23 Juni 2006

PetroSun Announces Formation of Algae BioFuels

Subsidiary to Develop Algae-Based Biodiesel - Alternative Energy Resource to Supplement Petroleum-Based Fuels

PetroSun Drilling Inc. (Pink Sheets: PSUD), an emerging provider of oilfield services to major and independent producers of oil and natural gas, announced today that the company has formed Algae BioFuels Inc. as a wholly owned subsidiary.

Algae BioFuels will be engaged in the research and development of algae cultivation as an energy source in the production of biodiesel, an economically feasible and eco-friendly alternative to petroleum-based transportation fuels. The R&D and production facilities for Algae BioFuels will be based in Arizona and Australia.

“PetroSun’s formation of Algae BioFuels is a forward-looking strategy,” said L. Rayfield Wright, president of PetroSun. “The opportunity to produce a renewable energy product that will assist in providing a healthier planet for future generations cannot be ignored.”

Biofuel is any fuel that is derived from biomass – which contains recently living organisms or their metabolic byproducts. Biofuel is a renewable energy source, unlike other natural resources such as petroleum, coal and nuclear fuels. Agricultural products specifically grown for use as biofuels include corn and soybeans.

Extensive research is currently being conducted to determine the utilization of microalgae as an energy source, with applications being developed for biodiesel, ethanol, methanol, methane and even hydrogen. Independent studies have demonstrated that algae is capable of producing 30 times more oil per acre than the current crops now utilized for the production of biofuels. Algae biofuel contains no sulfur, is non-toxic and highly biodegradable.

The Office of Fuels Development, a division of the Department of Energy, funded a program from 1978 through 1996 under the National Renewable Energy Laboratory known as the “Aquatic Species Program”. The focus of this program was to investigate high-oil algae that could be grown specifically for the purpose of wide-scale biodiesel production. Some species of algae are ideally suited to biodiesel production due to their high oil content, in excess of 50%, and extremely rapid growth rates.

One of the biggest advantages of biodiesel, compared to many other alternative transportation fuels, is that it can be used in existing diesel engines, which relieves automotive manufacturers of having to make costly engine modifications. Biodiesel can also be mixed, at any ratio, with conventional petroleum diesel. As a result, the alternative fuel can be used in the current distribution infrastructure, replacing petroleum diesel either wholly, or as a diesel fuel blend with minimal integration costs.

About PetroSun

PetroSun’s current operations are concentrated in the Ark-La-Tex region with plans to expand into New Mexico, Arizona, Utah and Australia in 2006. PetroSun provides a comprehensive array of products and services to the oil industry. The company’s cutting-edge technologies, combined with a proven ability to apply them effectively and safely within a disciplined ROI framework, creates long-term value for PetroSun shareholders and partners. PetroSun is headquartered in Phoenix.

PetroSun Drilling Inc.
Investor Relations

(Cf. news of May 12, 2006 and June 02, 2004.)

Source: Business Wire June 22, 2006.

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