Blast Energy Services Enters Into Settlement Agreement With Hallwood Energy For $6 Million
April 07 2008 - 8:00AM
PR Newswire (US)
HOUSTON, April 7, 2008 /PRNewswire-FirstCall/ -- Blast Energy
Services (OTC:BESV) (BULLETIN BOARD: BESV) announced today that its
wholly-owned subsidiary Eagle Domestic Drilling Operations
("Eagle") and Hallwood Energy, LP and Hallwood Petroleum, LLC
("Hallwood") have signed an agreement to settle the litigation
between them for a total settlement amount to Eagle of
approximately $6.4 million. "This is one of two lawsuits we filed
against land rig drilling customers for breach of contract. We
believe this settlement with Hallwood will inject additional cash
into the Company, reduce our debt obligations and allow us to focus
our efforts on the remaining higher valued claim against
Quicksilver Resources," said John O'Keefe, Blast's CEO. Under the
terms of this agreement, Hallwood will pay to Eagle $2.0 million in
cash and issue $2.75 million in equity from a pending major
financing and Hallwood has agreed to irrevocably forgive
approximately $1.65 million in Eagle payment obligations effective
immediately. In return, Eagle has agreed to suspend its legal
actions against Hallwood for approximately six months.
Additionally, in the event Hallwood is able to secure an aggregate
of $20 million in bridge financing prior to June 30, 2008, Hallwood
will pay Eagle a $500,000 advance on their cash obligation. Should
Hallwood be unable to complete their major financing by September
30, 2008, Eagle will immediately resume their legal actions against
Hallwood and the $500,000 advance will not be credited against any
future judgment or settlement amounts. Should Hallwood successfully
complete their major financing and satisfy their settlement
obligations to Eagle, the parties and their affiliates will be
fully and mutually released from all and any claims between them.
This settlement agreement has been approved by both companies'
board of directors but is subject to the approval of the Bankruptcy
Court. 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. Blast Energy Services, Inc. takes no obligation to
update or correct forward-looking statements, and also takes no
obligation to update or correct information prepared by third
parties that are not paid for by Blast. DATASOURCE: Blast Energy
Services, Inc. CONTACT: John MacDonald of Blast Energy Services,
Inc., +1-281-453-2888 or +1-713-725-9244, Web site:
http://www.blastenergyservices.com/
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