HOUSTON, Aug. 10 /PRNewswire-FirstCall/ -- Blast Energy Services, Inc. (OTC:BESV) (BULLETIN BOARD: BESV) has agreed to purchase from Alberta Energy Holdings (Alberta) up to a fifty percent (50%) interest in the intellectual property behind their abrasive fluid jetting technology. The parties are also amending their exclusive worldwide licensing agreement to encompass any additional processes, products or services that may be developed once Blast Rig #1 is commercially deployed and modifying their construction agreement, which had been delayed until recently when funding for the rig was secured. "This acquisition of the abrasive fluid technology early in the process puts us in control of our own destiny," said David Adams, President and co- CEO. "Alberta and Blast shareholders are now totally aligned to benefit from the future value that may be created as we expand the scope and application of this technology." Under the Term Sheet, Alberta will initially receive three million restricted shares of Blast common stock with registration rights and a disproportionate interest in future sublicensing revenues until they have earned $2 million from those revenues. From that point forward, the companies will share equally in future sublicensing revenue. Blast will initially hold a twenty percent (20%) interest in the intellectual property and, as total sublicensing revenues reach $2 million, Blast's ownership interest will also increase to a maximum of fifty percent under a sliding scale. Additionally, under the terms of the existing licensing agreement, the 750,000 three-year warrants Alberta will earn when Blast Rig #1 is commercialized will have a revised exercise price of $0.45 per share. Blast has invested more than 50% toward the cost of construction of the initial drilling rig, using existing coiled tubing technology as the base platform. The capabilities of this next generation abrasive rig, when fully implemented, 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. As previously reported, Blast entered into an agreement to fund their initial abrasive jetting rig with Berg McAfee Companies, 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 $600 thousand in funding under this agreement and is scheduled to receive the balance in several payments before the end of September 2005. Berg McAfee also has the option to build up to a total of four rigs. With positive acceptance from its customers, Blast expects to commission the building of additional rigs prior to the end of this year. Some of the amendments to the licensing agreement include a much broader definition of the abrasive technology, provisions for entering into new business ventures for abrasive jetting applications, and revised royalty and consulting terms. The construction agreement was also modified to recognize additional cost items for Blast Rig #1 and to provide Alberta with an option to build future rigs at invoice cost plus $50,000 per rig. Alberta has now agreed to deliver Blast Rig #1 on or before October 1, 2005 on a best efforts basis. 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 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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