PetroSun Announces Formation of Algae BioFuels; Subsidiary to Develop Algae-Based Biodiesel; Alternative Energy Resource to Sup

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. For more information about PetroSun visit the company's Web
site at http://www.petrosun.us.

   Except historical matter contained herein, matters discussed in
this news release are forward-looking statements and are made pursuant
to the safe harbor provision of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements reflect
assumptions, and involve risks and uncertainties which may affect the
company's business and prospects, and cause actual results to differ
materially from these forward-looking statements.