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EXHIBIT 10.3

 
SUBSCRIPTION AGREEMENT
IN
BLAST ENERGY SERVICES, INC.

1.           SUBSCRIPTION.  This Agreement has been executed by Clyde Berg, an
individual having a principal place of business in Cupertino, California
(“Purchaser” or “Shareholder”) in connection with the offering of units
consisting of Four (4) shares of Convertible Series A Preferred Stock  and One
(1) Warrant with an exercise price of $0.10 per share (collectively referred to
hereinafter as the "Units") of Blast Energy Services, Inc., a corporation
organized under the laws of the State of California (hereinafter referred to as
the "Company").  Purchaser hereby subscribes to purchase 1,000,000 Units at
$2.00 per Unit for a total amount of $ 2,000,000.

2.           REPRESENTATIONS BY THE UNDERSIGNED.  The undersigned represents and
warrants as follows (please select only one from (i) through (iii) below
[selecting more than one from (i) though (iii) below will invalidate this
subscription]):

(i) __X__   I am an Accredited Investor because I meet one of the following
items:

·  
is a natural person who has an individual net worth, or joint net worth
with  that person's spouse of more than $1,000,000; or

·  
is a natural person who had an individual income in excess of $200,000 in each
of the two most recent years or joint income with that person's spouse in excess
of $300,000 in each of those years and has a reasonable expectation of reaching
the same income level in the current year; or

·  
is a bank as defined in Section 3(a)(2) of the 1933 Act or any savings and loan
association or other institution as defined in Section 3(a)(5)(A) of the 1933
Act whether acting in its individual or fiduciary capacity; or

·  
any broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934; or

·  
is an insurance company as defined in Section 2(13) of the 1933 Act; or

·  
is an investment company registered under the Investment Company Act of 1940; or

·  
a business development company as defined in Section 2(a)(48) of the Investment
Company Act of 1940; or

·  
is a Small Business Investment Company licensed by the U. S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958; or

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·  
is an employee benefit plan within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, if the invest­ment decision is made by a
"plan fiduciary" (as defined in Section 3(21) of such act) which is either a
bank, insurance company, or registered investment advisor, or if the employee
benefit plan has total assets in excess of $5,000,000, or, if a self-directive
plan, its investment decisions are made solely by persons that are accredited
investors; or

·  
is a "private business development company" as defined in Section 202(a)(22) of
the Investment Advisors Act of 1940; or

·  
is an organization described in Section 501(c)(3) of the Internal Revenue Code,
corporation, Massachusetts or similar business trust, or partnership, not formed
for the specific purpose of acquiring the securities offered, with total assets
in excess of $5,000,000; or

·  
any trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Units, whose purchase is directed by a
sophisticated person as defined in the rules and regulations of the 1933 Act; or

·  
is an entity in which all of the equity owners fall within one of the categories
set forth above; or

·  
is otherwise an Accredited Investor as defined in Section 501 of Regulation D as
adopted by the Securities and Exchange Commission.

 
(ii) _____
I am not an Accredited Investor.  In the event the Investor is not an Accredited
Investor, such Investor will not be able to purchase any shares in the Company’s
offering, and this Subscription and the Investor’s funds (if any) shall be
returned to Investor and this Subscription and all rights associated therewith
shall be cancelled by the Company.

    (iii)_____
I reside outside of the United States and am not a “U.S. person” as such term is
defined under Regulation S as promulgated by the Securities and Exchange
Commission (“SEC”) under authority of the Securities Act of 1933, as amended
(the “1933 Act”).

 
(1) A “U.S. person” is defined by Regulation S as:

·  
Any natural person resident in the United States;

·  
Any partnership or corporation organized or incorporated under the laws of the
United States;

 
·  
Any estate of which any executor or administrator is a U.S. person;

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·  
Any trust of which any trustee is a U.S. person;

 
·  
Any agency or branch of a foreign entity located in the United States;

 
·  
Any non-discretionary account or similar account (other than an estate or trust)
held by a dealer or other fiduciary for the benefit or account of a U.S. person;

 
·  
Any discretionary account or similar account (other than an estate or trust)
held by a dealer or other fiduciary organized, incorporated, or (if an
individual) resident in the United States; and

 
·  
Any partnership or corporation if organized or incorporated under the laws of
any foreign jurisdiction; and formed by a U.S. person principally for the
purpose of investing in securities not registered under the Act, unless it is
organized or incorporated, and owned, by accredited investors (as defined in
Rule 501(a)) who are not natural persons, estates or trusts.

 
 
 
(2) At the time the buy order for the Units was originated, Purchaser was
outside the United States;

 
 
(3) Purchaser is purchasing the Shares for his, her or its own account and not
on behalf of any U.S. person, and the sale has not been pre-arranged with a
purchaser in the United States; and

 
 
(4) All offering documents received by the Purchaser include statements to the
affect that the securities have not been registered under the 1933 Act and may
not be offered or sold in the United States or to U.S. persons unless the
securities are registered under the 1933 Act or an exemption from the
registration requirement is available.

 

[Remainder of page left intentionally blank.]

