Blugrass Signs LOI for Major Acquisition in the Permian Basin
Blugrass Signs LOI for Major Acquisition in the Permian Basin in Crockett County, Texas
CALGARY, AB -- (Marketwire) -- 10/26/10 -- Blugrass Energy, Inc. (OTCBB: BLUGE) is pleased to announce that it has signed a letter of intent to acquire an oil and gas lease covering 4,807 acres located in the Permian Basin in Crockett County, Texas. The lease is currently owned by Dallas, Texas-based Petro Grande, LLC, which owns an 87.5% working interest. Acquisition of the lease includes full access to 3D seismic imaging of the lands under lease, from which geophysicists have identified a number of drilling locations in the Canyon Sands, Strawn and Ellenburger formations. The land position is on trend with numerous giant, multi-pay gas fields currently under production by major oil and gas companies, and is close to pipeline gathering and treating infrastructure. An independent geoscientist has estimated that there may be a resource of up to 168 BCF (billion cubic feet) of natural gas in this lease in the probable resource category.
In addition to the lease, Blugrass Energy would acquire an option to participate as a working interest owner in Petro Grande's other 9,850 acre leases, all of which include 3D seismic imaging.
The letter of intent contemplates that upon closing, Blugrass Energy would issue to Petro Grande, LLC a promissory note in the amount of $3.5 million, secured by the lease, plus shares of common stock comprising 75.0% of the outstanding shares.
The company anticipates that its head office will be moved to Dallas, Texas, and that the company's name will be changed to Rio Grande Petroleum, Inc. Senior management will be appointed by Petro Grande, LLC. The transaction is subject to due diligence and necessary approvals, including approval of an amendment to the Blugrass Energy Articles of Incorporation to increase the number of authorized shares.
Blugrass Energy is looking forward to completing this transaction and moving forward with a drilling and development program.
Finally, the company advises that it anticipates that its outstanding Form 10-K Annual Report filing for the year ended June 30, 2010 will completed shortly and the "E" removed from the company's trading symbol shortly thereafter.
This news relea se contains "forward-looking statements," as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements in this news release that are not historical facts are forward-looking statements that are subject to risks and uncertainties. Words such as "expects," "intends," "plans," "may," "could," "should," "anticipates," "likely," "believes" and words of similar import also identify forward-looking statements. Forward-looking statements are based on current facts and analyses and other information that are based on forecasts of future results, estimates of amounts not yet determined and assumptions of management, including, but not limited to: the completion of the transaction with Petro Grande, the existence of any economically recoverable reserves in the subject lease, any future exploration of the lease, or the drilling of additional wells in the lease lands.
Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with oil and gas exploration; changes in reserve estimates if any; the potential productivity of our properties; changes in the operating costs and changes in economic conditions and conditions in oil and gas exploration. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that the beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance those beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our current and periodic reports filed from time-to-time with the Securities and Exchange Commission.
Contact: Tony R. Collins Investor Relations Blugrass Energy Inc. Office: 877.511.0110 Email: email@example.com Web: www.blugrassenergy.com