PetroSearch Energy Corporation Announces Status of Drilling Activities

HOUSTON (PR Newswire) February 3, 2005 – PetroSearch Energy Corporation (“PetroSearch” or “the Company”) (OTCPK: PTSG) today provided an activity update.

As previously announced, PetroSearch Corporation, a Texas corporation, completed a merger with PetroSearch Energy Corporation effective December 30, 2004. The purpose of the merger was to redomicile the Company in the State of Nevada The Company started trading under the symbol PTSG on December 31, 2004.

PetroSearch is in the process of completing two wells and has staked, or built, multiple locations as further described herein. At year end 2004, the Company was producing approximately an average of 200 bopd equivalent (net to the Company) from 14 producing wells. Of these wells, one is a Lodgepole Reef discovery in North Dakota and the remaining 13 wells are in the Blue Ridge Dome Field in South Texas. Currently, the Company’s focus is on the further development of the Blue Ridge Dome Field, on gas wells in Jefferson County, Mississippi and Colorado County, Texas, a natural gas exploration program in the Anadarko Basin in Oklahoma, and increasing daily production in its North Dakota well. There are several additional projects under review that could be added to the 2005 drilling budget subject to funding and technical review.

Blue Ridge Dome Field, Texas – Fort Bend County, Texas
The Company began development of the Blue Ridge Dome Field in August 2003 as its founding project. As of December 2004, the Company has 13 producing wells in the field, of which eight were wells drilled by PetroSearch and five are recompletions or workovers. In December 2004, the average gross production rate from these wells was approximately 200 bopd equivalent (approximately 100 bopd equivalent net to the Company). PetroSearch is the operator and has a 70% working interest in the Blue Ridge Field new drill prospects, with a net revenue interest to PetroSearch of 52.5%. The Company has a working interest ranging from 35% to 70% in its work-over opportunities in this field.

To support its program of development and redevelopment in the field, the Company has added 332 gross acres of leases over the past year. This brings the total leasehold position in the field to 381 gross acres, or more than 25% of the total field.

PetroSearch is to initiating its 2005 drilling program in this field during February 2005 as part of a planned multi-year project. The program consists of approximately 20 new wells plus 10 work-overs and re-completions as a part of ongoing operations. The Company’s oil purchase contract is currently for NYMEX plus $1.75 per barrel.

The first well in 2005 was spudded on February 1, 2005 as part of a back-to-back drilling program of at least 9 field tests. The Company has obtained a commitment for the drilling rig to remain in the field for up to one year of continuous drilling operations, subject to success in the initial drilling program. The Company has built five drilling locations and staked an additional four drilling locations.

Williston Basin, North Dakota
In November 2003, the Company made a major Lodgepole Reef oil discovery in Stark County, North Dakota. Since that discovery, the well has produced approximately 190,000 barrels of oil and 90,000 Mcf of gas. The Company has 63.75% working interest and is the operator. Estimated Proved Reserves for this project as of October 1, 2004 are 621,790 barrels of oil gross (290,997 barrels of oil net), with a Proved Producing and Undeveloped Reserves PV-10 of $7,906,000.

In December 2004, the average daily production for this well was approximately 200 bopd equivalent (gross) and approximately 100 bopd equivalent (net to the Company). This is a decrease from the initial production rates which were in excess of 1,500 barrels (gross) per day. The Company is in negotiations with a third party to fund an injection well to attempt to provide better pressure support in the formation and allow for an increase in production rates.

Jefferson County, Mississippi
PetroSearch drilled the Phillips-Burkley #1, its initial exploratory well on this prospect. Together with its drilling partner, PetroSearch has a total leasehold position of 7,480 acres, which we believe will allow it to exploit the entire structure. All of the drilling and completion costs are being paid by our drilling partner. In this well, we will receive a 12.5% reversionary working interest after payout to the drilling partner, which will increase to a 25% working interest after our drilling partner has been paid out 300%. The company will earn identical reversionary working interest in all future successful wells in the prospect on a well-by-well basis. The payout calculation is based only on costs attributable to each individual successful well. The Phillips-Burkley #1 well, a Hosston gas test, reached total depth of 17,300 feet and cemented the production casing on the well. Due to significant rain and the current water level of the Mississippi River, we do not expect to finish testing and well completion efforts until sometime in the end of the first or beginning of the second quarter of 2005.

