Pedevco Corp. (PED)

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Just got this email broadcast (2:21EST) from Blast...

"Dear Blast Shareholders and Investors,

In case you missed it, I wanted to provide you with a copy of the 8-K we filed on Tuesday relating to the equity portion of the Hallwood Energy litigation settlement. As you may know, up until this amended agreement, the form of the $2.75 million equity settlement had not been determined. We believe that this is a positive result for the Company. In summary it provides:

· 7% interest in a company with natural gas reserve value upside – benefited by acquiring asset at a low in the natural gas market. Further the units are a real investment asset – not a promise to pay.

· The partnership interest is preferred with a 16% nominal coupon. There is no ability for Hallwood to cash call Blast for drilling expenditures.

· The $7.65 million book value of the units is well above the settlement value of $2.75 million - the discount significantly mitigates business risks associated with a typical E&P company:

o Lack of liquidity for a private entity

o Uncertainty of future drilling success

o Volatility of natural gas prices.

· Hallwood is incentivized to sell our interests for a minimum of $2.75 million cash should the opportunity avail itself.

In the end, it’s a play on natural gas prices and their drilling program.

This agreement eliminates the need for the equity valuation hearing originally scheduled for Friday, February 20th.

Note: the values represented above are gross settlement proceeds. The net benefit to Blast will be approximately $1.8 million after contingency legal fees.

Blast Energy Services, Inc.
14550 Torrey Chase Blvd.
Suite 330
Houston, TX 77014
281.453.2888
281.453.2899 Fax
www.blastenergyservices.com"


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