Blast Energy Services Signs Additional Drilling Contracts
October 25 2006 - 8:39AM
PR Newswire (US)
HOUSTON, Oct. 25 /PRNewswire-FirstCall/ -- Blast Energy Services
(OTC:BESV) (BULLETIN BOARD: BESV) , through its wholly owned
subsidiary Eagle Domestic Drilling Operations ("Eagle"), has signed
day-work drilling contracts with three new customers. Eagle Rig #11
is presently on location in West Texas and Eagle Rig #12 is being
mobilized to drill a three-well program in North Texas, with an
option for an additional three wells. Another rig will be deployed
for a third customer on a one-well program to commence in early
November near Monroe, Louisiana. Blast expects to generate
approximately $2 million of revenue from these contracts excluding
the three well option on Rig #12. "Despite the loss of Eagle's
previous contract holders and the recent weakness in natural gas
prices, we are beginning to see some traction in demand for our
drilling rigs," said David M. Adams President & Co-CEO of Blast
Energy Services, Inc. "We are in discussions with several customers
expressing interest in drilling services and expect to have our
entire five rig fleet under contract by year end." Meanwhile, Blast
has filed suit against Quicksilver Resources for breach of
contract, among other claims, under the terms of the two-year
drilling contracts acquired with the purchase of the land drilling
business in August 2006. Quicksilver had executed contracts for the
drilling capabilities of three rigs -- one rig that had commenced
drilling operations with them in July and two additional rigs that
are becoming available in October and November. Blast has learned
that Quicksilver has filed a lawsuit asking for rescission of the
contracts. The Company intends to vigorously defend itself in this
proceeding and believes that early termination provisions under the
Quicksilver contracts entitle them to a reimbursement of lost
revenues of approximately $10 million per rig. Blast is also
involved in another breach of contract suit against Hallwood
Petroleum for two drilling rigs with similar potential upside
damages. Due to the early termination of these IADC term contracts,
the Company suspends its previously disclosed guidelines for 2007
revenues relating to Eagle's contract drilling business, which
assumed the contribution from five rigs drilling continuously
during the year at the contracted rates. In related news, Blast's
prototype abrasive jetting unit has arrived on location at the
Department of Energy's Rocky Mountain Oil Field Testing Facility in
Wyoming. The previously announced testing program for this unit's
specialized down-hole completion capabilities is expected to
commence this week. Testing plans include cutting holes, slots and
windows in an initial test well in the 400 to 1,000 foot depth
range before moving to additional wells in the 3,000 to 5,000 foot
depth range. The Rocky Mountain Oilfield Testing Facility is
provided by the Department of Energy as a field test site for
emerging and developing technologies to address critical energy
industry issues. The field test site is a 10,000 acre operating oil
field offering a full complement of associated facilities and
equipment on-site. There are approximately 1,200 well bores and
approximately 600 producing wells, in nine producing reservoirs
ranging in depth from 500 to 5,000 feet. 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.
Our new major business, effective August 2006, is conventional land
rig drilling onshore USA with its own fleet of drill rigs and
crews. 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 integrate and successfully operate the
newly acquired company, 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
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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