The Company recovered twenty-four feet of conventional core from one of the Hosston sands in the well. The data from the core analysis, and a complete suite of open-hole logs, has been used to design a stimulation program for the well. This same data has also been evaluated by an independent consulting firm to simulate future production rates, volumes and drainage patterns that the company will use to make cash flow projections and assist with the design of the anticipated development program. Based on these analyses, commercially recoverable gas is indicated in over 300 feet of sand. Depending on the success of the stimulation, initial production capacity from this well could range from 10 MMcfd to 18 MMcfd.

Targeted probable and possible reserves from the Hosston, as estimated from the third party stimulation study are unchanged from earlier internally generated pre-drilling estimates provided by the Company’s third party engineering consultants of 76 Bcf per 640 acre unit. The Company has 10 to 12 additional prospective units that are available for development.

The next well in this prospect, scheduled to be spudded in the second quarter of 2005, is expected to test the deeper Cotton Valley formation at approximately 19,500 feet in addition to the Hosston. Preliminary internal reserve estimates for the Cotton Valley suggest they may be on the order of the Hosston formation reserve estimates.

Anadarko Basin, Oklahoma
As previously announced, the Company is conducting an exploration drilling program in the Anadarko Basin of Oklahoma and are in various stages of evaluating more than 60 prospects in Dewey, Harper, Woodward, Ellis, Wood, Roger Mills and Major Counties, Oklahoma. These prospects were provided to the Company under an exclusive prospect generation agreement with Barbee Exploration, Inc. As of December 31, 2004, the Company had approximately 8,000 gross acres (approximately 7,500 net) of leaseholds in this area.

The first two wells in this drilling program, both of which are located in Woodward County, were tests of the Morrow along with several other formations. The two wells are the Gordon #1-18, drilled to a total depth of approximately 7,776 feet and the Rushmore #1-12, drilled to a total depth of approximately 9,899 feet. The Rushmore well will be plugged and abandoned. PetroSearch has a 63.1% working interest in the well.

A prospective zone in the Lansing-Kansas City Formation at approximately 6,630 feet is currently being tested in the Gordon #1-18 well with rates while swabbing of approximately 8 barrels of oil per hour. The Company expects to put the well on pump in the next several weeks. This well is a new field discovery, and accordingly, the Company is assessing the potential reserves; initial production is expected to approximate 50 bopd equivalent. PetroSearch has a 95% working interest in this well.

The Company has built one location and has staked another on its acreage. Additional acreage has been, and will continue to be, acquired in the target area with the intent to exploit the prospect inventory subject to allocable financial resources.

Garwood Field – Colorado County, Texas
In August 2004, the Company, as operator, drilled the Pintail #1, an Upper Wilcox gas test in Colorado County, Texas to a depth of 10,413 feet on a 2,358 gross acre prospect. A second well is scheduled to spud in the second quarter 2005 to test the lower Wilcox at 16,500 feet in addition to the Upper Wilcox. The prospect geology targets both the Upper Wilcox (above approximately 11,000 feet) and the Lower Wilcox (as deep as approximately 16,500 feet) with as many as 4 wells on the existing leasehold. Based on internal estimates, these 4 locations are expected to recover in excess of 20 Bcf gross of natural gas.

Due to a shortage of completion rigs in the area, the Pintail #1 was completed in October 2004 at a gross production rate in excess of 500 Mcfd and it continues to produce at approximately the same daily rate. The estimation of recoverable reserves from the Pintail #1 is currently being conducted by an independent third party engineering firm. All of the drilling and completion costs are being paid by a drilling partner and the Company will receive a 13.33% working interest in each well after payout.

Data from the well largely supports the original geological interpretation and 3-dimensional seismic data indicates that the Wilcox structure may provide several additional drilling locations beyond the four target locations.

Management’s Comments
Richard Dole, President and CEO said, “The projects in the Blue Ridge Dome Field, the Williston Basin, the Anadarko Basin, Jefferson County, Mississippi and in the Garwood Field are significant activities to the company, and validate the success of the PetroSearch business model. In addition, we continue to maintain a significant pipeline of prospects that are a direct result of the PetroSearch business plan. Examples of these additional prospects include: 4 shallow gas prospects (between 2500 feet and 6000 feet deep) in South Central Texas and an oil prospect in Mississippi above 7500 feet. Internal volumetric estimates have indicated targeted probable and possible reserve estimates of over 4.5 billion cubic feet of potential gas reserves in the aggregate for the four shallow gas prospects and 5 million barrels of probable and possible oil reserves from as many as 8 wells for the MS prospect. The quality and quantity of our prospect inventory under evaluation continues to improve monthly, in an environment where high quality prospects are becoming harder to obtain by exploration and production companies.”