. The Trustee eventually put the group of Polish companies up for an auction which was held on March 28, 2006, after a certain amount of legal wrangling by some of the creditors. The assets were sold at the auction and the Bankruptcy Trustee received appr. $ 800.000 for the assets which he distributed after costs to certain creditors of the company in November 2006. On or about February 20th 2007 a final report was issued by the Bankruptcy Trustee stating that the Eurogas Bankruptcy case had been formally closed by order of the Bankruptcy Judge, The honorable Judge Thurman, and that the Trustee was no longer involved in the case.. The following order was issued by the Court in Salt Lake City “Upon consideration of the foregoing report and motion for discharge of the Trustee, The Court concluded that the Trustee has completed the administration of the estate (of EuroGas, Inc.) it is ORDERED: 1. That the Trustee be and is

hereby discharged, and the surety on the bond are relieved of further liability in this case: 2. .That the case be and is hereby closed.” This information was posted on “Pacer” the official document organization for the US Court system The Company has recently received a revived settlement negotiation with the Bankruptcy Trustee for the McKenzie claim in Houston Texas. The Company will report to the shareholders of the Company as to the progress of these negotiations regarding the settlement. During the summer of 2007 negations continued with the Texas Bankruptcy court and the Court allowed the Trustee to sell the judgment held against the Company to a friendly third party, which now holds the judgment. (See 8-K filing in October of 2007regaring sale of judgment)

Netherlands Tax Assessment. For the 1992 tax year, the Kingdom of the Netherlands assessed a tax against GlobeGas in the amount of approximately $911,000, even though Globe Gas had significant operating losses. On December 17, 2001, the Netherlands issued its final tax assessment, including interest charged from 1998, in the amount of approximately $753,000. The Company had until December 19, 2001 to make payment of this amount or face possible additional proceedings against the assets of GlobeGas in satisfaction of the assessment. The tax assessment is payable in Euro, and as a result fluctuates on the Company’s financial statements due to adjustments in exchange rates. However, GlobeGas does not have the ability to pay the assessed obligation and as a result may face forced liquidation and dissolution by the Netherlands tax authority.

Dissolution of Energy Global A.G. During 2002, the Company’s Liechtenstein Subsidiary, Energy Global A.G., was statutorily liquidated and dissolved by the Principality of Liechtenstein. As a result, the Company lost $615,904 in net assets of that subsidiary and may be subject to additional losses in net assets of Energy Global’s subsidiaries.

No matters were submitted to a vote of the security holders of the Company during the fourth quarter of 2007

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters Market for Common Stock

Our common stock is quoted on the US Pink Sheet trading organization under the symbol “EUGS.PK” and is traded in Germany on the Hamburg Stock Exchange under the symbol EUG.HM respectively. As of December 31, 2007 there were 196,212,635 shares of common stock issued and outstanding, held by approximately 317 holders of record and an estimated 31.000 beneficial owners, including shares of common stock held in street name.

The following table sets forth the approximate range of high and low bids for the common stock during the periods indicated. These quotations reflect interdealer prices, without retail markup, markdown, commissions, or other adjustments and may not necessarily represent actual transactions in the common stock.

The reported price quotes may not be indicative of prices that could be obtained in actual transactions.

We have not paid dividends on our common stock, and we do not have retained earnings from which to pay dividends. We have accrued cumulative preferred dividends of $135,198, $135,199 and $139,932 in 2007, 2006 and 2005, respectively. Of this amount, zero was paid in 2007, zero was paid in 2006, and zero was paid in 2005, by the issuance of shares of common stock in connection with the conversion of a portion of the preferred stock. We must pay cumulative dividends with respect to our preferred stock before we can declare or pay any dividend on our common stock. Even if we were able to generate the necessary earnings, it is not anticipated that dividends will be paid in the foreseeable future, except to the extent required by the terms of the cumulative preferred stock currently issued and outstanding.

During the year ended December 31, 2007, the Company issued No additional Securities

The following statement of operations and balance sheet data were derived from our audited consolidated financial statements. Our consolidated financial statements have been audited by our independent certified public accountants. The selected financial data below should be read in conjunction with our consolidated financial statements and the notes thereto included with this report and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

		Year Ended December 31,
		2007		2006		2005			2004		2003

Net Sales	$	0 -	$	0 -	$	0 -		$	0 -	$	5,074
Loss from Operations		884,907	$	917,867	$	875,973	)	$	5,058,088	$	18,551,994

Loss per Common Share	$	0.00	$	0.00	$	0.00		$	0.00	$	0.026

*Balance Sheet Data*

		At December 31,
		2007		2006		2005		2004		2003

Total Assets	$	3,090,618	$	3,149,355	$	4,202,586	$	4,206,169	$	9,417,748

Long-Term Obligations	$	0	$	0	$	0	$	0	$	0
Cash Dividends
per Common Share	$	0	$	0	$	0	$	0	$	0

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.

We are engaged primarily in the acquisition of rights to explore for and exploit oil, natural gas, coal bed methane gas, and mineral mining. We have acquired interests in a number of large exploration concessions, for oil, natural gas, and are in various stages of identifying industry partners, farming out exploration rights, undertaking exploration drilling, and seeking to develop production. We currently have several projects in various stages of development,,. We also have holdings in oil and natural gas projects in Canada.

Our principal assets consist both of proven and developed properties, as well as unproven and undeveloped properties. All costs incidental to the acquisition, exploration, and development of such properties are capitalized, including costs of drilling and equipping wells and directly-related overhead costs, which include the costs of equipment we own. Because we have limited proven reserves and established production, most of our holdings have not been amortized. If we are ultimately unable to establish production or sufficient reserves on some of these properties to justify the carrying costs, the value of the assets will need to be written down and the related costs charged to operations, resulting in additional losses. We periodically evaluate our properties for impairment and if a property is determined to be impaired, the carrying value of the property is reduced to its net realizable amount.

In the past, we have focused our resources on pre-exploration or early-exploration stage natural gas, coal bed methane gas, and other hydrocarbon projects with little short-term revenue potential. We believe that our investment in these early-stage projects will prove profitable in the long run, and we may invest in additional early-stage projects from time to time in the future. Nonetheless, management believes that, in order to balance our holdings, the focus of our acquisition, investment and development strategy should be on hydrocarbon projects that have the potential to generate revenues within one to five years of the date of investment. We are actively seeking investments of that type. Specifically, we intend to take the following actions over the coming months:

In summary, the outlook, based on our strategic approach, is simple. We intend to fund development of the oil and gas projects in Central and Eastern Europe. Further, we will closely monitor the Beaver River gas project in British Columbia. The ultimate goal is to transform the company from an exploration concern to a significant cash flow-producing resource company.

The following table sets forth consolidated income statement data and other selected operating data for the years ended December 31, 2007, 2006 and 2005.

Revenues. Prior to 1998, we had not generated any revenues from oil and gas sales. As a result of our acquisition of the controlling interest in Big Horn, our results of operations for 2002 and 2001 reflect oil and gas sales of approximately $88,937 and $6,395,037, respectively. As a result of the Company’s sale of its controlling interest in Big Horn and the non-consolidation of Big Horn thereafter, the Company had no oil and gas sales since 2002.

Operating Expenses. Operating expenses include general and administrative expenses, depreciation, depletion and amortization, settlement costs, cost of mineral interests and equipment and impairment of mineral interests and equipment. Oil and gas production expenses were $0 in 2007, and $0 in 2006. All of our oil and gas production expenses are from our Big Horn subsidiary. In 2005, we had no oil and gas operating expenses.

General and administrative expenses were $621,786 for 2007, compared with $630,568 for 2006 and $ 786,572 in 2005. The decrease in 2007 from the level previous year was due primarily to the decrease of litigation and general office expenses. Depreciation, depletion and amortization expenses were $0 for 2007 compared to $3,123 for 2006 and $5,876 during 2005 . The decrease in depreciation, depletion and amortization expense is attributable to limited assets subject to depreciation, depletion and amortization.

Impairment of mineral interests and expenses totaled $0 for 2007, $0 in 2006, and, $ 0 in 2005. The principal factor that contributed to the decrease in impairment expenses from 2007 through 2006 there were no items to impair.

Settlement costs for financial statement purposes had no change from $1,690,947 in 2005 to $13,285,766 in 2006 to no change in 2007.

Income Taxes. Historically, we have not been required to pay income taxes, due to our absence of net profits. For future years, we anticipate being able to utilize a substantial portion of our accumulated deficit, which was approximately $183,472,700 at December 31, 2007, to offset profits, if and when achieved, resulting in a reduction in income taxes payable at such time.

Net Loss. We incurred net losses from operations of approximately $ 621,786 $ 655,701 and $875.973 , for the years ended December 31, 2007, 2006 and 2005, respectively. After preferred dividends, the loss applicable to common shares was approximately $...6 million, $..7 million and $.9 million for the years ended December 31, 2007, 2006 and 2005 , respectively. These losses were due in part to the absence of revenues, combined with continued administrative expenses.

