SOURCE: Blugrass Energy Incorporated

February 04, 2010 13:00 ET

Blugrass Enters Into a Letter of Intent With Petro Grande, LLC

CALGARY, AB--(Marketwire - February 4, 2010) -  Blugrass Energy Inc. (OTCBB: BLUG) is pleased to announce that Blugrass Energy Inc. has entered into a Letter of Intent with Petro Grande, LLC on certain oil and gas interests in Val Verde and Crockett Counties, Texas.

Petro Grande owns over 16,500 leased acres in the Permian basin in Val Verde and Crockett counties in West Texas with the latest advanced 3D seismic and over 150 targets selected for drilling. There are over 60 producing natural gas Strawn wells adjacent to this acreage. Petro Grande estimates that there is approximately 500 BCF of natural gas in its acreage position. The three main natural gas formations are Canyon Sands, approximately 6300' in depth, Strawn formation approximately 12,000' in depth, and the Ellenburger, is approximately 14,000' in depth.

Petro Grande has designated over 75 locations on lands located on the Soto Lease ( Canyon Wells ) that it believes would be economic to drill. Petro Grande would sell and Blugrass would purchase seventy five percent (75%) of petro Grande working interest in two such locations designated by Petro Grande and the 40 acre tracts associated with each location.

Blugrass would assume, bear and pay all the costs and expenses with the drilling and the completion of location wells. Blugrass after drilling at least one well on each initial location, will have the option to purchase two (2) additional Locations.

Blugrass has also entered into a letter of intent with Petro Grande to purchase twenty five percent (25) of its working interest in one Strawn and one Ellenburger well location designated by Petro Grande and ( subject to the provisions of the applicable leases) the 160 acre ( for the strawn ) and 640 acre (for the Ellenburger) tracts associated with each such location.

Blugrass will assume, bear and pay for thirty three percent (33%) of the costs and expenses associated with the drilling and completion of the Strawn Location and the Ellenburger Location wells.

Blugrass and Petro Grande are scheduled to start the drilling program in early March 2010. 

Blugrass is ready to proceed with this project with an initial investment of $4.5 million as soon as the first financing is closed.

Mr. Berscht, President of Blugrass Energy Inc., states, "We are excited with this Letter of Intent and look forward to building shareholder value."

About Blugrass:

Blugrass Energy Inc. is a development stage oil and gas development and exploration company based in the United States that is traded on the Over the Counter Bulletin Board under the Symbol BLUG. The goal of BLUG is to grow through internally generated and developed prospects, participation with industry partners in oil and gas exploration and in targeted joint ventures.

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Contact Information

  • Contact:
    Blugrass Energy Inc.
    Tony Collins
    1-877-511-0110