 
 

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The undersigned further represents and warrants as follows:

 
          (a)
Subscriber represents and warrants that it is in receipt of and that it has
carefully read and reviewed the following items:

(i)  
The Company’s Form 10-KSB for the period ended December 31, 2006 (the “Form
10-K”); which discloses that the Company is currently under Chapter 11
protection of the U.S. Bankruptcy Code; and

(ii)  
All other documents filed by the Company with the SEC subsequent to the
Company’s Form 10-K and prior to the date of this Agreement, including without
limitation, the “Risk Factors” in the Form 10-K (collectively the “SEC
Filings”).  The Form 10-K and Risk Factors are accessible on the EDGAR website
on www.SEC.gov;

(iii)  
The Company’s Series A Convertible Preferred Stock Designation (the
“Designation”); and

 
        (iii)
A draft of the Company’s Disclosure Statement and Plan of Reorganization (the
“Plan”). The Plan, the 10-K the Designation and the SEC Filings shall be
referred to herein as the “Disclosure Documents.”

 
(b)  
Subscriber has been furnished with and has carefully read the Disclosure
Documents including the Risk Factors listed therein and is familiar with the
terms of the Offering.  With respect to individual or partnership tax and other
economic considerations involved in this investment, Subscriber is not relying
on the Company (or any agent or representative).  Subscriber has carefully
considered and has, to the extent Subscriber believes such discussion necessary,
discussed with Subscriber’s legal, tax, accounting and financial advisers the
suitability of an investment in the Shares for Subscriber’s particular tax and
financial situation.

(c)  
Subscriber has had an opportunity to inspect relevant documents relating to the
organization and operations of the Company.  Subscriber acknowledges that all
documents, records and books pertaining to this investment which Subscriber has
requested have been made available for inspection by Subscriber and Subscriber’s
attorney, accountant or other adviser(s).

(d)  
Subscriber and/or Subscriber’s advisor(s) has/have had a reasonable opportunity
to ask questions of and receive answers and to request additional relevant
information from a person or persons acting on behalf of the Company concerning
the Offering.

(e)  
Subscriber is not subscribing for the Securities as a result of any offering
circular, or subsequent to any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or any form of general
solicitation.

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(f)  
The undersigned recognizes that the Units have not been registered under the
Securities Act of 1933, as amended (“Act”), nor under the securities laws of any
state and, therefore, cannot be resold unless resale of is registered under the
Act or unless an exemption from registration is available; no public agency has
passed upon the fairness of the terms of the offering; the undersigned may not
sell the Units without registering them under the Act and any applicable state
securities laws unless exemptions from such registration requirements are
available with respect to any such sale;

(g)  
The undersigned is acquiring the Units for his, her or its own account for
long-term investment and not with a view toward resale, fractionalization or
division, or distribution thereof, and he, she or it does not presently have any
reason to anticipate any change in his, her or its circumstances, financial or
otherwise, or particular occasion or event which would necessitate or require
his, hers or its sale or distribution of the Units.  No one other than the
undersigned has any beneficial interest in said securities;

 
         (h)
The undersigned recognizes that the investment herein is a speculative venture
and that the total amount of funds tendered to purchase Units is placed at the
risk of the business and may be completely lost.  The purchase of Units as an
investment involves special risks;

 
          (i)
The undersigned realizes that the Shares cannot readily be sold as they will be
restricted securities and therefore the Units must not be purchased unless the
undersigned has liquid assets sufficient to assure that such purchase will cause
no undue financial difficulties and the undersigned can provide for current
needs and possible personal contingencies;

 
          (j)
The undersigned confirms and represents that he, she or it is able (i) to bear
the economic risk of his, her or its investment, (ii) to hold the Units for an
indefinite period of time, and (iii) to afford a complete loss of his, her or
its investment.  The undersigned also represents that he, she or it has (i)
adequate means of providing for his, her or its current needs and possible
personal contingencies, and (ii) has no need for liquidity in this particular
investment;

 
         (k)
The undersigned understands that the ability to transfer the Units will be
restricted which includes restrictions against transfers unless the transfer is
effected in compliance with the 1933 Act and applicable state securities laws
(including investment suitability standards); that the Company will consent to a
transfer of the Units only if the transferee represents that such transferee
meets the suitability standards required of an initial subscriber and that the
Company has the right, in its sole discretion, to refuse to consent to the
transfer of the Units;

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          (l)
All information which the undersigned has provided to the Company concerning the
undersigned's financial position and knowledge of financial and business matters
is correct and complete as of the date hereof, and if there should be any
material change in such information prior to acceptance of this Agreement by the
Company, the undersigned will immediately provide the Company with such
information;

 
         (m)
The undersigned has carefully considered and has, to the extent he, she or it
believes such discussion necessary, discussed with his, her or its professional,
legal, tax and financial advisors, the suitability of an investment in the Units
for his, her or its particular tax and financial situation and that the
undersigned and his, her or its advisers, if such advisors were deemed
necessary, have determined that the Units are a suitable investment for him, her
or it;

 
         (n)
The undersigned has not become aware of this offering and has not been offered
Units by any form of general solicitation or advertising, including, but not
limited to, advertisements, articles, notices or other communications published
in any newspaper, magazine, or other similar media or television or radio
broadcast or any seminar or meeting where, to the undersigned's knowledge, those
individuals that have attended have been invited by any such or similar means of
general solicitation or advertising; and

 
         (o)
The undersigned is a bona fide resident or operates its principal place of
business as set forth in this Subscription Agreement and Acknowledgment of
Investment.