Due to the highly inflationary economies of the Eastern European countries in which we operate, we are subject to extreme fluctuations in currency exchange rates that can result in the recognition of significant gains or losses during any period. In 2007 we recognized no loss because of currency transactions. In 2007, the loss was $0. This is mainly due to lack of any business while the bankruptcy proceedings were under way. We had a cumulative foreign currency translation adjustment of $1,457,263 as of December 31, 2007. We do not currently employ any hedging techniques to protect against the risk of currency fluctuations.

We had an accumulated deficit of $192,465,764, as of December 31, 2007, substantially all of which has been funded out of proceeds received from the issuance of stock and the incurrence of payables. As of December 31, 2007, we had total current assets of approximately $(12,000) and total current liabilities of approximately $12 million resulting in negative working capital of approximately $12 million. As of December 31, 2007, our balance sheet reflected approximately $0 in mineral interests in properties not subject to amortization, net of valuation allowance. These properties are held under licenses or concessions that contain specific drilling or other exploration commitments and that expire within one to three years, unless the concession or license authority grants an extension or a new concession license, of which there can be no assurance. If we are unable to establish production or resources on these properties, obtain any necessary future licenses or extensions, or meet our financial commitments with respect to these properties, we could be forced to write off the carrying value of the applicable property.

Throughout our existence, we have relied on cash from financing activities to provide the funds required for acquisitions and operating activities. Our financing activities used net cash of approximately $0 and $0, during the years ended December 31, 2007 and 2006, respectively, and provided () during the year ended December 31, 20067 This net cash has been used principally to fund net operating losses of approximately $,9, $5.1 million and $18.5 million during those three years. Our operating activities use d$(885,157) of net cash during the year ended December 31, 2007 and $( 1,192,874) in the year ended December 31, 2006, and provided net cash of approximately $(1,267,00) during the year ended December 31, 2007. A portion of our cash was used in acquiring mineral interests, property and equipment, either directly or indirectly through the acquisition of subsidiaries, with approximately, $0, $0.9 million, and $3.7 million provided by (used) in investing activities for the years ended December 31, 2007, 2006 and 2005, respectively, of which approximately $0, $0.5 million and $0.1 million, respectively, was used in acquiring mineral interests.

While we had no cash on hand of as of December 31, 2007, we have short-term and long-term financial commitments with respect to exploration and drilling obligations related to our interests in mineral properties and potential litigation liabilities. Many of our projects are long-term and will require the expenditure of substantial amounts over a number of years before the establishment, if ever, of production and ongoing revenues. As noted above, we have relied principally on cash provided from equity and debt transactions to meet our cash requirements. We do not have sufficient cash to meet our short-term or long-term needs and we will require additional cash, either from financing transactions or operating activities, to meet our immediate and long-term obligations. There can be no assurance that we will be able to obtain additional financing, either in the form of debt or equity, or that, if such financing is obtained, it will be available to us on reasonable terms. If we are able to obtain additional financing or structure strategic relationships in order to fund existing or future projects, existing shareholders will likely experience further dilution of their percentage ownership of the Company.

If we are unable to establish production or reserves sufficient to justify the carrying value of our assets or to obtain the necessary funding to meet our short and long-term obligations or to fund our exploration and development program, all or a portion of the mineral interests in unproven properties will be charged to operations, leading to significant additional losses.

The amounts presented in our consolidated financial statements do not provide for the effect of inflation on our operations or our financial position. Amounts shown for property, plant and equipment and for costs and expenses reflect historical costs and do not necessarily represent replacement costs or charges to operations based on replacement costs. Our operations, together with other sources, are intended to provide funds to replace property, plant and equipment as necessary. Net income would be lower than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments. Due to inflationary problems in Eastern Europe reflected in currency exchange losses, we have experienced losses on the values of our assets in those countries in prior periods.

We conduct business in many foreign currencies. As a result, we are subject to foreign currency exchange rate risk due to effects that foreign exchange rate movements of those currencies have on our costs and on the cash flows that we receive from foreign operations. We believe that we currently have no other material market risk exposure. To date, we have addressed our foreign currency exchange rate risks principally by maintaining our liquid assets in interest-bearing accounts in U.S. dollars, until payments in foreign currency are required, but we do not reduce this risk by hedging. For further discussion of our policies regarding derivative financial instruments and foreign currency translation, see Note 1 to our Consolidated Financial Statements contained in “Item 8. Financial Statements and Supplementary Data.”

The consolidated financial statements of the Company and its subsidiaries, together with note and supplementary data related thereto, are set forth following pages F-1 of this Report.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Certain Information Regarding Executive Officers, Directors and Control Persons

The following table contains information about each individual who was a director or executive officer of EuroGas as of December 31, 2006, together with all positions and offices of the Company held by each and the term of office and the period during which each has served.

The following paragraphs set forth brief biographical information for each of the aforementioned directors and executive officer:

Wolfgang Rauball. Mr. Rauball was appointed director of the Company in November 2000 and President/Chairman in July 2001. He is also Managing Director of EuroGas Austria GesmbH and Globegas BV. Mr. Rauball has worked for the Company in various functions since 1994. Mr. Rauball attended Darmstadt Technical University in Germany from 1967 through 1971. During the period 1976-1986, his consulting activities were primarily for companies conducting exploration for gold and base metal ore bodies in Canada, the United States and South America. Wolfgang Rauball arranges financing for business enterprises, primarily public companies engaged in the resource industry.

Hank Blankenstein. Mr. Blankenstein was appointed a director and chief financial officer of the Company in May of 2002. Mr. Blankenstein,, served as a director and financial vice president of the Company from 1995 until 2000. Mr. Blankenstein has more than 30 years experience at various levels of management. From April 2000 until his appointment to the board and CFO, Mr. Blankenstein was involved in several real estate development projects. Mr. Blankenstein holds a Bachelor of Science degree in Finance and Banking from Brigham Young University.

Michael J. Slater. Mr. Slater was appointed as president of the Company in February of 2002. Mr. Slater has spent the last 25 years working for Texaco in various technical positions. His most recent responsibility was as Vice-President, Negotiations, Texaco Exploration. He worked on and developed exploration projects in Europe, the former Soviet Union (“FSU”), the North Sea and Africa with emphasis on Eastern Europe and the FSU. He held that position from October 1995 until joining the Company. Mr. Slater holds a BS in Geology from Kings College, London and a PhD in geology from Cambridge University. Mr. Slater resigned after his contract ran out in February of 2005.

Andreas Danicek. Mr. Danicek was appointed a director in December of 2003. He spent the last several years working extensively with computer graphics, mainly designing web sites for various organizations including EuroGas, Inc. He spent the previous four years in various marketing positions including as an account executive having to do with the high technology industry. He holds a technical degree from a University in Austria. Mr. Danicek resigned his position in 2008.

Mr. Andraczke resigned from all activities of EuroGas, Inc. and its subsidiaries in March 2006.

Section 16(a) of the Exchange Act requires our officers, directors and certain shareholders to file reports concerning their ownership of our common stock with the SEC and to furnish to us copies of such reports. Based solely upon our review of the reports required by Section 16 and amendments thereto furnished to us, we believe that all reports required to be filed pursuant to Section 16(a) of the Exchange Act were filed with the SEC on a timely basis.

The Company's Board of Directors has not yet appointed an audit committee. The Company expects to form an audit committee and to establish a written code of ethics for its executive officers and directors during 2009.

The following table sets forth information relating to the compensation of all persons who served as the Chief Executive Officer of EuroGas during the year ended December 31, 2007, and other persons serving as executive officers of EuroGas as of December 31, 2007, (collectively, the “Named Officers”).

Long-Term Compensation

Annual Compensation

Awards

Payouts

Other

Restricted

Securities

Name and

Salary

Annual

Stock

Underlyiing

LTIP

All Other

Principal

Year

($)

Bonus

Compensation

Awards

Options/

Payouts

Compensation

Position

($)

SARs

($)

(#)

Wolfgang

2007

$300,000

Nil

Rauball

50,000

President,

2006

$300,000

CEO ⁽¹⁾

2005

$300,000

2004

$300,000

2003

$300,000

			Long-Term
			Compensation
Michael Slater	Annual Compensation		Awards	Payouts

President ⁽²⁾	2005	$66,6667

	2004	$400,000

	2003	$400000

	2002	$400000

Hank	2007	$180000	Nil	Nil
Blankenstein
Chief	2006	$180000
Financial
Officer ⁽³⁾	2005	$180000

	2004	$180000

On February 5, 2002, EuroGas entered into an employment agreement with its new President. The three-year agreement, which expired in February of 2005 and was not renewed, provides for annual compensation of $400,000 to be paid in monthly installments. The agreement provides for all terms of the agreement to continue for the unexpired term of the agreement should the Company be involved in winding-up or merger transaction. The agreement may be terminated if either party fails to meet its obligations under the terms of the agreement.

Compensation Committee Interlocks and Insider Participation in Compensation Decisions

As of December 31, 2007, the Compensation Committee consisted of the Board of Directors. The Board of Directors as of December 31, 2007, included:

Wolfgang Rauball, who since July 2001 has served as President and CEO and interim CFO of EuroGas, and who also serves as Managing Director of EuroGas Austria GesmbH since 1998 and as Managing Director of GlobeGas B.V. Amsterdam since 1996.

