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/

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