 
         (p)
The Purchaser acknowledges that he, she or it will receive Warrants to purchase
shares of Common Stock in the form of Exhibit A attached to this Subscription
Agreement.

 
        (q)
Investor acknowledges that he, she, or it is receiving “piggy-back” registration
rights in connection with the shares of common stock which the Series A
Preferred Stock is convertible into and the shares of common stock which the
Warrants are exercisable for, which “piggy-back” registration rights are
evidenced by the Registration Rights Agreement attached hereto as Exhibit B.

3.           THE UNDERSIGNED FURTHER CERTIFIES THAT HE, SHE OR IT UNDERSTANDS
THAT:

(a)  
THIS SUBSCRIPTION IS SUBJECT TO THE APPROVAL OF THE COMPANY’S PLAN OF
REORGANIZATION, AND THE ISSUANCE, BY THE BANKRUPTCY COURT OF A CONFIRMATION
ORDER, AS WELL AS THE COMPANY’S SUCCESSFUL DESIGNATION OF THE SERIES A PREFERRED
STOCK (THE “APPROVAL”).

(b)  
THE COMPANY SHALL BE ABLE TO CANCEL THIS SUBSCRIPTION AND RETURN THE
SUBSCRIBER’S FUNDS PAID IN CONNECTION WITH SUCH SUBSCRIPTION IN THE COMPANY’S
SOLE DISCRETION IF ANY TIME WITHIN THE PERIOD OF THIRTY (30) DAYS FOLLOWING THE
APPROVAL, (THE “DEADLINE”).

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(c)  
THIS SUBSCRIPTION SHALL AUTOMATICALLY BE REJECTED BY THE COMPANY AND ALL
SUBSCRIPTION FUNDS RETURNED TO THE SUBSCRIBER IN THE EVENT THE APPROVAL DOES NOT
OCCUR PRIOR TO DECEMBER 31, 2007.

(d)  
THIS SUBSCRIPTION SHALL BE AUTOMATICALLY ACCEPTED AS OF THE DATE OF THE
DEADLINE, IN THE EVENT THE APPROVAL HAS OCCURRED PRIOR TO DECEMBER 31, 2007, AND
THIS SUBSCRIPTION HAS NOT OTHERWISE BEEN CANCELLED BY THE COMPANY PURSUANT TO
SECTION (B) ABOVE.  IN THE EVENT THIS SUBSCRIPTION IS NOT REJECTED AND/OR
CANCELLED PRIOR TO THE DEADLINE, THE EFFECTIVE DATE OF THIS SUBSCRIPTION AND ANY
WARRANTS GRANTED IN CONNECTION HEREWITH SHALL BE SUCH DEADLINE DATE.

(e)  
The Subscription hereunder is irrevocable by Investor, that, except as required
by law, Investor is not entitled to cancel, terminate or revoke this Agreement
or any agreements of Investor hereunder and that this Subscription Agreement and
such other agreements shall survive the death or disability of Investor and
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, successors, legal representatives
and permitted assigns.  If Investor is more than one person, the obligations of
Investor hereunder shall be joint and several and the agreements,
representations, warranties and acknowledgments herein contained shall be deemed
to be made by and be binding upon each such person and his or her heirs,
executors, administrators, successors, legal representatives and permitted
assigns.

(f)  
No federal or state agency has made any findings or determination as to the
fairness of the terms of this Offering for investment purposes; or any
recommendations or endorsements of the Units, Shares or Warrants.

(g)  
The Offering is intended to be exempt from registration under the Securities Act
by virtue of Section 4(2) of the Securities Act and the provisions of Rule 506
of Regulation D thereunder, which is in part dependent upon the truth,
completeness and accuracy of the statements made by the Investor herein.

(h)  
It is understood that in order not to jeopardize the Offering’s exempt status
under Section 4(2) of the Securities Act and Regulation D, any transferee may,
at a minimum, be required to fulfill the investor suitability requirements
thereunder.

(i)  
No person or entity acting on behalf, or under the authority, of Investor is or
will be entitled to any broker’s, finder’s or similar fee or commission in
connection with this Subscription.

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(j)  
Investor acknowledges that the information furnished in this Agreement by the
Company to Investor or its advisers in connection with the Offering, is
confidential and nonpublic and agrees that all such written information which is
material and not yet publicly disseminated by the Company shall be kept in
confidence by Investor and neither used by Investor for Investor’s personal
benefit (other than in connection with this Subscription), nor disclosed to any
third party, except Investor’s legal and other advisers who shall be advised of
the confidential nature of such information, for any reason; provided, however,
that this obligation shall not apply to any such information that (i) is part of
the public knowledge or literature and readily accessible at the date hereof,
(ii) becomes a part of the public knowledge or literature and readily accessible
by publication (except as a result of a breach of this provision) or (iii) is
received from third parties (except third parties who disclose such information
in violation of any confidentiality agreements or obligations, including,
without limitation, any subscription agreement entered into with the
Company).  The representations, warranties and agreements of Investor and the
Company contained herein and in any other writing delivered in connection with
the Offering shall be true and correct in all material respects on and as of the
date of such Subscription as if made on and as of the date the Company executes
this Agreement and shall survive the execution and delivery of this Agreement.