Notwithstanding anything to the contrary set forth in any of the Company’s previous filings under the Securities Act or the Exchange Act that incorporates by reference, in whole or in part, subsequent filings, including, without limitation, this Annual Report on Form 10-K, the Compensation Committee Report and the Performance Graph set forth below shall not be deemed to be incorporated by reference in any such filings.

As required by rules promulgated by the SEC, this Compensation Committee Report describes the overall compensation goal and policies applicable to our executive officers, including the basis for determining the compensation of executive officers for the 2007 fiscal year.

General. Management compensation is overseen by the Board of Directors. In July 1999, the Board established a Compensation Committee comprised of Dr. Gregory P. Fontana, Dr. Hans Fischer and Rudolph Heinz, who also constituted the Compensation Committee on December 31, 1999. However, Mr. Fischer, Mr. Heinz and Mr. Fontana have subsequently resigned, and the Compensation Committee has been dissolved. Accordingly, the following compensation report was prepared by Board members serving as of December 31, 2007.

Compensation Objectives. In determining the amount of compensation for our executive officers, the Board is guided by several factors. Because we have only two employees, compensation practices are flexible in response to the needs and talents of the individual officer and are geared toward rewarding contributions that enhance stockholder value. Historically, we have compensated senior management based on the perceived contribution to the development of our operations, consisting principally of salaries believed to reflect their contributions. In addition, because we have only recently begun to generate revenues from operations and have attempted to preserve capital for development of our business and operations, we have used stock options as a form of compensation for executive officers. The use of stock options is designed to align the interests of the executive officers with the long-term interests of EuroGas and to attract and retain talented employees who can enhance our value. Although certain members of the Board are also executive officers, none participates in the determination of his own compensation.

Compensation Components. The compensation of our executive officers consists of three components: base salary, bonuses and long-term incentive awards in the form of stock options. The Board establishes base salaries based primarily on its objective judgment, taking into consideration both qualitative and quantitative factors. Among the factors considered by the Board are:

From time to time, we also compensate our executive officers in the form of bonuses. Because we are presently in an early stage of development and do not have a history of earnings per share, net income, or other conventional data to use as a benchmark for determining the amount or existence of bonus awards, any bonuses granted by the Board in the near term will be based upon its subjective evaluation of each individual’s contribution to EuroGas. In some cases, however, bonuses payable to executive officers may be tied to specific criteria identified at the time of engagement. For the years ended December 31, 2005, 2006 and 2007, the Board did not pay bonuses to any executive officers. The Board’s action was based on its conclusion that, despite the superior personal performance of the executive officers, no cash incentive bonuses should be awarded, due to the Board’s desire to preserve capital for future growth and development.

The third component of our compensation structure consists of the grant of stock options to compensate executive officers and other key employees. Having granted all options available under the 1996 Stock Option and Award Plan, on November 20, 1999, the Board determined to grant options outside of any option plan (but on terms and conditions identical to those contained in our 1996 Stock Option and Award Plan), to certain officers, directors and outside consultants. The purpose of such options is to give each option recipient an interest in preserving and maximizing shareholder value in the long term, to reward option recipients for past performance and to give option recipients the incentive to remain with EuroGas over an extended period. The right to determine the amount of such grants was delegated to the Compensation Committee based on its assessment of the proposed recipients’ current and expected future performance, level of responsibilities, and the importance of his or her position with, and contribution to, EuroGas. No new opition plans have been approved at this time.

Chief Executive Compensation. Mr. Rauball had a salary of $300,000 as a director and CEO and Mr. Hank Blankenstein had a salary of $180,000 as a Director and CFO. Consistent with the Board’s desire to preserve capital for future growth and development, the Board elected not to pay a bonus to any executive officer for the 2006and 2007 fiscal years. The Company has not had any funds to compensate it officers for at least the last 6 years and is looking towards using company common stock to pay these individuals.

Use of Consultants. We anticipate continuing to rely on executive management and outside consultants in connection with the acquisition of additional projects and the initial development of existing projects. However, we anticipate that, if able to establish ongoing revenues from production, we will retain management personnel as employees of EuroGas and compensate them on a salary basis, based on comparable compensation packages offered by employers within our general industry and geographical area.

The following graph shows a comparison of cumulative shareholder return for our common stock for the period beginning December 31, 2002 and ending December 31, 2007, as well as the cumulative total return for the NASDAQ Composite Index and the Howard Weil, Bloomberg Oilfield Service and Manufacturing Index. The Peer Group Index is a price-weighted composite index comprised of the cumulative shareholder return for forty-seven companies involved in oilfield services.

The performance graph assumes that $100 was invested at the market close on December 31, 2002 and that dividends, if any, were reinvested for all companies, including those on the NASDAQ Composite Index and the Peer Group Index.

[Graph]
Total Return Analysis
		12/31/02		12/31/03		12/31/04		12/31/05		12/31/06		12/31/07
EuroGas	$	100.00	$	12.28	$	7.00	$	1.52	$	0.65	$	.03

Dow Jones US Oil	$	100.00	$	92.03	$	129.20	$	88.34	$	145.78	$	152.83

Companies
Secondary Index
(symbol: OIS)
NASDAQ Composite	$	100.00	$	78.33	$	134.00	$	123.67	$	135.89	$	142.75

The following beneficial ownership table sets forth information regarding beneficial ownership of our common stock as of December 31.2007 by:

Under relevant provisions of the Exchange Act, a person is deemed to be a “beneficial owner” of a security if he or she has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is also deemed to be a beneficial owner of any securities of which that person has the right to acquire beneficial ownership in 60 days. More than one person may be deemed to be a beneficial owner of the same securities. The percentage ownership of each stockholder is calculated based on the total number of outstanding shares of our common stock as of April 30, 2006, plus those shares of our common stock that the stockholder has the right to acquire within 60 days. Consequently, the denominator for calculating the percentage ownership may be different for each stockholder. Unless otherwise indicated, the address of these individuals is the same as the Company’s principal executive offices.

The table is based upon information provided by our directors and executive officers.

Wolfgang Rauball currently serves as our CEO and is a director and a significant shareholder of the Company. Over the past three years, we have entered into several transactions with Mr. Rauball or with entities controlled by him, as outlined in this Item 13.

During June of 2002 the Company issued Mr. Rauball 10,000,000 shares of its common stock and warrants for an additional 10,000,000 shares in a subscription on a private placement. The 10,000,000 shares of common stock were issued at a price of $0.10 per share, the warrants were issued at an exercise price of $0.125 per share if converted before June 10, 2003 and an exercise price of $0.15 after that but before June 10, 2004, these warrants were extended in 2004 for an exercise price of $.05 and expiration of June 10, 2010.. The Chief Executive Officer and principal shareholder of EuroGas, together with various other companies under his control, have paid miscellaneous business expenses on behalf of EuroGas, and EuroGas has paid certain expenses on their behalf. The resulting receivables and payables were combined and presented in the accompanying financial statements as notes payable to related parties of $416,858 as of December 31, 2001. During the six months ended June 30, 2002 EuroGas made additional payments of $535,574 on behalf of the officer.

During June 2002, EuroGas entered into a compensation agreement with Mr. Rauball that provides the officer with $300,000 of compensation for his prior services. The compensation was charged to operations during June 2002. The resulting $381,284 payable to the officer was converted into common stock as further described above.

Additionally, Hank Blankenstein, our Chief Financial Officer, assigned $200,000 of accrued salary, which accrual arose during his service to the Company during 2000, to the Chief Executive Officer.

During 2006 and 2007 monies were provideded by a third party shareholder as a loan to the company to keep it solvent. This amounted to approximately $300,000 US over the two year period.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and are communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

(a) Evaluation of Disclosure Controls and Procedures. Within 90 days prior to the date of this report, our Chief Executive Officer and Chief Financial Officer conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as amended). Based on the foregoing, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective.

(b) Changes in Internal Controls. There were no significant changes in our internal controls or in other factors that could significantly affect those internal controls subsequent to the date of the evaluation, nor were there any significant deficiencies or material weaknesses in our internal controls. As a result, no corrective actions were required or undertaken.

EuroGas, Inc. has been notified by Texas Euro Gas Corp., a Houston Texas. based private company (The “independent party”), that it has purchased the Judgment against EuroGas, Inc. and others in the original amount of $113 Million, plus accrued interest thereon. The Judgment against the Company et. al. was originally obtained in the South Texas Bankruptcy Court by the Bankruptcy Trustee of Mckenzie estate, Trustee Steve Smith, of Houston, Texas in 2007. The independent party has received an assignment of the Judgment from Trustee Smith on September 24, 2007 after the Honorable Judge Brown of the South Texas Bankruptcy Court approved the sale of the Judgment on August 22, 2007 by Court Order. Trustee Smith had forced EuroGas, Inc. into involuntary bankruptcy (Chapter 7) in the fall of 2004 and EuroGas, Inc.'s remaining assets were sold at public auction in March 2006 in Salt Lake City, Utah. The involuntary bankruptcy of EuroGas, Inc. was closed and terminated by Court Order of the Utah Bankruptcy Court earlier this year.

