Bluegrass Energy Inc. today announced it has signed a letter of intent for the acquisition of an oil and gas lease in the Permian Basin in Crockett, County, Texas. The lease covers 4,807 acres and is currently owned by Dallas-based Petro Grande LLC, which owns an 87.5 percent working interest in the lease.

The acquisition will give Bluegrass full access to 3D seismic imaging of the lands under lease, as well as the option to participate as a working interest owner in Petro Grande’s other 9,850 acre leases.

According to the press release, geophysicists have identified a number of drilling locations on the targeted lease, and an independent geoscientist estimates there may be up to 168 billion cubic feet of natural gas reserves in the lease.

If the acquisition comes to completion, Blugrass Energy would issue to Petro Grande a promissory note in the amount of $3.5 million, secured by the lease, plus shares of common stock comprising 75 percent of the outstanding shares.

From here Bluegrass expects that it will move its headquarters to Dallas and change its name to Rio Grande Petroleum Inc.; senior management will be appointed by Petro Grande.

The transaction is subject to due diligence and necessary approvals.

The company also noted that it soon plans to file its outstanding Form 10-K Annual Report for the year ended June 30, 2010.

For more information, visit www.blugrassenergy.com