Blast Energy Services Considers Drilling Company Acquisition
08 June 2006 - 9:20AM
PR Newswire (US)
HOUSTON, June 7 /PRNewswire-FirstCall/ -- Blast Energy Services
(OTC:BESV) (BULLETIN BOARD: BESV) has signed a letter of intent to
further evaluate the potential of a purchase transaction to acquire
several U.S. rotary land drilling rigs. The acquisition is
primarily subject to the execution of a definitive agreement
between the parties, acceptable financing terms and board
approvals. "This acquisition appears to provide a significant and
highly complementary base of operations for our energy services
business," said John O'Keefe, EVP and Co-CEO. "We believe that it
clearly fits with our current business plan and may provide
substantial added value to our shareholders." A successful
acquisition would provide a major boost to Blast's energy services
business and involves the purchase of several rotary land drilling
rigs for approximately $50 million, including two-year contracts
with oil and gas well operators and experienced drilling rig crews.
At current contracted day-rates, each rig can generate more than $7
million per year in revenue. The transaction is expected to be
funded by a combination of debt and equity components. Based upon
initial economic evaluations, management believes that this
multiple rig acquisition would be accretive to Blast shareholders.
Blast Rig #1 Update Within two weeks, Blast Rig #1 is expected to
be deployed on a private well location to fully evaluate the
effectiveness of the repairs made to the rig's coil tubing delivery
system. After this shakedown process, the rig is expected to return
to the Many, Louisiana well location in order to complete the job
for Oracle Operating LLC and demonstrate its lateral jetting
capabilities. After this point, the rig will be ready to commence
its commercial deployment with new customers. "Interest in our
abrasive cutting services remains high. With the rig on schedule to
begin commercial operations in July, we are pursuing contacts with
interested oil & gas operators," said David Adams, President
& Co-CEO. While on its initial test well location in April
2006, the Blast Rig #1 successfully demonstrated the ability to cut
through the steel well casing using abrasive fluid jetting from
within the well-bore. The Company was also successful in shaking
down the major technology systems of the rig, including the
abrasive cutting system. However, we encountered several basic coil
tubing components that needed immediate repair and returned to the
yard before attempting to test the rig's lateral drilling
capabilities. The Company has estimated rig repairs to cost
approximately $75,000. About Blast Energy Services, Inc. Blast
Energy Services, Inc. is a publicly traded company based in
Houston. Our mission is to substantially improve the economics of
existing oil and gas operations through the application of our
worldwide licensed and proprietary technologies. Using specially
fabricated mobile drilling rigs we intend to operate a commercially
viable energy service business, including: specialty casing
cutting, perforation, fracturing services and lateral drilling with
the potential to penetrate through well casing and into reservoir
formations to stimulate oil and gas production. This service should
provide oil and gas producers with an attractive, lower cost
alternative to existing well stimulation or horizontal drilling
services. Additionally, we are providing satellite services to oil
and gas producers. This service allows them to monitor and control
well head, pipeline or drilling operations through low- cost
broadband data and voice services from remote operations where
conventional land based communication networks do not exist or are
too costly to install. Please visit our website:
http://www.blastenergyservices.com/ . Safe Harbor Statement Any
statements made in this news release other than those of historical
fact, about an action, event or development, are forward looking
statements. Forward looking statements involve known and unknown
risks and uncertainties, which may cause the Company's actual
results in future periods to be materially different from any
future performance that may be suggested in this release. Such
factors may include risk factors including but not limited to: the
ability to raise necessary capital to fund acquisitions, rig
repairs or growth; adequate liquidity to manage operations and debt
obligations; the introduction of new services; commercial
acceptance and viability of such services; fluctuations in customer
demand and commitments, pricing and competition; reliance upon
lenders, contractors and vendors; the ability of Blast Energy
Services' customers to pay for our services, together with such
other risk factors as may be included in the Company's filings on
Form SB-2 and its periodic filings on Form 10-KSB, 10-QSB, and
other current reports. DATASOURCE: Blast Energy Services, Inc.
CONTACT: John MacDonald of Blast Energy Services, Inc.,
+1-281-453-2888, or +1-713-725-9244, or Web site:
http://www.blastenergyservices.com/
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