The independent party paid $1.6 million US cash to the McKenzie Bankruptcy Trustee as specified and approved by the August 22, 2007 Court Order of the South Texas Bankruptcy Court as well as certain legal fees to consummate the transaction. The independent party has committed to hold further discussion to provide working capital and assets for EuroGas, Inc. in exchange for equity in the Company. The independent party has also informed the Company that it will not seek legal redress towards the Company and others after having obtained the Judgment and is prepared to negotiate with the Company and others in order to enable the Company to redeem the Judgment.

EuroGas, Inc. is announcing that it offices have moved to New York and plans to open an office in Salt Lake City, Utah. The new office address in NY is as follows

In the fall of 2003 TransUnited Corp., an independent finance company, agreed to finance the Company and subscribed to a private placement in the Company’s shares, however, never paid the committed funds to the Company and was in default as to the original payment by way of a Private Placement in the Company’s stock in the amount of $250,000. The Company originally negotiated this Private Placement with TransUnited in the fall of 2003 with additional funds to be provided by TransUnited in early 2004 to enable the Company to fund a settlement agreement between the Company and certain creditors. The $ 500,000 was to be used by the Company as a down-payment under a settlement agreement entered into between the company and Trustee Smith in order for Trustee Smith not to begin bankruptcy proceedings against the Company in the fall 2003.

Unfortunately TransUnited didn’t provide the promised funds in a timely manner so that the Company’s CEO Wolfgang Rauball had to step in and had to provide the down-payment in the amount of $500,000.00 in order to stop Trustee Steve Smith from taking immediate legal bankruptcy action against the company. On October 10, 2003 and November 5, 2003 Wolfgang Rauball by way of personal short-term loans provided payments of $250,000 .00each for a total of $500,000.00 as down-payment under the settlement agreement (see EuroGas 10-K for 2003). Since it was agreed with Mr. Rauball that he would be repaid by the Company immediately, Mr. Rauball demanded repayment of his short-term loans in early 2004.

However, the Company was unable to repay Mr. Rauball and therefore accepted an offer from McCallan Oil&Gas (UK) Ltd. and its shareholders. McCallan, an unrelated private British company registered in Cardiff, UK and its shareholders agreed to repay Mr. Rauball on behalf of the Company with the specific understanding to be getting reimbursed by the Company either in cash from the funds which TransUnited had committed to, or McCallan and its shareholder would receive common stock of the Company for the $ 500,000 payment under the same terms and conditions of the private placement the Company had agreed with TransUnited.

In the meantime TransUnited kept assuring the Company to follow-up on its initial funding comittment and to provide possibly further working capital funds to the Company, but wanted proof of the shares having been issued first. The Company hoping that funds would be made available by TransUnited upon the physical issue of the shares, reluctantly issued them but did not hand them over to TransUnited and kept the shares in its possession. Unfortunately the creditors of the Company due to lack of funds started legal action and proceeded to place the Company into involuntary bankruptcy.

Fortunately the Company managed to get out of bankruptcy in February 2007 by order of the Utah Bankruptcy Court. McCallan and its shareholders recognizing that the company is out of bankruptcy approached the company now with the request to be getting reimbursed for the funds provided over 3 years ago.

Fortunately the Company managed to get out of bankruptcy in February 2007 by order of the Utah Bankruptcy Court. McCallan recognizing that the company is out of bankruptcy approached the company now with the request to be getting reimbursed for the funds provided over 3 years ago.

Since EuroGas, Inc, presently does not have sufficient funds to repay McCallan the Company proposed to McCallan to issue a similar amount of shares as was issued to TransUnited more than 3 years ago. The TransUnited shares have been returned in full to the Company’s treasury for cancellation.

Exclusive Advisory and Investment Banking Engagement Agreement between Spencer Clarke LLC and EuroGas, Inc., dated January 3, 2007. Spencer Clarke, a New York based Investment House was introduced to the Company by Mr. Dan Killian, a Vice-President of Standard and Poors in New York and Mr. Joel Brownstein. Both gentlemen were given a stock option as consideration for their services.

Under the terms of the Agreement Spencer Clarke will assist the Company in helping obtain its re-listing on the Bulletin Board, once the company has met all of the NASD requirements. Spencer Clarke may also assist the Company in future financings on an as need basis.

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

1. Financial Statements. The following Consolidated Financial Statements of the Company and report of independent accountants are included immediately following the signature page of this Report.

During the last quarter of the fiscal year ended December 31, 2007, the company filed several items on Form 8K. (See item 14.A for information)

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Due to lack of funding at this point, in particular the in ability to pay our auditors, we are forced to issue our annual statement with only information that is prepared by the EuroGas management. The accompanying financial statements have not been audited by an independent certified public accountant and when an audit is completed the Form 10-K will be amended to include audited financial statements.

EUROGAS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Basis of Presentation - The accompanying condensed consolidated financial statements are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. The Company believes that the following disclosures are adequate to make the information presented not misleading.

These condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) that, in the opinion of management, are necessary to present fairly the financial position and results of operations for the periods presented.

Business Condition — EuroGas has accumulated a deficit of $192,465,764 through December 31, 2007. EuroGas has had no revenue, losses from operations and negative cash flows from operating activities during the years ended December 31, 2007 and 2006 and 2005. At December 31, 2007, the Company had a working capital deficiency of $28,573,773 and a capital deficiency of $14,893,149. The Company has impaired or been forced to sell most of its oil and gas properties. These conditions raise substantial doubt regarding the Company's ability to continue as a going concern. Realization of the investment in properties and equipment is dependent upon management obtaining financing for exploration, development and production of its properties. In addition, if exploration or evaluation of property and equipment is unsuccessful, all or a portion of the remaining recorded amount of those properties will be recognized as impairment losses. Payment of current liabilities will require substantial additional financing. Management of the Company plans to finance operations, explore and develop its properties and pay its liabilities through borrowing, through sale of interests in its properties, through advances received against future talc sales and through the issuance of additional equity securities. Realization of any of these planned transactions is not assured.

Principles of Consolidation — The accompanying consolidated financial statements include the accounts of EuroGas, Inc., its formerly majority-owned subsidiaries and EuroGas' share of properties held through joint ventures. All significant intercompany accounts and transactions have been eliminated in consolidation.

Stock-Based Compensation — At December 31, 2007, the Company had no options outstanding that had been previously granted to employees and consultants. The Company accounts for stock options granted to employees under APB Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations and accounts for options granted to non-employees at their fair value under SFAS No. 123, Accounting for Stock-Based Compensation. No stock-based employee compensation expense is reflected in net loss during the periods presented in the accompanying financial statements as all options had an exercise price equal to the market value of the underlying common stock on the date of grant or the related compensation was recognized in earlier periods. There would not have been any effect to net loss or to basic and diluted loss per common share if the Company had applied the fair value recognition provisions of SFAS No. 123 to stock-based employee compensation as the related compensation was recognized in earlier periods.

Reclassifications — Certain reclassifications have been made to the accompanying December 31, 2006 and December 31, 2007 financial statements to conform to the current period presentation.

Recent Accounting Pronouncements — The Company adopted SFAS No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections as of January 1, 2003. Among other provisions, this statement modifies the criteria for classification of gains or losses on debt extinguishment such that they are not required to be classified as extraordinary items if they do not meet the criteria for classification as extraordinary items in APB Opinion No. 30, Reporting the Results of Operations – Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions. The adoption of this standard did not have any effect on the Company’s financial position or results of operations.

The Company also adopted SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities as of January 1, 2003. SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be recognized at fair value when the liability is incurred. The provisions of this statement did not have any effect on the Company’s financial position or results of operations.

EUROGAS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

The Company’s primary investment in securities consists of 209,550 pre-split shares of Enterra Energy Ltd.. The Enterra units which are trading on the New York Stock Exchange and Toronto Stock Exchange are held as collateral by Oxbridge Limited under a claim, as discussed in Note 3. At June 30, 2003, the Company changed its expectation of realizing proceeds from the sale of the Enterra shares/units to more than one year and reclassified the investment in the Enterra shares/units as a long-term asset. The Company’s investments in equity securities, including the Enterra shares/units, are accounted for as available for sale, as defined by SFAS No. 115, as they have readily determinable fair values and are not restricted other than in connection with being pledged as collateral. Accordingly, the investments in securities available for sale are carried at market value with unrealized gains and losses included in accumulated other comprehensive

income (loss). The cost of securities sold is determined by the average-cost method. The investments in securities consisted of the following:

Oxbridge Settlement — During 1997, Oxbridge Limited requested EuroGas in writing to convert its 2,391,968 Series 1995 Preferred Stock into 4,782.936 EuroGas common shares as stipulated by the conversion by-laws of the Preferred Stock. At that time EuroGas common shares were actively trading in the $ 10-12 per share range, but Oxbridge’s request to convert was effectively prevented by an order obtained by the Trustee in the McKenzie bankruptcy case as described below. As a result, Oxbridge was unable to receive any proceeds from the sale of the conversion of the Preferred Shares into EuroGas Inc. common shares when the average market prices of the common shares was appr. $ 10 per share and when substantial daily trading volume of several millions of shares a day could have resulted in proceeds to Oxbridge of up to $ 50,000.000. In 1997 Oxbridge has filed an official claim against EuroGas for its losses. After discussions with Oxbridge during 2002 EuroGas estimated the cost to settle the Oxbridge claim to be approximately $6,800,000. That amount is included in the accrued settlement obligation as of December 31, 2007.

