HOUSTON, Feb. 27 /PRNewswire-FirstCall/ -- Blast Energy Services (OTC:BESV) (BULLETIN BOARD: BESV) today reported that the Bankruptcy Court has entered an order confirming its Second Amended Plan of Reorganization (the "Plan"). This ruling allows the Company to emerge from Chapter 11 bankruptcy in the next few days. The overall impact of the confirmed Plan is for Blast to emerge with unsecured creditors fully paid, have no debt service scheduled for at least two years, and keep equity shareholders' interests intact. The major components of the Plan, which was overwhelmingly approved by creditors and shareholders, are detailed in the following paragraphs. Under the terms of this confirmed Plan, the Company has raised $4.0 million in cash proceeds from selling convertible preferred securities to Clyde Berg and McAfee Capital, two parties related to the Company's largest shareholder, Berg McAfee Companies. Upon receipt by the escrow agent of the written confirmation order, these funds will be released to the Company and will be used to pay 100% of the unsecured creditor claims, all administrative claims, and all statutory priority claims for a total amount of approximately $2.4 million. The remaining $1.6 million will be used to execute an operational plan, including but not limited to, reinvesting in the Satellite Services and Down-hole Solutions businesses and pursuing an emerging Digital Oilfield business. This Plan also preserves the equity interests of our existing shareholders. Further, the Company will continue to prosecute the litigation against Quicksilver Resources and Hallwood Petroleum/Hallwood Energy. Blast has previously estimated these legal recoveries to be in the range of $15 million to $45 million (gross). Trial dates have been set for April 14, 2008 and September 15, 2008 for Hallwood and Quicksilver respectively. Under the terms of the Plan, the Company will carry the following three secured notes - none of which are due and payable for at least two years. -- A $2.1 million interest-free senior note with Laurus Master Fund is secured by the assets of the company and payable from a 65% portion of the proceeds that may be received for the customer litigation lawsuits or asset sales; -- A $125,000 note to McClain County, Oklahoma for property taxes will also be paid from the receipt of litigation proceeds, or otherwise, it converts to a six-percent interest bearing note in February 2010; -- A pre-existing secured $1.1 million eight-percent note with Berg McAfee Companies has been extended for an additional three years and contains an option to be convertible into company stock at $0.20 per share. No other claims exist on the future operating cash flows of the Company. The convertible preferred security issued under the terms of the Plan carries a cumulative dividend rate of eight percent and is convertible into common stock at $0.50 per share. The offering includes 25% warrant coverage with an exercise price of $0.10 over a three-year term and is subject to certain mandatory conversion provisions. Certain other liabilities, including $800,000 in financing obtained during the bankruptcy period, will be converted into common stock at $0.20 per share now that the Plan has been confirmed. As a result, the Company expects to have approximately 64 million shares issued and outstanding on a going forward basis including the preferred shares issued under the Plan. The equivalent fully diluted number of shares is expected to be approximately 88 million, which includes the impact from all unexercised stock option and warrants and the conversion option of the Berg McAfee secured note. Also, as a part of its Plan, the Company will be implementing certain other corporate matters, including: -- Changing its corporate domicile from the State of California to the State of Texas; -- Increasing its authorized shares from 100 million to 200 million, including 20 million shares of preferred stock; -- Reducing membership of its Board of Directors - O. James Woodward III, Fred Ruiz, and Scott Johnson will be retiring and current Vice Chairman, H. Roger "Pat" Herbert, has agreed to serve as Chairman of the new Board. For further details on our reorganization plan, agreements contained therein, corporate governance changes and any impact that potential conversions of preferred securities or secured debt may have on our capitalization, please refer to the filing of a Form 8-K that the Company expects to submit in the next few days. 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. DATASOURCE: Blast Energy Services, Inc. CONTACT: John MacDonald of Blast Energy Services, Inc., +1-281-453-2888, +1-713-725-9244, Web site: http://www.blastenergyservices.com/

Copyright