(k)  
IN MAKING AN INVESTMENT DECISION, INVESTOR MUST RELY ON ITS OWN EXAMINATION OF
THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS
INVOLVED.  THE COMMON SHARES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE
SECURITIES COMMISSION OR REGULATORY AUTHORITY. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

4.           Indemnification.  It is acknowledged that the meaning and legal
consequences of the representations and warranties contained in this Agreement
are understood and the undersigned hereby agrees to indemnify and hold harmless
the Company and each purchaser of Units from and against any and all loss,
damage, and liability due to or arising out of a breach of any of the
representations and warranties made in this Agreement.  The representations and
warranties contained herein are intended to and shall survive delivery of the
Agreement.

 
 

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5.           Restrictions on Transferability of Units.  The undersigned hereby
agrees that the Shares and Warrants being purchased by him, her or it and any
agreement or certificate evidencing such securities shall be stamped or
otherwise imprinted with a conspicuous legend in substantially the following
form:

"The securities represented by this certificate have not been registered under
the Securities Act of 1933 or any state securities act.  The securities have
been acquired for investment and may not be sold, transferred, pledged or
hypothecated unless (i) they shall have been registered under the Securities Act
of 1933 and any applicable state securities act, or (ii) the corporation shall
have been furnished with an opinion of counsel, satisfactory to counsel for the
corporation, that registration is not required under any such acts."

6.           Purchase Payment.   The purchase price shall be paid to the Company
in cash, check or via wire transfer simultaneously with the undersigned entry
into this Agreement.

7.           Effect of Facsimile and Photocopied Signatures. This Agreement may
be executed in several counterparts, each of which is an original.  It shall not
be necessary in making proof of this Agreement or any counterpart hereof to
produce or account for any of the other counterparts.  A copy of this Agreement
signed by one party and faxed to another party shall be deemed to have been
executed and delivered by the signing party as though an original.  A photocopy
of this Agreement shall be effective as an original for all purposes.

[Remainder of page left intentionally blank.  Signature page follows.]

 
 

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8.           Number of Units Purchased.  The undersigned hereby subscribes to
purchase
1,000,000 Units (each consisting of four (4) shares of the Company’s Series A
Preferred Stock and one (1) warrant to purchase one share of the Company’s
common stock at an exercise price of $0.10 per share) for an aggregate purchase
price of $2,000,000 ($2.00 per Unit).

This Agreement is executed this the 30th day of January, 2008, at Cupertino, CA.

“PURCHASER”

Name (please print);        Clyde Berg    

If entity named above,
By:                                                                                                                                      

                Its:                                                                                                                     

Number of Preferred Shares: 4,000,000   Check enclosed in the amount of
$2,000,000

Subscribed For:  1,000,000 Units

Social Security or Taxpayer I.D. Number [required]:   XXX-XX-XXXX        

Business Address (including zip code):    XXXXXXXXXXXXXXXX        

Business Phone: (XXX)  XXX-XXXX                            

Residence Address (including zip code):                          

Residence Phone:
(    )                                                                                                                                                 

All communications to be sent to:

          X          Business or

                    Residence Address

Please indicate on the following page the form in which you will hold title to
your interest in the Shares and Warrants.  PLEASE CONSIDER CAREFULLY.  ONCE YOUR
SUBSCRIPTION IS ACCEPTED, A CHANGE IN THE FORM OF TITLE CON­STI­TUTES A TRANSFER
OF THE INTEREST IN THE SHARES AND/OR WARRANTS AND MAY THEREFORE BE RESTRICTED BY
THE TERMS OF THIS SUBSCRIPTION, THE SHARES AND/OR WARRANTS AND MAY RESULT IN
ADDITIONAL COSTS TO YOU.  Subscribers should seek the advice of their attorneys
in deciding in which of the forms they should take ownership of the interest in
the Shares, because different forms of ownership can have varying gift tax,
estate tax, income tax, and other consequences, depending on the state of the
investor's domicile and his or her particular personal circumstances.

 
 

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Please select one of the following forms of ownership:

        X
INDIVIDUAL OWNERSHIP (one signature required)

 
JOINT TENANTS WITH RIGHT OF SURVIVORSHIP AND NOT AS TENANTS IN COMMON (both or
all parties must sign)

 
COMMUNITY PROPERTY (one signature required if interest held in one name, i.e.,
managing spouse; two signatures required if interest held in both names)

 
TENANTS IN COMMON (both or all parties must sign)

 
GENERAL PARTNERSHIP (fill out all documents in the name of the PARTNERSHIP, by a
PARTNER authorized to sign, and include a copy of the Partnership Agreement)

 
LIMITED PARTNERSHIP (fill out all documents in the name of the LIMITED
PARTNERSHIP, by a GENERAL PARTNER autho­rized to sign, and include a copy of the
Limited Partnership Agreement and any other document showing that the investment
is authorized)

 
LIMITED LIABILITY COMPANY (fill out all documents in the name of the LIMITED
LIABILITY COMPANY, by a member authorized to sign, and include a copy of the
LIMITED LIABILITY COMPANY’s Operating Agreement and any other documents
necessary to show the investment is authorized.)