McKenzie Bankruptcy Claim — This litigation is being brought by Steve Smith, Chapter 7 Trustee (the “Trustee”) for the bankruptcy estates of Harven Michael McKenzie, Debtor; Timothy Stewart McKenzie, Debtor; Steven Darryl McKenzie, Debtor (case no. 95-48397-H2-7, Chapter 7; case no. 95-48474-H2-7, Chapter 7; and case no. 95-50153-H2-7, Chapter 7, respectively), pending in the United States Bankruptcy Court for the Southern District of Texas, Houston Division.

EUROGAS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

received from the development of the Pol-Tex Concession in Poland. The Company has contested the jurisdiction of the Court, and the Trustee’s claim against a Polish corporation (Pol-Tex), and the ownership of Polish mining rights. The Company further contends that it paid substantial consideration for GlobeGas (Pol-Tex’s parent), and that there is no evidence that the creditors of the McKenzies invested any money in the Pol-Tex Concession.

In March of 1997, the Trustee brought a related suit W. Steve Smith, Trustee v. Bertil Nordling, Rolf Schlegal, MCK Development B.V. Claron N.V., Jeffrey Ltd., Okibi N.V., McKenzie Methane Poland Co., Harven Michael McKenzie, Timothy Stewart McKenzie, Steven Darryl McKenzie andEuroGas, Inc., (Adv. No. 97-4155) in each of the three McKenzie individual bankruptcy cases. In general, the action asserts that the defendants, other than the Company, who acquired an interest in the Polish Project, received a fraudulent transfer of assets belonging to the individual McKenzie bankruptcy estates, or are alter egos or the strawmen for the McKenzies. As a result, the Trustee asserts that any EuroGas stock or cash received by these defendants should be accounted for and turned over to the Trustee. As to the Company, the Trustee asserts that as transfer agent, the Company should turn over the preferred stock presently outstanding to the defendants or reserve such shares in the name of the Trustee and that any special considerations afforded these defendants should be canceled. It appears the Company was named to this litigation only because of its relationship as transfer agent to the stock in question. This suit has been administratively consolidated with 97-4114, and is currently pending before the Houston bankruptcy court.

In June 1999, the Trustee filed another suit in the same bankruptcy cases styled Steve Smith, Trustee, vs. EuroGas, Inc., GlobeGas, B.V., Pol-Tex Methane, SP. Z.O.O., et al (Adv. No. 99-3287). That suit sought sanctions against the defendants for actions allegedly taken by the defendants during the bankruptcy cases which the Trustee considered improper. The defendants filed a motion to dismiss the lawsuit, which was granted in August 1999. In July 1999, the Trustee also filed a suit in the same bankruptcy cases styled Steve Smith, Trustee, vs. EuroGas, Inc., GlobeGas, B.V., Pol-Tex Methane, SP. Z.O.O. (Adv. No. 99-3444). This suit seeks damages in excess of $170,000 for the defendants’ alleged violation of an agreement with the Trustee executed in March 1997. EuroGas disputes the allegations and has filed a motion to dismiss or alternatively, to abate this suit, which motion is currently pending before the court.

These causes of action claim that the Company and certain of its officers, directors or consultants cooperated or conspired with the McKenzies to secret or conceal the proceeds from the sale of the Polish Concession from the Trustee. In January 2000, this motion was granted by the bankruptcy court. The Company is vigorously defending this suit. On March 18, 2002, the court considered motions to dismiss filed by EuroGas and the Rauballs (other named defendants). These motions are currently pending before the Court. No trial date has been set.

On March 18, 2002, the court considered motions to dismiss filed by EuroGas and the Rauballs (other named defendants). On September 10, 2002, the Court entered an Order which required the Trustee to specify the causes of action asserted against each Defendant. A few days prior to this Order, the Trustee filed his Second Motion for Leave to Amend and Supplement Pleadings and to Drop Certain Defendants (the “Second Motion”). On October 21, 2002, EuroGas and other Defendants filed their Response to the Second Motion. On November 11, 2002, the Trustee filed his Motion and Reply to this Response under which, in part, Trustee sought court approval to file a Third Amended Complaint. On March 13, 2003 the Court entered and Order Granting Trustee’s Motion for Leave to Amend.

On March 13, 2003 the Trustee filed his Third Amended Complaint, which is now styled Steve Smith, Trustee v. Harven Michael McKenzie, McKenzie Methane Poland, Inc., EuroGas, Inc., Wolfgang Rauball,

EUROGAS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Reinhard Rauball, MCK Development, B.V., Claron, N.V., Jeffrey, Ltd. and Okibi N.V. (Adv. No. 97-4114 and 97-4115). As to EuroGas, the Third Amended Complaint asserts claims for breach of contract, fraud in the inducement, conspiracy, aiding and abetting civil conspiracy, fraudulent transfer and punitive damages. As to Wolfgang and Reinhard Rauball, the Complaint asserts claims for turnover under Section 542 and 543 (Reinhard Rauball only) of the Bankruptcy Code, conversion, post-petition avoidable transfers, civil conspiracy, aiding and abetting civil conspiracy and punitive damages. The Company has filed a Motion to Dismiss the Third Amended Complaint. A trial date set for November 2003 was postponed pending a settlement agreement described below. Management’s estimate of the amounts due under the claims made by the Trustee and his attorneys have been adequately accrued in the accompanying financial statements.

Kukui, Inc. Claim — In November 1996, the Company entered into a settlement agreement with Kukui, Inc. ("Kukui"), a principal creditor in the McKenzie bankruptcy case, whereby the Company issued 100,000 common shares and an option to purchase 2,000,000 additional common shares, which option expired on December 31, 1998. The Company granted registration rights with respect to the 100,000 common shares issued. On August 21, 1997, Kukui asserted a claim against EuroGas, which was based upon an alleged breach of the 1996 settlement agreement as a result of the Company's failure to file and obtain the effectiveness of a registration statement for the resale by Kukui of the 100,000 shares delivered to Kukui in connection with the 1996 settlement. In addition, the Estate of Bernice Pauahi Bishop (the “Bishop Estate”), Kukui's parent company, entered a claim for failure to register the resale of common shares subject to its option to purchase up to 2,000,000 common shares of EuroGas. EuroGas denied any liability and filed a counterclaim against Kukui and the Bishop Estate for breach of contract concerning their activities with the McKenzie Bankruptcy Trustee.

In December 1999, EuroGas signed a settlement agreement with the bankruptcy Trustee, and other parties, including Kukui, Inc., and the Trustees of the Bishop Estate, which had pursued separate claims against EuroGas (the “Settlement Agreement”). The Settlement Agreement, in part, required EuroGas to pay $900,000 over 12 months and issue 100,000 shares of registered common stock to the Bishop Estate by June 30, 2000. The bankruptcy court approved the Settlement Agreement on May 23, 2000. The claims of Kukui, Inc. and the Trustees of the Bishop Estate have been dismissed pursuant to the terms of the Settlement Agreement. Under the terms of the Settlement Agreement, EuroGas recorded an accrued settlement obligation and litigation settlement expense of $1,000,000 during 1999, paid Kukui $782,232 of the settlement obligation in 2000 and accrued an additional settlement obligation liability and expense of $251,741 during 2000. During 2000, EuroGas issued the Bishop Estate 100,000 registered common shares, which were valued at $100,000, or $1.00 per share. The resulting accrued settlement obligation of $369,509 for the estimated cost of settling the claim included an estimated default penalty and interest. The Company contends that it has fully performed under the Settlement Agreement and that the Settlement Agreement additionally entitles the Company to a complete release and dismissal of all suits filed by the Bankruptcy Trustee. The Bankruptcy Trustee contends that EuroGas defaulted under the Settlement Agreement and is not entitled to a release or dismissal.

Holbrook Claim — On February 9, 2001, James R. Holbrook, a documents escrow agent appointed under the Settlement Agreement, filed his Complaint of Escrow Agent for Interpleader and for Declaratory Relief against EuroGas, the Trustee and the other parties to the settlement in an action styled James R. Holbrook v. W. Steve Smith, Trustee, Kukui, Inc., EuroGas, Inc. and Kruse Landa & Maycock, L.L.C., (Adv. No. 01-3064) in the McKenzie bankruptcy cases. Under this complaint, Holbrook sought a determination of the defendants’ rights in certain EuroGas files that he had received from Kruse Landa and Maycock, former attorneys for EuroGas. Through this litigation, the Trustee sought turnover of all these files pursuit to the Settlement Agreement. EuroGas has opposed turnover of privileged materials and filed a cross- claim in the suit asking for a declaratory judgment that the Settlement Agreement is enforceable and that the Trustee be ordered to specifically perform his obligations under the Settlement Agreement. The Trustee filed a counterclaim requesting specific performance by EuroGas and other relief. At the direction of the court, both parties filed motions for summary judgment. On December 17, 2001, the court entered an order granting Trustee’s Motion for Summary Judgment and denying a related Motion to Strike Affidavit, which EuroGas had filed. EuroGas has appealed this order to the United States District Court for the Southern District of Texas. On September 25, 2002 the District Court entered its Opinion and Order affirming the

EUROGAS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Bankruptcy Court’s orders. On October 25, 2002 EuroGas filed a notice of appeal of the District Court’s order to the Fifth Circuit Court of Appeals. The appeal is currently pending before this Court. EuroGas cannot predict the outcome of these appeals, but intends to vigorously pursue the appeals to completion.

