Blast Energy looks to force compliance with rig drilling dispute settlement

By Caroline Salls

Pittsburgh, May 8 - Blast Energy Services, Inc. and debtor Eagle Domestic Drilling Operations LLC asked the U.S. Bankruptcy Court for the Southern District of Texas to force Saddle Creek Energy Development to comply with a mediated settlement agreement, according to a Monday court filing.

Blast Energy and Eagle Domestic also asked the court to levy sanctions against Saddle Creek for its second breach of the settlement agreement.

According to the motion, the court already entered one order requiring Saddle Creek to comply with a settlement agreement reached on Jan. 31 because Saddle Creek did not make payments due under the settlement.

"In light of the audacity and impertinence of Saddle Creek's second flagrant breach of an announced settlement agreement this court should impose punitive sanctions," Blast Energy and Eagle Domestic said in the motion, arguing that Saddle Creek is in contempt of court.

Eagle Domestic said it incurred $8,750 in costs and legal fees associated with the mediation and related hearings, and the companies are asking the court to make Saddle Creek pay at least three times that amount in damages.

The settlement resulted from Eagle Domestic's attempts to collect amounts owed by Saddle Creek in connection with rig drilling contracts.

Under the mediated settlement, Saddle Creek was ordered to pay Eagle $675,000 in cash. Upon full payment of the $675,000 settlement amount, the parties will exchange mutual releases.

If the court decides not to enforce the settlement without a hearing, Blast Energy and Eagle Domestic requested an emergency hearing be scheduled for May 10.

Blast Energy, a Houston-based provider of fabricated mobile drilling rigs to the oil and natural gas sector, filed for bankruptcy on Jan. 19. Its Chapter 11 case number is 07-30424.

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