 
CORPORATION (fill out all documents in the name of the CORPORATION, by the
President or other officer authorized to sign, and include a copy of the
Corporation's Articles and certified Corporate Resolution authorizing the
signature)

 
TRUST (fill out all documents in the name of the TRUST, by the Trustee, and
include a copy of the instrument creating the trust and any other documents
necessary to show the investment by the Trustee is authorized.  The date of the
trust must appear on the Notarial where indicated.)

Subject to acceptance by the Company, the undersigned has completed this
Subscription Agreement to evidence his/her sub­scrip­tion for participation in
the Shares of the Company, this 30th day of January, 2008, Cupertino, CA.

 
                                    /s/Clyde Berg                 
Subscriber
     Clyde Berg                 
Printed name

If an entity, on behalf of:
______________________________________
Subscriber’s position with entity:
______________________________________

The Company has accepted this subscription this ____ day of __________ 2007,
subject to Section 3(a), (b) and (c).

 
Blast Energy Services, Inc., a California Corporation

By    /s/John O’Keefe            
       Its:     CEO                    
Printed Name:   John O’Keefe            
 

 
 

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Exhibit A

BLAST ENERGY SERVICES, INC.

WARRANT AGREEMENT

Date: January 31,  2008

To Whom It May Concern:

BLAST ENERGY SERVICES, INC. (the “Company”), for value received, hereby agrees
to issue common stock purchase warrants entitling Clyde Berg (“Holder”) and
his/her/its assigns to purchase an aggregate of 1,000,000 shares of the
Company’s common stock (“Common Stock”).  Such warrant is evidenced by a warrant
certificate in the form attached hereto as Schedule 1 (such instrument being
hereinafter referred to as a “Warrant,” and such Warrant and all instruments
hereafter issued in replacement, substitution, combination or subdivision
thereof being hereinafter collectively referred to as the “Warrant”). The
Warrant is issued to Holder in connection with Holder’s subscription for Units
in the Company in connection with the Subscription Agreement in Blast Energy
Services, Inc. which this Warrant is attached to as Exhibit A.  The number of
shares of Common Stock purchasable upon exercise of the Warrant is subject to
adjustment as provided in Section 5 below.  The Warrant will be exercisable by
the Warrant Holder (as defined below) as to all or any lesser number of shares
of Common Stock covered thereby, at an initial purchase price of US $0.10 per
share (the “Purchase Price”), subject to adjustment as provided in Section 5
below, for the exercise period defined in Section 3(a) below.  The term “Warrant
Holder” refers to the person whose name appears on the signature page of this
agreement and any transferee or transferees of any of them permitted by Section
2(a) below.  The Subscription for this Warrant was accepted by the Company on
January 31, 2008, which gives this Warrant an effective date of January 31,
2008.

1.  
Representations and Warranties.

The Company represents and warrants to you as follows:

(a)  
Corporate and Other Action.  The Company has all requisite power and authority
(corporate and other), and has taken all necessary corporate action, to
authorize, execute, deliver and perform this Warrant Agreement, to execute,
issue, sell and deliver the Warrant and a certificate or certificates evidencing
the Warrant, to authorize and reserve for issue and, upon payment from time to
time of the Purchase Price, to issue, sell and deliver, the shares of the Common
Stock issuable upon exercise of the Warrant (“Shares”), and to perform all of
its obligations under this Warrant Agreement and the Warrant.  The Shares, when
issued in accordance with this Warrant Agreement, will be duly authorized and
validly issued and outstanding, fully paid and nonassessable and free of all
liens, claims, encumbrances and preemptive rights. This Warrant Agreement and,
when issued, each Warrant issued pursuant hereto, has been or will be duly
executed and delivered by the Company and is or will be a legal, valid and
binding agreement of the Company, enforceable in accordance with its terms.  No
authorization, approval, consent or other order of any governmental entity,
regulatory authority or other third party is required for such authorization,
execution, delivery, performance, issue or sale.

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(b)  
No Violation.  The execution and delivery of this Warrant Agreement, the
consummation of the transactions herein contemplated and the compliance with the
terms and provisions of this Warrant Agreement and of the Warrant will not
conflict with, or result in a breach of, or constitute a default or an event
permitting acceleration under, any statute, the Articles of Incorporation or
Bylaws of the Company or any indenture, mortgage, deed of trust, note, bank
loan, credit agreement, franchise, license, lease, permit, or any other
agreement, understanding, instrument, judgment, decree, order, statute, rule or
regulation to which the Company is a party or by which it is bound.

2.  
Transfer.

(a)  
Transferability of Warrant.  You agree that the Warrant is being acquired as an
investment and not with a view to distribution thereof and that the Warrant may
not be transferred, sold, assigned or hypothecated except as provided
herein.  You further acknowledge that the Warrant may not be transferred, sold,
assigned or hypothecated unless pursuant to a registration statement that has
become effective under the Securities Act of 1933, as amended (the “Act”),
setting forth the terms of such offering and other pertinent data with respect
thereto, or unless you have provided the Company with an acceptable opinion from
acceptable counsel that such registration is not required. Certificates
representing the Warrant shall bear an appropriate legend.  Notwithstanding the
foregoing, any request to transfer the Warrant must be accompanied by the Form
of Assignment and Transfer attached hereto as Schedule 2 executed by the Warrant
Holder.

