SEATTLE, Feb. 9, 2010 (GLOBE NEWSWIRE) -- GeoBio Energy, Inc. (Pink Sheets:GBOE) ("GeoBio"), today discusses its proposed acquisitions in the oil and natural gas services industry within the context of its November 13, 2009 and February 4, 2010 signing of Letters of Intent, including the Farmington, New Mexico based H&M Precision Products, Inc. ("H&M") and a civil construction company in the Piceance Creek Basin, Colorado (the "Target Company"). The Target Company will not be specifically named until GeoBio and the Target Company complete a definitive acquisition agreement.
H&M provides and applies proprietary chemical blends used to maintain, clean, and improve the operating efficiency of natural gas and oil wells. It primarily focuses on maintaining and improving the output and efficiency in the drilling and production phases over the course of the "life" cycle of natural gas fields and oil wells.
The Colorado based Target Company is a civil construction company that primarily constructs sites and platforms for drilling and reclamation of the site locations following the drilling phase, as well as access roads to and from wells, reserve pits and production facility pads, in the Piceance Creek Basin. Its construction services occur primarily during the site construction and site completion or restoration life cycles of natural gas fields and oil wells.
The proposed acquisitions indicate 2009 pro-forma Gross Revenue of $20 million, with a combined EBITDA of approximately $7 million. At a multiple of 7 times EBITDA, GeoBio's projected market capitalization at closing should be approximately $50 million. GeoBio believes that upon completion of the proposed acquisitions and consolidation of these companies, GeoBio will be well positioned to provide operators a wide spectrum of well site construction, drilling and production, and completion services. Moreover, GeoBio expects that, due to their firmly rooted reputations in their respective geographic areas, both H&M and the Target Company can provide to, and obtain from, each other immediate marketing and expansion opportunities in the other's geographic area, prior to seeking expansion elsewhere in North America.
L.G. Miyatovich, CEO of GeoBio, summarized, "These prospective acquisitions give GeoBio a platform for providing a broad spectrum of natural gas and oil well services to oil and natural gas well operators. We also believe that the two acquisitions will enable us to improve revenue opportunities and diversify our customer base while simultaneously providing a range of services from well site construction to completion. We believe that being able to provide a broad spectrum of services positions us to be a value added service provider in the growing and increasingly competitive oil and natural gas services industry."
GeoBio and its investment bankers, Goodrich Capital, LLC, are currently working to secure financing of up to $20 million to complete the acquisitions of the target Company and H&M. For more information on Goodrich Capital LLC, please go to: www.goodcap.com/" target="_top" rel="nofollow">www.goodcap.com
About GeoBio Energy:
GeoBio Energy's business model emphasizes the acquisition and operation of existing companies in the oil and gas services and energy industry. As oil well and gas exploration continue in the face of ever rising demand, obtaining peak efficiency and production from existing, aging wells becomes increasingly important. GeoBio believes this to be a principal challenge and an opportunity in its strategy to combine and consolidate companies in the oil and natural gas services sector. Additionally, the company is working to develop more efficient and alternative methods for handling existing resources in this sector in order to realize greater efficiencies and provide efficient, green technology services, where and when available.
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