Blugrass Closes Major Acquisition in the Permian Basin

Blugrass Closes Major Acquisition in the Permian Basin 
DALLAS, TX -- (Marketwire) -- 02/23/11 --   Blugrass Energy Inc.
(PINKSHEETS: BLUG) has acquired a significant oil and gas lease
covering 4,807 acres located in the Permian Basin in Crockett County,
Texas. The land position is geologically on trend with several giant
natural gas fields currently under production by major oil and gas
companies, and is also close to pipeline gathering and treating
facilities. 
Acquisition of the lease, representing an 87.5% working interest,
includes full access to complete three-dimensional (3D) seismic
imaging of the lands under lease. Using this seismic imaging, a team
of geophysicists has identified a number of drilling locations in the
Canyon Sands, Strawn and Ellenburger formations. 
Acquisition of the lease also includes an option to participate as a
working interest partner in drilling programs sponsored on an
additional 9,850 acres. Located in close proximity to the Blugrass
lease, this acreage has also benefited from complete 3D seismic
imaging underwritten by Petro Grande, LLC, which holds the additional
acreage. 
The Board of Directors of Blugrass unanimously approved the
acquisition. Upon closing, Blugrass issued to Dallas, Texas-based
Petro Grande, LLC, shares of Blugrass common stock comprising
approximately 77% of the outstanding shares, plus a promissory note
in the amount of $3.5 million.  
Blugrass company headquarters have moved to Dallas, Texas, with a new
senior management team: Abram Janz as President and CEO, and Larry
Maguire as Executive Vice President and CFO. Both executives will
serve on the Board of Directors, and are seasoned finance and oil &
gas industry veterans. 
The company will soon be changing its name to Rio Grande Petroleum
Inc., to reflect the new focus of the company's energies and
resources. 
Commenting on the acquisition, CEO Mr. Janz stated, "With the closing
of this acquisition, Blugrass is poised to move forward with a scaled
drilling and development program to explore the Canyon Sands, Strawn
and Ellenburger formations. We view this drilling program to be a
resource play, since the Canyon Sands and Strawn formations in
particular, are highly productive in the area of the lease." 
Mr. Janz continued, "I can speak for the entire management team: we
have aggressive goals for building shareholder value and putting in
place top notch corporate governance practices. And we welcome a
continuing dialogue with the Blugrass shareholder base as we move
forward with these aggressive plans." 
The company will soon be launching a new website, at
www.riograndepetroleum.com. 
FORWARD-LOOKING STATEMENTS SAFE HARBOR  
This news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. Forward-looking statements
give our current expectations or forecasts of future events. They
include our plans to drill oil and gas wells on the lease lands in a
search for economically recoverable reserves. Actual results could
differ materially as a result of a variety of risks and
uncertainties. See the description of risks related to our business
in the documents that the company files with the SEC on Forms 10-K,
10-Q and 8-K. We caution you not to place undue reliance on our
forward-looking statements, which speak only as of the date of this
news release, and we undertake no obligation to update this
information. 
Further information will be available on the company's website, where
the company will routinely post announcements, updates, events,
investor information and presentations, and all recent press
releases. 
INVESTOR CONTACTS: 
Abram Janz
President & CEO
Blugrass Energy Inc. 
Tony R. Collins 
Investor Relations 
877.511.0110  
 
 
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