(b)  
Registration of Shares.  You agree not to make any sale or other disposition of
the Shares except pursuant to a registration statement which has become
effective under the Act, setting forth the terms of such offering, the
underwriting discount and commissions and any other pertinent data with respect
thereto, unless you have provided the Company with an acceptable opinion of
counsel acceptable to the Company that such registration is not
required.  Certificates representing the Shares, which are not registered as
provided in this Section 2, shall bear an appropriate legend and be subject to a
“stop-transfer” order.

3.  
Exercise of Warrant, Partial Exercise.

(a)  
Exercise Period.  This Warrant shall expire and all rights hereunder shall be
extinguished three years (3) years from the date first written above.

(b)  
Exercise in Full.  Subject to Section 3(a), a Warrant may be exercised in full
by the Warrant Holder by surrender of the Warrant, with the Form of Subscription
attached hereto as Schedule 3 executed by such Warrant Holder, to the Company,
accompanied by payment as determined by 3(d) below, in the amount obtained by
multiplying the number of Shares represented by the respective Warrant by the
Purchase Price per share (after giving effect to any adjustments as provided in
Section 5 below).

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(c)  
Partial Exercise.  Subject to Section 3(a), each Warrant may be exercised in
part by the Warrant Holder by surrender of the Warrant, with the Form of
Subscription attached hereto as Schedule 3 at the end thereof duly executed by
such Warrant Holder, in the manner and at the place provided in Section 3(b)
above, accompanied by payment as determined by 3(d) below, in amount obtained by
multiplying the number of Shares designated by the Warrant Holder in the Form of
Subscription attached hereto as Schedule 3 to the Warrant by the Purchase Price
per share (after giving effect to any adjustments as provided in Section 5
below).  Upon any such partial exercise, the Company at its expense will
forthwith issue and deliver to or upon the order of the Warrant Holder a new
Warrant of like tenor, in the name of the Warrant Holder subject to Section
2(a), calling in the aggregate for the purchase of the number of Shares equal to
the number of such Shares called for on the face of the respective Warrant
(after giving effect to any adjustment herein as provided in Section 5 below)
minus the number of such Shares designated by the Warrant Holder in the
aforementioned form of subscription.

(d)  
Payment of Purchase Price.  The Purchase Price may be made by any of the
following or a combination thereof, at the election of the Warrant Holder:

 
 
(i)             
in cash;

 
(ii)
by wire transfer; or

 
(iii)
by certified or cashier’s check, or money order.

 
4.  
Delivery of Stock Certificates on Exercise.

Any exercise of the Warrant pursuant to Section 3 shall be deemed to have been
effected immediately prior to the close of business on the date on which the
Warrant together with the Form of Subscription and the payment for the aggregate
Purchase Price shall have been received by the Company.  At such time, the
person or persons in whose name or names any certificate or certificates
representing the Shares or Other Securities (as defined below) shall be issuable
upon such exercise shall be deemed to have become the holder or holders of
record of the Shares or Other Securities so purchased.  As soon as practicable
after the exercise of any Warrant in full or in part, and in any event within
Ten (10) business days thereafter, the Company at its expense (including the
payment by it of any applicable issue taxes) will cause to be issued in the name
of, and delivered to the purchasing Warrant Holder, a certificate or
certificates representing the number of fully paid and nonassessable shares of
Common Stock or Other Securities to which such Warrant Holder shall be entitled
upon such exercise, plus in lieu of any fractional share to which such Warrant
Holder would otherwise be entitled, cash in an amount determined pursuant to
Section 6(e).  The term “Other Securities” refers to any stock (other than
Common Stock), other securities or assets (including cash) of the Company or any
other person (corporate or otherwise) which the Warrant Holder at any time shall
be entitled to receive, or shall have received, upon the exercise of the
Warrant, in lieu of or in addition to Common Stock, or which at any time shall
be issuable or shall have been issued in exchange for or in replacement of
Common Stock or Other Securities pursuant to Section 5 below or otherwise.

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5.  
Adjustment of Purchase Price and Number of Shares Purchasable.

The Purchase Price and the number of Shares are subject to adjustment from time
to time as set forth in this Section 5.

(a)  
In case the Company shall at any time after the date of this Warrant Agreement
(i) declare a dividend on the Common Stock in shares of its capital stock, (ii)
subdivide the outstanding Common Stock, (iii) combine the outstanding Common
Stock into a smaller number of Common Stock, or (iv) issue any shares of its
capital stock by reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then in each case the Purchase Price,
and the number and kind of Shares receivable upon exercise, in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination, or reclassification shall be proportionately adjusted
so that the holder of any Warrant exercised after such time shall be entitled to
receive the aggregate number and kind of Shares which, if such Warrant had been
exercised immediately prior to such record date, he would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination, or reclassification.  Such adjustment shall be made successively
whenever any event listed above shall occur.

(b)  
No adjustment in the Purchase Price shall be required if such adjustment is less
than US $0.01; provided, however, that any adjustments which by reason of this
subsection (b) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment.  All calculations under this Section
5 shall be made to the nearest cent or to the nearest one-thousandth of a share,
as the case may be.

