Source: Legend Oil and Gas, Ltd.
Alpharetta, Georgia, April 7, 2015 (GLOBE NEWSWIRE) -- Legend Oil and Gas Ltd. (OTC Markets: LOGL) ( "Legend ", the "Company") is excited to announce that on April 3, 2015, it closed on the acquisition of Maxxon Energy, purchasing 100% of Black Diamond Energy Holdings, LLC and related companies- together Maxxon Energy).
Maxxon was founded in 2012 and has grown from zero revenue to over $10 million in revenue (unaudited) for 2014. Maxxon Energy is a last mile trucking company in North Dakota (The Bakken), transporting oil for various companies, many of which are some of the largest oil producing operators in North Dakota. Its customers currently include Statoil, Northern Tier Energy (Western Refineries) and Bridger Trading Group among others.
Maxxon had unaudited net income and EBITDA of over $1.5 million for the year ended December 31, 2014, currently has no debt and as of the same year end, had (unaudited) approximately $6 million in total assets (which include cash, receivables and the depreciated value of its rolling stock).
In the first quarter of 2015, Maxxon generated revenue of approximately $2.82 million (unaudited) in gross revenue and EBITDA of approximately $400,000 (unaudited).
Maxxon began operations in 2012 with six (6) trucks and as of 2015 owns 17 trucks, with additional leases of eleven (11) trucks, for a current operational fleet of 28 trucks. The combined Maxxon-Legend management team believes that by June 30, 2015, total trucks in operation at Maxxon will be between 35-40 trucks owned and/or operated.
Andy Reckles, Legend Chairman of the Board and CEO states, "We are so very excited about having closed on the purchase of Maxxon Energy. This is an incredibly solid business with exceptional management and a first class operating team. The acquisition of Maxxon moves Legend Oil and Gas from its historic dependence on the Upstream portion of the Oil Industry, squarely into the Midstream., While the Company hopes to continue expanding its current Oil and Gas exploration and production business in Kansas and Oklahoma, and will continue to look for opportunities that meet our low cost/low risk thesis, Maxxon's business brings steady, measurable and GROWING, revenues and cash flows to Legend, and allows us to avail ourselves to real market multiples for our stock price to be measured by, while simultaneously helping to counter the affects of the downturn in overall commodity pricing. As Al Valentin, CEO of Maxxon, and I work together going forward, I have high confidence that we can easily expand our fleet, customer base, and revenue/cash flow stream over the next twelve months."
Based on internal forecasts, Al Valentin, founder and CEO of Maxxon Energy, indicates that "2015 is growing substantially beyond our expectations with all organic growth through new customer contracts as well as significantly increased volume from current customers." Valentin further states that "with improvements expected as part of the Legend management team and its philosophy of making the appropriate investments in infrastructure, our expectation is that growth will continue on a positive trajectory."
Warren Binderman, Legend CFO and Board member states that "this acquisition is truly transformative to Legend as it increases both our revenue and asset base, with the expectation that we will be cash flow positive as a multi-platform oil services business almost immediately." Valentin further states that "both Andy Reckles, Legend CEO, and Warren Binderman, Legend CFO, have demonstrated through the acquisition process that we will become an integral part of making the consolidated Company more synergistic, enhancing value for company-wide stakeholders."
Binderman notes that "now that we closed this transaction, after going through a detailed due diligence process learning all we now know about Maxxon Energy, we truly view the efficiencies that will enhance stakeholder value." Binderman further states that "in working through the mechanics of the acquisition, Al and his management team demonstrated they are truly excellent operators that know how to build a business producing significant returns on investment. We are excited to commence the integration process and continue working closely with Maxxon Energy."
"Approximately four weeks ago, Legend engaged its independent auditors to perform an independent audit of Maxxon's combined companies in accordance with generally accepted auditing standards in the U.S. This process commenced to meet the applicable SEC requirements in providing GAAP financial statements of Maxxon in Legend's 8-K, along with the required proforma financial statements. We anticipate filing the required 8-K with the SEC (combined audited audited balance sheets, income statements, statements of cash flows and stockholders' equity, as well as pro-formas with Legend's financials) as soon as the audit is complete, but well within the statutorily mandated period", concluded Binderman. Additionally, Binderman noted that "Legend will be filing a Current Report on Form 8-K shortly describing the financial terms of the transaction."
About Legend Oil and Gas Ltd.
Legend Oil and Gas Ltd. is a managed risk, oil and gas exploration/exploitation, development and production company with activities currently focused on leases in southeastern Kansas and Oklahoma.
This press release contains forward-looking statements concerning future events and the Company's growth and business strategy. Words such as "expects," "will," "intends," "plans," "believes," "anticipates," "hopes," "estimates," and variations on such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Forward looking statements in this press release include statements about our drilling development program. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the timing and results of our 2015 drilling and development plan. Additional factors include increased expenses or unanticipated difficulties in drilling wells, actual production being less than our development tests, changes in the Company's business; competitive factors in the market(s) in which the Company operates; risks associated with oil and gas operations in the United States; and other factors listed from time to time in the Company's filings with the Securities and Exchange Commission including the Company's Annual Report on Form 10-K for the year ended December 31, 2014. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.
Warren S. Binderman (678) 595-6243 Andrew S. Reckles (770) 861-1643