Oil and Gas Properties

North Sugar Valley Field
Blast has purchased the oil and gas interests of Sun Resources Texas, Inc., a privately-held company based in Longview, Texas (“Sun”), in the North Sugar Valley Field located in Matagorda County, Texas. Under the terms of this agreement, Blast will paid $1.2 million in cash and stock for Sun’s approximately 66% working interest, or approximately 50% net revenue interest, in 217 acres more or less and containing three wells currently producing a total of 43 gross barrels per day. The third-party estimate of net recoverable reserves to Blast is more than 60,000 barrels of oil.

Under the terms of the sales agreement Blast: (i) made a cash payment of $600,000; (ii) issued an interest free promissory note for $300,000 payable at a rate of $10,000 per month commencing October 31, 2010 with the final balance payable in full on or before October 8, 2011; and (iii) issued 6,000,000 in shares of common stock to Sun shareholders.

Blast intends to fundthe payments due under a promissory note from a portion of the payments owed to Blast from Quicksilver Resources (“Quicksilver”) in connection with the Compromise Settlement and Release Agreement entered into with Quicksilver in September 2008.

Quicksilver Lawsuit Settlement
Blast entered into a Compromise Settlement and Release Agreement with Quicksilver to resolve a pending litigation and the parties agreed to release all claims against one another and certain related parties. Quicksilver agreed to pay Blast a total of $10 million, or $7.2 million after accounting for contingency attorneys fees.

Quicksilver has made the first, second and third installment payments owed under this agreement for a net total of $5.76 million. The fourth and final payment amount of $1.44 million (net of attorneys fees) is expected to be received on September 17, 2011.