Pure Energy Services announced today that the previously disclosed acquisition by a third party purchaser of all of the equity interests of Legacy Resources Company LLC was completed on December 26, 2007. Legacy is the main supplier of 20/40 proppant for the fracturing operations of Pure Energy's wholly-owned subsidiary, Pure Energy Services (USA), Inc.
On the completion of the Acquisition Transaction, Pure USA entered into a revised sand supply agreement with Legacy on terms consistent with the previously disclosed letter of understanding entered into between Pure USA and the Purchaser. Pure USA has received the payment of $4,937,000 in satisfaction of the loan owing by Legacy to Pure USA and as reimbursement of certain expenses incurred by Pure USA. This payment represents a small discount to the aggregate of the principal amount of the outstanding loan owing by Legacy and the reimbursable expenses incurred by Pure USA.
Pure Energy has been advised by the Purchaser that the reconstruction of Legacy's processing facilities will be commenced immediately and that the Purchaser anticipates that Legacy's processing facilities will resume full operations in the 2008 second quarter. Pure Energy has also been advised that certain equipment required for the reconstruction has already been ordered by the Purchaser in order to ensure that such equipment is available when needed in the reconstruction process.
Pure USA has been receiving quantities of Fracturing Sand from Legacy and other suppliers and expects that it will continue to receive deliveries of additional volumes of Fracturing Sand from Legacy and the other suppliers until Legacy recommences full operations. Pure USA has made arrangements to store all Fracturing Sand in the rail cars leased by Pure USA on its property in Colorado.
Management is confident that, given the Fracturing Sand delivered to date and the expected deliveries of Fracturing Sand, Pure USA will have sufficient volumes of Fracturing Sand to meet its contractual obligations for the provision of fracturing services in 2008.
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