(c)  
Upon each adjustment of the Purchase Price as a result of the calculations made
in subsection (a) of this Section 5, the Warrant outstanding prior to the making
of the adjustment in the Purchase Price shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of Shares (calculated to
the nearest thousandth) obtained by (i) multiplying the number of Shares
purchasable upon exercise of the Warrant immediately prior to adjustment of the
number of Shares by the Purchase Price in effect prior to adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of the Purchase Price.

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6.  
Further Covenants of the Company.

(a)  
Dilution or Impairments.  The Company will not, by amendment of its certificate
of incorporation or through any reorganization, transfer of assets,
consolidation, merger or dissolution, avoid or seek to avoid the observance or
performance of any of the terms of the Warrant or of this Warrant Agreement, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or appropriate in order to
protect the rights of the Warrant Holder against dilution or other
impairment.  Without limiting the generality of the foregoing, the Company:

(i)  
shall at all times reserve and keep available, solely for issuance and delivery
upon the exercise of the Warrant, all shares of Common Stock (or Other
Securities) from time to time issuable upon the exercise of the Warrant and
shall take all necessary actions to ensure that the par value per share, if any,
of the Common Stock (or Other Securities) is at all times equal to or less than
the then effective Purchase Price per share; and

(ii)  
will take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock or Other Securities upon the exercise of the Warrant from time to
time outstanding.

(b)  
Title to Stock.  All Shares delivered upon the exercise of the Warrant shall be
validly issued, fully paid and nonassessable; each Warrant Holder shall, upon
such delivery, receive good and marketable title to the Shares, free and clear
of all voting and other trust arrangements, liens, encumbrances, equities and
claims whatsoever; and the Company shall have paid all taxes, if any, in respect
of the issuance thereof.

(c)  
Exchange of Warrant.  Subject to Section 2(a) hereof, upon surrender for
exchange of any Warrant to the Company, the Company at its expense will promptly
issue and deliver to or upon the order of the holder thereof a new Warrant or
like tenor, in the name of such holder or as such holder (upon payment by such
Warrant holder of any applicable transfer taxes) may direct, calling in the
aggregate for the purchase of the number of Shares called for on the face of the
Warrant surrendered.  The Warrant and all rights thereunder are transferable in
whole or in part upon the books of the Company by the registered holder thereof,
subject to the provisions of Section 2(a), in person or by duly authorized
attorney, upon surrender of the Warrant, duly endorsed, at the principal office
of the Company.

(d)  
Replacement of Warrant.  Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of any Warrant and, in the
case of any such loss, theft or destruction, upon delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company or, in the
case of any such mutilation, upon surrender and cancellation of such Warrant,
the Company, at the expense of the Warrant Holder, will execute and deliver, in
lieu thereof, a new Warrant of like tenor.

--------------------------------------------------------------------------------

(e)  
Fractional Shares.  No fractional Shares are to be issued upon the exercise of
any Warrant, but the Company shall round any fraction of a share to the nearest
whole Share.

7.  
Other Warrant Holders: Holders of Shares.

The Warrant is issued upon the following terms, to all of which each Warrant
Holder by the taking thereof consents and agrees: (a) any person who shall
become a transferee, within the limitations on transfer imposed by Section 2(a)
hereof, of a Warrant properly endorsed shall take such Warrant subject to the
provisions of Section 2(a) hereof and thereupon shall be authorized to represent
himself, herself or itself as absolute owner thereof and, subject to the
restrictions contained in this Warrant Agreement, shall be empowered to transfer
absolute title by endorsement and delivery thereof to a permitted bona fide
purchaser for value; (b) any person who shall become a holder or owner of Shares
shall take such shares subject to the provisions of Section 2(b) hereof; (c)
each prior taker or owner waives and renounces all of his equities or rights in
such Warrant in favor of each such permitted bona fide purchaser, and each such
permitted bona fide purchaser shall acquire absolute title thereto and to all
rights presented thereby; and (d) until such time as the respective Warrant is
transferred on the books of the Company, the Company may treat the registered
holder thereof as the absolute owner thereof for all purposes, notwithstanding
any notice to the contrary.

8.  
Miscellaneous.

All notices, certificates and other communications from or at the request of the
Company to any Warrant Holder shall be mailed by first class, registered or
certified mail, postage prepaid, to such address as may have been furnished to
the Company in writing by such Warrant Holder, or, until an address is so
furnished, to the address of the last holder of such Warrant who has so
furnished an address to the Company, except as otherwise provided herein.  This
Warrant Agreement and any of the terms hereof may be changed, waived, discharged
or terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought.  This
Warrant Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Texas.  The headings in this Warrant
Agreement are for purposes of reference only and shall not limit or otherwise
affect any of the terms hereof.  This Warrant Agreement, together with the forms
of instruments annexed hereto as schedules, constitutes the full and complete
agreement of the parties hereto with respect to the subject matter hereof.  For
purposes of this Warrant Agreement, a faxed signature shall constitute an
original signature.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Company has caused this Warrant Agreement to be executed
on this 31st day of January, 2008, in Houston, TX, by its proper corporate
officers, thereunto duly authorized.

