Blast Energy Services Confirms Rig's Large Bore Perforation Capabilities
25 July 2006 - 10:30PM
PR Newswire (US)
HOUSTON, July 25 /PRNewswire-FirstCall/ -- Blast Energy Services
(OTC:BESV) (BULLETIN BOARD: BESV) has returned to the location of
its first field test using its new abrasive fluid jetting (AFJ)
technology on a well for Oracle Operating located in Many,
Louisiana. With repairs to the coil tubing unit completed, the
Blast Rig #1 has resumed operations that include demonstrating the
ability to cut through the steel well casing at approximately 3,000
feet of vertical depth and attempting to jet large bore
perforations though the window cut in the casing. While on this
location, the Blast Rig #1 has again successfully demonstrated the
ability to cut a large (3 x 3 inch) window into the steel well
casing using AFJ from within the well-bore -- a unique attribute in
the energy business. Additionally, the Company now believes that
this cutting process perforated approximately three feet into the
rock formation beyond the casing wall. This large bore perforation
service adds to the rig's existing well service capabilities, which
include specialty casing cutting and normal coiled tubing well
services. "This is an important milestone in the development of our
new technology. Our unique AFJ process should provide oil and gas
well operators with a new well perforation and stimulation
opportunity," said David M. Adams, President & Co-CEO of Blast
Energy Services. "We will continue to commercialize these service
offerings for our customers while we are developing the lateral
jetting service." While attempting to jet laterally into the
formation there were indications that the formation-cutting nozzles
were eroding and that higher strength material would be needed.
Replacement nozzles composed of higher strength carbide have been
ordered. In the meantime, Blast will take the opportunity to
replace some of the down-hole equipment that may have been damaged
during a jetting attempt. It is expected to take about a week to
secure a work-over rig to return to the location and switch out the
down hole equipment. Once this is completed and the replacement
nozzles are delivered, further lateral jetting operations are
planned. Previously, while on this well location in April, the
Blast Rig #1 encountered several components on the basic coil
tubing unit that needed repair and the rig returned to the yard
before lateral jetting could be attempted or evaluations of the
large-bore perforation could be made. Since that time, the rig was
professionally repaired and tested positively at a non- producing
well location to confirm that the coil tubing unit was operating
properly. During this latest deployment, the rig's coil tubing
components and the proprietary AFJ systems have operated normally
and the rig crew has continued to gain valuable operating
experience with the rig's many complex systems. Interest in Rig
Services In the meantime, several well operators are expressing an
interest in the specialty services of this AFJ rig, including the
Department of Energy (DOE) for its Rocky Mountain Oilfield Testing
Center in Wyoming. Discussions are underway with the DOE for the
rig to conduct a series of specialty cutting services including
casing windows, vertical and 360 degree slots, and large bore
perforations. For more information about the 10,000 acre, 1,200
well testing center, you can visit their website at:
http://www.rmotc.doe.gov/ . "Working for the DOE would not only
generate AFJ revenues, but it would be a excellent opportunity to
further evaluate our cutting and well stimulation capabilities in
an scientific environment designed to test and promote new oilfield
technologies," added Mr. Adams. Land Rig Acquisition Update Blast
continues to evaluate the potential transaction to acquire up to
six U.S. rotary land drilling rigs under a non-binding agreement. A
successful acquisition would provide a major boost to Blast's
energy services business and involves the cash purchase of the
rotary land drilling rigs for approximately $52 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 $6.5 million per year in revenue. If the
contemplated transaction is consummated it is expected to be funded
by a combination of debt and equity components. Negotiation with
potential investors and lenders is underway. Based upon initial
economic evaluations, management believes that this multiple rig
acquisition would be accretive to Blast shareholders. "We believe
this acquisition could provide a significant base of operations for
our energy services business," said John O'Keefe, EVP and Co- CEO
of Blast Energy Services. "It clearly fits with our business plan
and with the current record high daily drilling rig rates, it may
provide substantial added value to our shareholders." The
transaction contemplated is subject to the parties entering into
definitive documentation, financing, acceptable financial
statements from the entity to be acquired, an appraisal acceptable
to lenders, and board and potentially shareholder approvals. 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 growth, adequate
liquidity to manage operations and debt obligations, the
introduction of new services, commercial acceptance and viability
of new 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, the entering into final documentation, if any, on
potential financing or acquisitions, 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/
http://www.rmotc.doe.gov/
Copyright