Settlement of McKenzie Claims — On November 4, 2003, EuroGas signed a settlement agreement with the Bankruptcy Trustee, Kukui, and other parties. The settlement agreement called EuroGas to make payments totaling $2,800,000, to be paid in installments, with an initial payment of $250,000 paid November 5, 2003 and $250,000 to be paid by December 6, 2003. Payment terms for the remaining balance will be negotiated between EuroGas, Kukui and the Bankruptcy Trustee. Upon completion of the payments all the cases relating to the McKenzie bankruptcy claim, including the Kukui, claim, and the Holbrook claim, as described below, will be dismissed. Under this settlement EuroGas, its subsidiaries, Wolfgang Rauball and Reinhard Rauball will be released from any further claim by Kukui and the Bankruptcy Trustee Uponcompletion of the payments all the cases relating to the McKenzie bankruptcy claim, including the Kukui, claim, and the Holbrook claim will be dismissed. Under this settlement EuroGas, its subsidiaries, Wolfgang Rauball and Reinhard Rauball will be released from any further claim by Kukui and the Bankruptcy Trustee. A third party investor has indicated that he is prepared to place the required settlement amount in a trust fund in the very near future to obtain a settlement. In the meantime the Bankruptcy Trustee has filed a petition in US Bankruptcy court in Salt Lake City, Utah to have EuroGas, Inc. forced into involuntary bankruptcy. EuroGas has retained local council and has responded to the claim. A hearing, on the petition, is now set for August 17, 2004. In the meantime the creditor, Trustee Smith, has filed a petition in the US Bankruptcy Court in Salt Lake City, Utah to have EuroGas, Inc. forced into involuntary bankruptcy under Chapter 7. EuroGas has retained local council and has responded to the claim. Because Eurogas was unable to continue financing the settlement agreement with Trustee Smith the Bankruptcy Court in Houston Texas has added a monetary amount of $113 million to the default judgment, against EuroGas, Inc. and certain parties. On October 20, an Order for Relief was signed by the US Bankruptcy Court in Salt Lake City, Utah. This has put the Company into bankruptcy under Chapter 7 at this point. Despite the bankruptcy proceedings initiated there are ongoing negotiations with a third european party to purchase the judgment against EuroGas, presently held by the Bankruptcy Trustee Smith, who has forced EuroGas into involuntary Bankruptcy. The plan is to purchase the judgment held by the McKenzie Trustee through a friendly third party and then have the friendly party request the US Bankruptcy Court in Salt Lake City, Utah to remove the present chapter involuntary 7 bankruptcy. During the 4th quarter of 2005 the Bankruptcy Trustee in the EuroGas Chapter 7 proceedings was approached by interested parties to sell the Polish assets of EuroGas. On March 28, 2006 a public auction was held by the Bankruptcy Trustee and the assets were sold at auction to various parties for appr. $ 800,0.000. The Bankruptcy Court in Salt Lake City, Utah confirmed the sale on March 30, 2006. A motion for an appeal by a party which has lost out during the March 28, 2006 auction was denied by the Bankruptcy Court on May 4, 2006 and the original auction sales were confirmed by the Bankruptcy Court. On or about February 20th 2007 a final report was issued by the Bankruptcy Trustee stating that the Eurogas, Inc Bankruptcy case had been formally closed by order of the Bankruptcy Judge, The honorable Judge Thurman, and that the Trustee was no longer involved in the case.. The following order was issued by the Court in Salt Lake City “Upon consideration of the foregoing report and motion for discharge of the Trustee, The Court concluded that the Trustee has completed the administration of the estate (of EuroGas, Inc.) it is ORDERED: 1. That the Trrustee be and is hereby discharged, and the surety on the bond are relieved of further liabillity in this case: 2. .That the within case be and it hereby is closed.” This information was posted on “Pacer” the official document organization for the US Court system. The Company has recently received a revived settlement negotiation with the Bankruptcy Trustee for the McKenzie claim in Houston Texas. The Company will report to the shareholders of the Company as to the progress of these negotiations regarding the settlement. During the summer of 2007 negations continued with the Texas Bankruptcy court and the Court allowed the Trustee to sell the judgment held against the company, which in September of 2007 was sold to a friendly third party, who now holds the judgment. (See 8-K filing in October of 2007regarding sale of judgment)

EUROGAS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Receivable from a Related Party – The Chief Executive Officer and principal shareholder of EuroGas, together with various other companies under his control, have paid miscellaneous business expenses on behalf of EuroGas, and EuroGas has paid certain expenses on their behalf. The resulting receivables and payables are combined and presented in the accompanying financial statements as receivable from related parties of $534,557 and $301,084 as of December 31, 2007 and December 31, 2006, respectively.

Effective January 1, 2003, the Company adopted SFAS No. 143, Accounting for Asset Retirement Obligations, which requires entities to record the fair value of a liability for an asset retirement obligation when it is incurred, which, for the Company, was when the talc mine was opened and as it is mined and when an oil or gas well is drilled or purchased. The standard applies to legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development or normal use of the asset. The Company’s asset retirement obligations relate primarily to the obligation to reclaim property in connection with the talc mine and the obligation to plug and abandon oil and gas wells and support wells at the conclusion of their useful lives.

SFAS No. 143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred, if a reasonable estimate of fair value can be made. When the liability is initially recorded, the related cost is normally capitalized by increasing the carrying amount of the related property. However, for assets that have previously been impaired, the related cost is charged to expense. Over time, the liability is accreted upward for the change in its present value each period until the obligation is settled. The initial capitalized cost, if any, is amortized by the unit-of-production method. At

EUROGAS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

January 1, 2003, the implementation of SFAS No. 143 resulted in a net increase in property and equipment of $140,187. Liabilities increased by $326,177, which represents the establishment of an asset retirement obligation liability. The cumulative effect on prior years of the change in accounting principle of $185,990, or $0.00 per share, was recorded in 2003 as an expense. The effect of adopting this accounting principle was an increase to the loss during the twelve months ended December 31, 2003 of $21,255.

During January 2004, the Company granted an option to Protec Industries Inc., a US public company, to purchase a 49% interest of Rozmin s.r.o., a Slovak mining company which owned a Talc mining property in the Slovak Republic. The total purchase price of the option was Euro 15.000.000 over a period of 3 years and included a down-payment of 500,000 Euro ($627,000 USD), which was paid on January 21, 2004 by Protec Industries, Inc. Upon receipt of the advance payment Protec was granted an irrevocable right to purchase the 49% interest. If the option is exercised before a certain date the advance payment made will be applied to the purchase price. As part of the option Protec Industries, Inc. also received 3,000,000 shares of the Company’s common stock. Due to contractual non-performance by Protec Industries, Inc. the Company has demanded the return of the 3.000.000 shares to the Company or failing the Company will cancel the 3.000.000 shares of common stock.

On March 12, 2004 the Company issued 17,000,000 shares and warrants of its common stock to TransUnited Corporation. The issuance of these shares was in the form of a private placement by TransUnited Corporation, however, TransUnited Corporation failed to provide the payment and the transaction was subsequently cancelled and the shares and the warrants were returned to the treasury of the Company for cancellation.

There are 2,391,968 shares of 1995 Series Preferred Stock (the “1995 Series preferred stock”) issued and outstanding. The 1995 Series preferred stock is non-voting, non-participating and has a liquidation preference of $0.10 per share plus unpaid dividends. The 1995 Series preferred shareholders are entitled to annual dividends of $0.05 per share. Each share of the 1995 Series preferred stock is convertible into two common shares upon lawful presentation of the share certificates. Dividends are payable until converted. EuroGas has the right to redeem the 1995 Series preferred stock on not less than 30 days written notice, at a price of $36.84 per share, plus any accrued but unpaid dividends. Annual dividend requirements of the 1995 Series preferred stock are $119,598.

There are 260 shares of the 1997 Series A Convertible Preferred Stock (the “1997 Series preferred stock”). The 1997 Series preferred stock is non-voting and accrues dividends at $60.00 per share, or six percent annually. The 1997 Series preferred stock has a liquidation preference of $1,000 per share, plus unpaid dividends before liquidation payments applicable to common shares but after liquidation payments to the 1995 Series preferred stock outstanding. The 1997 Series preferred stock, along with unpaid dividends thereon, are convertible into common shares at the rate of $1,000 divided by the lesser of 125% of the average closing bid price for five trading days prior to issuance or 82% of the average closing bid price for five trading days prior to conversion. The 1997 Series preferred stock has a liquidation preference of $260,000. Annual dividend requirements of the 1997 Series preferred stock are $15,600. The following is a summary of the preferred stock outstanding at December 31, 2007:

			Liquidation				Annual Dividend
			Preference				Requirement
	Shares
Designation	Outstanding		Per		Total		Per		Total
			Share				Share
1995 Series	2,391,968	$	0.10	$	239,197	$	0.05	$	119,598
1997 Series A Convertible	260		1,000.00		260,000		60.00		15,600
Total	2,392,228			$	499,197			$	135,198

EUROGAS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Aggregate accrued dividends on preferred stock were $684,160 and $650,824 at December 31, 2007 and December 31, 2006, respectively.