BLAST ENERGY SERVICES, INC.

By   /s/John O’Keefe            
       Its:    CEO                    
Printed Name:   John O’Keefe        

 
 

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Exhibit A

SCHEDULE 1
 
WARRANT

THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN
REGISTERED UNDER: (A) THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), IN
RELIANCE UPON THE EXEMPTIONS FROM REGISTRATION PROVIDED IN SECTIONS 3 AND 4 OF
SUCH ACT AND REGULATION S PROMULGATED THEREUNDER; OR (B) ANY STATE SECURITIES
LAWS IN RELIANCE UPON APPLICABLE EXEMPTIONS THEREUNDER.  THIS WARRANT MAY NOT BE
EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON UNLESS REGISTERED UNDER THE ACT OR
AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.  THIS WARRANT MUST BE ACQUIRED
FOR INVESTMENT ONLY FOR THE ACCOUNT OF THE INVESTOR, AND NEITHER THE WARRANT NOR
THE UNDERLYING STOCK MAY BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE PROVISIONS
OF REGULATION S AND OTHER LAWS OR PURSUANT TO REGISTRATION UNDER THE ACT OR AN
AVAILABLE EXEMPTION FROM REGISTRATION.  HEDGING TRANSACTIONS INVOLVING THIS
WARRANT OR THE SECURITIES TO BE ISSUED UPON ITS EXERCISE MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE ACT.

To Purchase 1,000,000 Shares
of Common Stock
BLAST ENERGY SERVICES, INC.

This certifies that, for value received, the hereafter named registered owner is
entitled, subject to the terms and conditions of this Warrant, until the
expiration date, to purchase the number of shares (the “Shares”) set forth above
of the common stock (“Common Stock”), of BLAST ENERGY SERVICES, INC. (the
“Company”) from the Company at the purchase price per share hereafter set forth
below, on delivery of this Warrant to the Company with the exercise form duly
executed and payment of the purchase price (in cash or by certified or bank
cashier’s check payable to the order of the Company) for each Share
purchased.  This Warrant is subject to the terms of the Warrant Agreement
between the parties thereto dated as of January 31,2008, the terms of which are
hereby incorporated herein.  Reference is hereby made to such Warrant Agreement
for a further statement of the rights of the holder of this Warrant.

Registered Owner:  Clyde
Berg                                                                                                Date:
January 31, 2008

Purchase Price
  Per Share:                                US $0.10

Expiration Date:
Subject to Section 3(a) of the Warrant Agreement, 5:00 p.m. Central Standard
Time.

WITNESS the signature of the Company’s authorized officer:

BLAST ENERGY SERVICES, INC.

                                    By   /s/John O’Keefe            
       Its:    CEO                    
Printed Name:   John O’Keefe        

 
 

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Exhibit A

SCHEDULE 2

FORM OF ASSIGNMENT AND TRANSFER

For value received, the undersigned hereby sells, assigns and transfers unto
__________________________________ the right represented by the enclosed Warrant
to purchase _________________ shares of Common Stock of
BLAST ENERGY SERVICES, INC. to which the enclosed Warrant relates, and appoints
Attorney to transfer such right on the books of BLAST ENERGY SERVICES, INC. with
full power of substitution in the premises.

The undersigned represents and warrants that the transfer of the enclosed
Warrant is permitted by the terms of the Warrant Agreement pursuant to which the
enclosed Warrant has been issued, and the transferee hereof, by his, her or its
acceptance of this Agreement, represents and warrants that he, she or it is
familiar with the terms of said Warrant Agreement and agrees to be bound by the
terms thereof with the same force and effect as if a signatory thereto.

Dated:______________

____________________________________________
(Signature must conform in all respects to name of holder
 as specified on the face of  the enclosed Warrant)

____________________________________________
(Address)

Signed in the presence of:

____________________________________

 
 

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Exhibit A

 
SCHEDULE 3

FORM OF SUBSCRIPTION
b
(To be signed only upon exercise of Warrant)

To BLAST ENERGY SERVICES, INC.:

The undersigned, the holder of the enclosed Warrant, hereby irrevocably elects
to exercise the purchase right represented by such Warrant for, and to purchase
thereunder,* shares of Common Stock of BLAST ENERGY SERVICES, INC. and herewith
makes payment of US $_______________ therefore, and requests that the
certificate or certificates for such shares be issued in the name of and
delivered to the undersigned.

The undersigned hereby certifies that the undersigned is not a U.S. person and
the warrant is not being exercised on behalf of a U.S. person, or, if
applicable, the undersigned has attached an opinion of counsel to the effect
that the warrant and the securities to be delivered upon exercise thereof have
been registered under the Securities Act of 1933, as amended or are exempt from
registration thereunder.

Dated:______________

____________________________________________
(Signature must conform in all respects to name of holder
 as specified on the face of  the enclosed Warrant)

____________________________________________
(Address)

___________________________

(*)           Insert here the number of shares called for on the face of the
Warrant or, in the case of a partial exercise, the portion thereof as to which
the Warrant is being exercised, in either case without making any adjustment for
additional Common Stock or any other stock or other securities or property
which, pursuant to the adjustment provisions of the Warrant Agreement pursuant
to which the Warrant was granted, may be delivered upon exercise.