SEATTLE, May 26, 2010 (GLOBE NEWSWIRE) -- GeoBio Energy, Inc. (Pink Sheets:GBOE) ("GeoBio") is looking to become a dominant player in the oil and natural gas services field. Management believes the proposed acquisitions of (i) a civil construction company operating in the Piceance Creek Basin shale play area of Colorado and (ii) H&M Precision Products (H&M), a chemical blending company focused on oil and natural gas production improvement in the San Juan Basin shale play area of New Mexico, provide a solid platform for substantial growth.
New management, in connection with its recent due diligence review, has spent significant time onsite with the two companies and believes both companies will benefit from (i) the vision and experience of a strong management team and (ii) a proactive strategic sales and marketing plan. This combination is expected to unlock additional value through growth and expansion in existing and new geographic markets.
The civil construction company has a strong reputation in the Piceance Creek Basin and has a key customer with substantial opportunity for growth. Additional growth through expanding the business to all the major operators in the basin will be a top priority. In addition, GeoBio intends to establish a civil construction business in the San Juan Basin taking advantage of the strong, loyal customer relationships of H&M. The stellar performance, quality and safety record of the civil construction company will be a significant competitive advantage in the San Juan Basin.
H&M, operating in the San Juan Basin, is known for its quick and effective response to customer problems with customized chemical formulations tailored to the needs of individual gas and oil wells. This competitive advantage has generated customer loyalty, consistent growth and profitability and provided customers with optimum production efficiency. Through a proactive sales and marketing effort GeoBio expects to expand the customer base of H&M throughout the San Juan Basin. Further, given that the Piceance Creek Basin is developing at a rapid pace, GeoBio intends to establish immediately a chemical blending and service operations in the Piceance Basin.
The demand for oil and natural gas continues to increase in North America and around the world. New exploration and production is expanding at a rapid pace, especially in the shale areas of the U.S. The newly developing Marcellus shale play in Pennsylvania along with Texas and Louisiana shale plays are all planned expansion areas for GeoBio. In addition, after the completion of the two acquisitions, GeoBio intends to expand internationally with the first targeted area being the active oil sands area of Alberta, Canada.
GeoBio also expects to grow organically by (i) expanding geographically through the existing relationships of its pending business acquisitions and (ii) taking advantage of synergies between the two companies' customer bases. Additionally, GeoBio intends to add to these capabilities through multiple key strategic acquisitions, which will add both geographic reach and new capabilities. At present, several additional acquisition opportunities are currently being evaluated.
John L. Sams, incoming CEO of GeoBio, commented, "We are excited about the opportunities in the oil and natural gas service markets of North America and internationally with our two acquisitions. These two companies will provide a solid platform for long term growth, expansion and profitability with immediate revenue and profits. Based on a proactive, strategic sales and marketing plan, taking advantage of the synergies between the two companies, cross selling and expanding capabilities and geographically operations, we believe both companies will create significant value for our shareholders."
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, preparing and monitoring drilling sites and obtaining peak efficiency and production from existing, aging wells becomes increasingly important. GeoBio believes this to be a significant growth opportunity in its strategy to combine and consolidate companies in the oil and natural gas services sector.
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