Purchase of Rozmin – EuroGas acquired a direct 43% interest in Rozmin s.r.o. through a series of transactions from 1998 through April 2002. Rozmin s.r.o. holds a talc deposit in Eastern Slovakia. On April 17, 2001, EuroGas entered into an agreement to purchase an additional 57% interest in Rozmin s.r.o. from Belmont Resources, Inc. ("Belmont"), in exchange for EuroGas issuing 12,000,000 common shares, paying Belmont $100,000 in advance royalties, and modifying the exercise price of existing stock options. EuroGas further agreed to issue an additional 1,000,000 common shares for each $0.05 decrease in the ten-day average OTC Bulletin Board quoted trading price of the Company's common shares below $0.30 per share through April 17, 2002. During 2002 EuroGas issued 3,830,000 common shares to Belmont under the stock price guarantee. In connection with the purchase by EuroGas, Rozmin s.r.o. granted an overriding royalty to Belmont of two percent of gross revenues from any talc sold.

EUROGAS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Additionally, EuroGas agreed to issue additional common shares to Belmont if Belmont did not realize approximately $1,218,000 from the resale of the original 12,000,000 common shares by April 17, 2002, and provide notice of such deficiency to EuroGas, to compensate Belmont for the shortfall based on the ten-day average trading price on the date of the notice of shortfall from Belmont. Because Belmont has not provided notice of the sale of the shares and the resulting deficiency, EuroGas is not able to calculate the shares that may be issuable, but estimates it may be obligated to issue additional common shares, based on recent market prices for the Company’s common stock, to Belmont under this provision of the agreement.

EuroGas also agreed to arrange the necessary financing to place the talc deposit into commercial production by April 17, 2002 and agreed that if the talc deposit was not in commercial production by then, EuroGas agreed to pay Belmont additional advanced royalties of $10,000 per month for each month of delay in achieving commercial production. As of September 30, 2003 EuroGas has accrued $175,000 in advance royalty due to Belmont because the talc deposit is not in commercial production.

In January 2005 the Company’s subsidiary Rozmin s.r.o. was notified that theconcession regarding the Talc deposit had been cancelled by the Slovakian Government for unspecified and dubious reasons. At this point therefore no further concession is held by Rozmin. This does not nullify the obligation to Belmont Resources as to the balance of the purchase price. The Company and Belmont, however, entered into an agreement for Belmont not to pursue legal proceedings against the Company as long as the situation in respect to Rozmin has not been cleared. The Company will be forced to impair the cost of the assets, $3,843,560, because of the cancellation of the concession.

Litigation – The principal portion of the Company’s active litigation involves matters relating to the Company’s acquisition of GlobeGas (which indirectly controlled the Pol-Tex Concession in Poland) and is described in Note 3.

Netherlands Tax Liability – EuroGas’ subsidiary, GlobeGas BV, lost its appeal for a reduction of a 1992 income tax liability in the Netherlands with a carrying amount of $929,680 at September 30, 2003. The tax arose from the sale of equipment at a profit by the former owner of GlobeGas to its Polish subsidiary. The liability is reflected in EuroGas’ financial statements; however, GlobeGas does not have the ability to pay the assessed obligation and as a result may face forced liquidation and dissolution by the Netherlands tax authority.

Employment commitments and contingencies – During April 1999, EuroGas entered into a three-year employment contract with a former chief executive officer. The contract provided for an annual salary of $400,000 plus living and other allowances of $28,200. In addition, options to purchase 1,000,000 common shares at $0.95 per share were granted in connection with the employment contract. The officer resigned in January 2001. The options vested on January 1, 2000, and were considered to have expired during 2002 due to the termination of the officer’s employment. EuroGas has accrued salary obligations to the officer in the amount of $230,000, plus certain expenses, which are included in accrued liabilities. EuroGas believes there may be offsets to this amount but has not reduced the accrued amount.

Former officers have made claims for compensation and for reimbursement of expenses against EuroGas, which amounts have been included as accrued liabilities.

On February 5, 2002 EuroGas entered into an employment agreement with its new President. The three-year agreement provides for annual compensation of $400,000 to be paid in monthly installments. The agreement provides for all terms of the agreement to continue for the unexpired term of the agreement

EUROGAS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

should the Company be involved in a winding-up or merger transaction. The agreement may be terminated if either party fails to meet its obligations under the terms of the agreement. In June 2002, the Company

agreed to compensate its Chief Executive Officer and principal shareholder $25,000 per month. The contract has expired and Mr. Slater is no longer with EuroGas, Inc. The former president has signed release of claims against the company with a cash payment of approximately $35,000 USD.

Lease commitments – The Company leased office facilities from various lessors in Poland, Vienna, and Vancouver. Except for Vancouver, the office leases are on month-to-month agreements. EuroGas entered into a lease agreement for its Vancouver office space that required monthly payments of $6,851 through January 2003. Thereafter, the lease is on a month-to-month basis. The leases have all been terminated due to lack of sufficient funds and the bankruptcy proceedings.

Certain liabilities have been eliminated due to certain laws in the state of Utah and bankruptcy issues. Certain loans have been reduced through negotiations with the loan holders.

Utah	000-24781	87-0427676
(State or other	(Commission File	(IRS Employer
jurisdiction	No.)	Identification No.)
of incorporation or
organization)

Securities registered pursuant to Section 12(b) of the Act:	None
Name of each exchange on which registered:	None

Securities registered pursuant to Section 12(g) of the Act:	Common Stock, $0.001 par value
	(Title of Class)

		PAGE
	PART I
Item 1.	Business	1

Item 2.	Property	12
Item 3.	Legal Proceedings	13
Item 4.	Submission of Matters to a Vote of Security Holders	16

	PART II
Item 5	Market for Registrant's Common Stock and Related Stockholder Matters	17
Item 6.	Selected Financial Data	18
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operation	18
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 8.	Financial Statements and Supplementary Data
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	22

	PART III
Item 10.	Directors and Executive Officers of the Registrant	23
Item 11.	Executive Compensation	24
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	28
Item 13.	Certain Relationships and Related Transactions	30
Item 14.	Controls and Procedures	30

	PART IV
Item 15.	Exhibits, Financial Statement Schedules and Reports on Form 8-K	31
	Documents Filed
	1. Financial Statements
	2. Financial Statement Schedule
	3. Exhibit List
	Reports on Form 8-K
	Exhibits
	Financial Statement Schedules
SIGNATURES		38

		High Bid		Low Bid

Year Ended December 31, 2006
Quarter ended March 31, 2006	$	0.03	$	0.01
Quarter ended June 30, 2006		0.02		0.01
Quarter ended September 30, 2006		0.02		0.01
Quarter ended December 31, 2006		0.02		0.01


Year Ended December 31, 2007
Quarter Ended March 31, 2007		0.03		0.01
Quarter Ended June 30, 2007		0.04		0.02
Quarter Ended September 30, 2007		0.13		0.06
Quarter Ended December 31, 2007		0.28		0.15

		2007			2006			2005
Oil and Gas Sales	$	-		$	-		$	-

Oil and gas production		-			-			-
Impairment of mineral interests and		-			-
equipment		-			-			-
Depreciation, depletion and
amortization		250			3,123			5,876

		-			-			-
Settlement costs		-			-			-

General and administrative		621,786			630,568			786,572


Total Costs and Operating Expenses	$	621,786		$	633,701		$	792,448


Other Income (Expenses)		-
Interest Income		-			-			84

Other Income		-			-			-
Interest expense		-						(18,746	)
Net Gain (loss) on sale and
impairment of securities and		-			-			-
equipment
Foreign exchange net gains (losses)								(64,863	)


Minority interest in income of		-			-			-
subsidiary

Total Other Income (Expense		-			-			(83,582	)

Net Loss

Net Loss	$	621,786		$	(11,388	)	$	(875,973	)
Basic and Diluted Loss Per Common
Share	$	(0.002	)	$	(0.001	)	$	(0.021	)
Weighted Average Number of
Common Shares Used in Per Share
Calculation
		196,212,635			191,212,635			191,207.607

Name	Age	Positions with the	Term of Office
		Company

Wolfgang Rauball	62	Director, Chief Executive	November 2000 - Present
		Officer
Andreas Danicek	29	Director	December 2003 - present
Hank Blankenstein	66	Director, Chief Financial	May 2002 - Present
		officer
Michael Slater	58	President	February 2002 - February
			2005

	(1)	Mr. Rauball was appointed as President and CEO and interim CFO on July 6, 2001. He also serves as Managing Director of EuroGas Austria GmbH.

	(2)	Mr. Slater became an officer of the Company in February 2002 , his contract expired in 2005 and he is no longer associated with the Company.

	(3)	Mr. Blankenstein became an officer and Director of the Company in May 2002.

	(4)	Mr. Danicek became a director in December of 2003, he resigned his position during 2008

	(5)	Since the Company has had no cash to pay salaries during the past 5years it may offer stock in the company in place of normal salaries if those salaries due certain officers and directors is not paid in the near future.

