HOUSTON, April 7, 2008 /PRNewswire-FirstCall/ -- Blast Energy Services (OTC:BESV) (BULLETIN BOARD: BESV) announced today that its wholly-owned subsidiary Eagle Domestic Drilling Operations ("Eagle") and Hallwood Energy, LP and Hallwood Petroleum, LLC ("Hallwood") have signed an agreement to settle the litigation between them for a total settlement amount to Eagle of approximately $6.4 million. "This is one of two lawsuits we filed against land rig drilling customers for breach of contract. We believe this settlement with Hallwood will inject additional cash into the Company, reduce our debt obligations and allow us to focus our efforts on the remaining higher valued claim against Quicksilver Resources," said John O'Keefe, Blast's CEO. Under the terms of this agreement, Hallwood will pay to Eagle $2.0 million in cash and issue $2.75 million in equity from a pending major financing and Hallwood has agreed to irrevocably forgive approximately $1.65 million in Eagle payment obligations effective immediately. In return, Eagle has agreed to suspend its legal actions against Hallwood for approximately six months. Additionally, in the event Hallwood is able to secure an aggregate of $20 million in bridge financing prior to June 30, 2008, Hallwood will pay Eagle a $500,000 advance on their cash obligation. Should Hallwood be unable to complete their major financing by September 30, 2008, Eagle will immediately resume their legal actions against Hallwood and the $500,000 advance will not be credited against any future judgment or settlement amounts. Should Hallwood successfully complete their major financing and satisfy their settlement obligations to Eagle, the parties and their affiliates will be fully and mutually released from all and any claims between them. This settlement agreement has been approved by both companies' board of directors but is subject to the approval of the Bankruptcy Court. 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 likelihood that the customer lawsuits result in meaningful proceeds, 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, together with such other risk factors as may be included in the Company's filings on its periodic filings on Form 10-KSB, 10-QSB, and other current reports. Blast Energy Services, Inc. takes no obligation to update or correct forward-looking statements, and also takes no obligation to update or correct information prepared by third parties that are not paid for by Blast. DATASOURCE: Blast Energy Services, Inc. CONTACT: John MacDonald of Blast Energy Services, Inc., +1-281-453-2888 or +1-713-725-9244, Web site: http://www.blastenergyservices.com/

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