Blast Energy Services Receives $0.5 Million Advance on Settlement Agreement From Hallwood
July 08 2008 - 1:17PM
PR Newswire (US)
HOUSTON, July 8 /PRNewswire-FirstCall/ -- Blast Energy Services
(OTC:BESV) (BULLETIN BOARD: BESV) announced today that Hallwood
Energy, LP and Hallwood Petroleum, LLC ("Hallwood") has paid a
$500,000 advance on their cash obligation under the terms of the
settlement agreement signed in April 2008. As agreed, in return for
this advance payment, Blast will extend its suspension of any legal
action against Hallwood until September 30, 2008. Under the terms
of the settlement agreement, Hallwood has agreed to pay to Blast's
wholly-owned subsidiary Eagle Domestic Drilling Operations
("Eagle") $2.0 million in cash and issue $2.75 million in equity
from a pending major financing. Hallwood has also irrevocably
forgiven approximately $1.65 million in payment obligations
previously owed by Eagle. Blast has been advised that for the past
few weeks, Hallwood has been meeting with potential investors in
Europe in anticipation of their initial public offering on the
London Alternative Investment Market. 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 U.S.
Bankruptcy Court for the Southern District of Texas and Laurus
Master Fund, Ltd., one of Blast's creditors. Should Hallwood be
unable to complete their major financing and fund the full amount
of the settlement 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. In a related matter, the trial date in Blast's
case pending against Quicksilver Resources, Inc. remains scheduled
for September 15, 2008. Blast's counsel continues to prepare for
trial and gather evidence in support of its claim through
depositions and document production. The damage model for this case
involves termination damages for three separate IADC drilling
contracts, two of which include liquidated damage provisions of
approximately $10 million each. Down-hole Solutions Blast has been
informed by its partner, Reliance Oil and Gas, that they have
received funding to drill a five-well program in Central Texas.
Reliance plans to drill these wells during the month of July 2008
and then plans to deploy Blast's fluid jetting rig to laterally
drill and complete these wells during August 2008. Reliance's
personnel have prior experience specifically applying down-hole
jetting processes, which we believe will substantially improve the
commercial viability of the Blast lateral jetting process.
Satellite Services Meanwhile, the newly-designed demonstration
remote monitoring unit is expected to be delivered to Blast's
Houston office by mid-July 2008 and demonstrations to potential
customers in the energy sector are expected to begin shortly
thereafter. This unit has been built to provide monitoring and
control of multiple sensors using standard and proprietary radio
protocol controlled applications that are currently being used in
pipeline and oil field operations. Blast believes there is a
substantial opportunity in the energy industry to consolidate the
remote monitoring and control of sensor networks and to provide
immediate notification to key personnel by interfacing seamlessly
with a customer's existing communication network. We expect our new
remote server application will allow us to expand the growth
opportunities of our existing satellite services business. Safe
Harbor Statement This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 (the "Act"). In particular, when used in the
preceding discussion, the words "believes," "expects," "intends,"
"plans," "anticipates," or "may," and similar conditional
expressions are intended to identify forward-looking statements
within the meaning of the Act, and are subject to the safe harbor
created by the Act. 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-K, 10-Q, 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 CONTACT: John MacDonald of Blast Energy Services, Inc.,
+1-281-453-2888, +1-713-725-9244, Web site:
http://www.blastenergyservices.com/
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