	(ii)	the performance of EuroGas as measured by such factors as development activities and increased shareholder value;

	(iii)	salaries provided by other companies inside and outside the industry that are of comparable size and at a similar stage of development, to the extent known; and

	(iv)	our capital position and needs. The Board does not assign any specific weight to these factors in determining salaries.

	(1)	Unless otherwise indicated, to our best knowledge, all stock is owned beneficially by the listed shareholder, and each shareholder has sole voting and investment power with respect to our common stock beneficially owned by such person.

	(2)	Represents options or warrants exercisable within 60 days as of December 31, 2007, held by the individual or entity.

	(3)	The percentage indicated represents the number of shares of our common stock, warrants and options exercisable within 60 days held by the indicated stockholder divided by the sum of (a) the number of shares subject to options exercisable by this shareholder within 60 days and (b) which is the number of shares of our common stock issued and outstanding as of December 31, 2007.

	(4)	Includes shares in which Mr. Rauball disclaims beneficial ownership and which he temporarily holds as a nominee for other persons.

	A.	Consolidated Balance Sheets at December 31, 2007 and 2006

	B.	Consolidated Statements of Income for the years ended December 31, 2007, 2006 and 2005

	C.	Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2007, 2006 and 2005

	D.	Consolidated Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005.

	F.	Notes to Consolidated Financial Statements

Exhibit
Number	Title of Document	Location

2.1	Exchange Agreement between Northampton, Inc., and Energy Global, A.G.	Report on Form 8-K dated August 3, 1994, Exhibit No. 1*

2.2	Agreement and Plan of Merger between EuroGas, Inc., and Danube International Petroleum Company, Inc., dated July 3, 1996, as amended	Report on Form 8-K dated July 12, 1996, Exhibit No. 5*

2.3	English translation of Transfer Agreement between EuroGas and OMV, Inc. for the Acquisition of OMV (Yakut) Exploration GmbH dated June 11, 1997	Report on Form 8-K dated June 11, 1997 Exhibit No. 1*

2.4	Asset Exchange Agreement between EuroGas, Inc., and Beaver River Resources, Ltd., dated April 1, 1988	Report on Form S-1 dated July, 23, 1998 Exhibit No. 2.03*

	EUROGAS, INC.
	(Registrant)


	By	/s/ Wolfgang Rauball
		Wolfgang Rauball
		Chief Executive Officer


	By	/s Hank Blankenstein
		Hank Blankenstein
		Principal Accounting and Financial Officer

Signature and Title	Date



/s/ Wolfgang Rauball	December 26, 2008
Wolfgang Rauball, Director




/s/ HankBlankenstein	December 26, 2008
Hank Blankenstein, Director

		Dec 31,			Dec 31,
		2007			2006
ASSETS
Current Assets
Cash	$	(11,876	)	$	(4,9929	)

Investment in securities available for sale		801			801
Other receivables
Other current assets		-
Total Current Assets		(11,075	)		(4,122	)
Property and Equipment - full cost method
Talc mineral properties and mining equipment		-			-
Oil and gas properties not subject to amortization		-			-
Furniture and office equipment		4,456			500
Total Property and Equipment					500
Less: Accumulated depletion, depreciation and amortization		(189	)		(25	)
Net Property and Equipment		4,267			475
Investment in Securities Held as Collateral under		2,872,930			2,872,930
Settlement Obligation		-			-
Receivable from a Related Party		224,557			224,557

Total Assets	$	3,101,754		$	3,095,890


LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities
Accrued liabilities	$	3,850,000		$	16,235,801

Accrued settlement obligations	$	7,285,766		$	13,285,766
Accrued income taxes		512,845			931,711
Notes payable to related parties		856,398			806,398
Total Current Liabilities		12,565,429			28,441,767


Asset Retirement Obligation		518,907			518,907
Stockholders' Deficiency
Preferred stock, $0.001 par value; 3,661,968 shares

2,392,228 shares outstanding; liquidation preference of preferred shares		350,479			350,479

Common stock, $0.001 par value; 325,000,000 shares authorized

191,212,635 shares issued, respectively		191,213			191,213

Additional paid-in capital		144,012,186			144,012,186
Accumulated deficit		(192,465,764	)		(189,365,764	)
Accumulated other comprehensive income (loss)		(1,064,962	)		(1,064,962	)
Receivable from shareholder

Treasury stock, at cost; 5,028 shares		1,362		1,362
Total Stockholders' Deficiency		(43,476,853	)	(23,783,984	)

Total Liabilities and Stockholders' Deficiency	$	29,890,830		28,441,767

Effect of Exchange Rate Changes on Cash		-			(19,463	)

Net Increase (Decrease) in Cash		(7,959	)		1,576

Cash at Beginning of Period		(4,923	)		98

Cash at End of Period	$	(11,876	)	$	8

		Dec. 31, 2007			Dec. 31, 2006
Oil and Gas Sales		-			-

Costs and Operating Expenses
Depreciation		250			25
Impairment of mineral interests and equipment		-
Litigation settlement expense		-
General and administrative		721,786			730,568


Total Costs and Operating Expenses		722,036			733,701

Other Income (Expenses)
Interest expense		0			(18,746	)
Foreign exchange net gain (loss)		0			(64,863	)
Equipment rental income		-
Interest income		0			84
Loss on sale of securities available for sale		-			-
Other, primarily gain on sale of assets		-
Net Other Income (Expense)		0			(83,525	)

Loss Before Accounting Change		(722,036	)		(875,973	)


Cumulative Effect of Accounting Change		(27,673	)		(41,894	)

Net Loss		(749,709	)		(917,867	)

Preferred Dividends		(135,198	)		(135,198	)


Loss Applicable to Common Shares		(884,907	)	$	(1,053,065	)

Basic and Diluted Loss Per Common Share
Loss before accounting change		(0	)		(0	)
Net loss	$	(0.001	)	$	(0.025	)

Basic and Diluted Weighted-Average Common
Shares Outstanding		196,212,635			189,207,607

		Dec. 31, 2007			Dec. 31, 2006

Cash Flows From Operating Activities
Net loss	$	(884,907	)	$	(5,058,088	)
Adjustments to reconcile net loss to cash used by operating activities:
Depreciation		250			6,678
Gain on sale of property and equipment		-

Foreign exchange net (gain) loss		-			(115,734	)
Loss on sale of notes receivable		-			-

Cumulative effect of accounting change		-			392,980
Accretion of accrued settlement obligation		-			-
Compensation on write-down of receivable from related party		-			-
Impairment of mineral interests and equipment		-			-
Gain on sale of securities available for sale		-			-
Warrants issued for settlement cost		-			-
Accrued settlement obligation		-			-
Changes in operating assets and liabilities:
Other receivables

Accrued liabilities		1,876,987			1,467,892
Accrued liabilities payable to related parties		958,765			758,765
Accrued income taxes		-			-
Other		-			-
Net Cash Used in Operating Activities		(885,157	)		(1,192,874	)

Cash Flows From Investing Activities
Purchases of mineral interests, property and equipment		-			-
Proceeds from sale of assets		-			-
Proceeds from sale of investment in fixed-maturity securities		-			-
Proceeds from sale of securities available for sale		-			-
Proceeds from sale of notes receivable		-			-

Purchase of securities available for sale		-			-

Net Cash Provided by (Used in) Investing Activities		-
					-

Cash Flows From Financing Activities
Proceeds from issuance of common stock		-			675,000
Receivable from related party		289,657			289,657
Payment on notes payable to related party		-
Proceeds from sale of treasury stock		-			-
Acquisition of treasury stock		-			-


Net Cash Provided by (Used in) Financing Activities		(885,157	)		964,657

		December 31, 2007		December 31, 2006
Cost	$	412,968	$	412,892
Gross unrealized gains		2,460,763		1,077,166

Estimated Fair Value	$	2,873,731	$	1,490,058
Presented in the accompanying balance sheets as follows:

Investment in securities available for sale	$	801	$	1,490,058
Investment in securities held as collateral under settlement
obligation		2,872,930		-
Estimated Fair Value	$	2,873,731	$	1,490,058

		December 31, 2007		December 31, 2006
Loans from a key employee, due in 2002, with
interest at 10%, unsecured	$	218,285	$	218,285
Loans from an officer and from companies
associated with a director, due in 2002 and
2003, with interest at 7.5% to 10%, unsecured.		38,113		35,080
A Loan from a shareholder was made in 2006 and 2007		700,000		300,000
Interest at 7.5% to 10%, unsecured		62,354		42,769
Total Notes Payable to Related Parties		1,018,752		596,134

	December 31, 2007		December 31, 2006

Foreign currency translation adjustments	-	$	(115,734	)
Unrealized gain on investments in
securities available for sale	-		-
Accumulated Other Comprehensive Income (Loss)		$	(115,734	)

		Dec. 31, 2007		Dec. 31, 2006
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	-	$	-

Supplemental Schedule of Noncash Investing and Financing
Activities
Accrual of preferred dividends	$	101,121	$	101,121
Asset retirement obligation incurred in property acquisition		-		140,187
Conversion of fixed-maturity securities to note receivable		-		-
Issuance of 10,000,000 common shares for:
Receivable from shareholder		-		-
Conversion of note payable		-		-
Conversion of accrued liability for salaries to officers		-		-