Blast Energy Services Funds Initial Abrasive Jetting Rig HOUSTON, July 21 /PRNewswire-FirstCall/ -- Blast Energy Services, Inc. (OTC:BESV) (BULLETIN BOARD: BESV) has entered into an agreement to develop their initial abrasive jetting rig with Berg McAfee Companies, LLC, a major shareholder. The arrangement involves a loan of $1 million to fund the completion of the initial rig and sharing in the expected rig revenues for a ten-year period. To date, the Company has received $500,000 in funding under this agreement and is scheduled to receive the balance in several payments before the end of September 2005. Previously announced negotiations to develop up to five abrasive jetting rigs in a profit sharing agreement with Advanced Drilling Systems did not materialize. "These cash sources will allow us to complete construction of our initial rig and get it into commercial operation by the end of September," said John O'Keefe, Executive VP and Co-CEO of Blast. "We find the arrangement especially attractive because it avoids equity financing that would result in substantial dilution to our shareholders at these very low stock price levels." In a related fund-raising event, Blast and Maxim TEP have entered into an amended contract, which resulted in a $175,000 increase in the value to the Company of the previously announced technology assignment agreement. The new payment terms include the $550,000 paid to date, an additional $25,000 payable today, $400,000 payable by July 25, 2005 and a final payment of $500,000 by September 2, 2005. A portion of the scheduled payment owed since June had been overdue. Under the terms of the loan agreement with Berg McAfee, cash revenues will be shared on the basis of allocating 90 percent to the Company and 10 percent to Berg McAfee for a ten-year period following repayment. After ten years, the Company will receive all of the revenue from the rig. The loan, which has a senior and subordinated structure, carries an average interest rate of 7.4 percent and is due September 15, 2006. Berg McAfee also has the option to fund an additional three rigs under these commercial terms. Based upon a normal weekday, daylight operations schedule and current rates for specialized well perforation and completion services, the rig is estimated to have the capacity to generate more than $6 million in annual revenues. The Company has invested approximately 50% toward the cost of construction of the initial drilling rig, using existing coiled tubing technology as the platform. The capabilities of this next generation rig should allow Blast to expand their market opportunities to a wider range of well services, including specialty casing cutting, long reach perforating, lateral jetting, and specialty completions. Under the current schedule, Blast expects the rig to be completed and commercially deployed in September. After the initial rig establishes market acceptance, the Company intends to begin construction of additional rigs with similar abrasive cutting capabilities as the market demands. In June, the specialized abrasive jetting module passed the Company's design performance testing in Germany. The factory acceptance test exceeded our design criteria. Management believes that this has very positive implications with respect to performance of the system when it is deployed in the field. Photos of this test and the rig assembly process have been posted to the Company's website. 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, the introduction of new services, commercial acceptance and viability of new services, fluctuations in customer demand and commitments, pricing and competition, reliance upon subcontractors, 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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