Petrosearch Energy Announces Settlement in Southwest Garwood Field Dispute, Financing Alternatives and Completion Plans for the Kallina 46 #1

HOUSTON – September 21, 2006 – Petrosearch Energy Corporation (OTCBB:PTSG) (“Petrosearch”) announced today that it has entered into an Agreement with respect to the recently drilled Kallina 46 #1 and Pintail Flats #1 wells in the Southwest Garwood field in Colorado County, Texas. Under the terms of the Agreement, the defaulting working interest owner has paid the amounts due for completion of the Pintail Flats #1 well to Petrosearch, and has been granted a two-week time period to settle its outstanding obligation on the Kallina 46 #1 totaling approximately $7.7 million. In the event such funds are not received, Petrosearch has an option period to acquire 100% of the before payout working interest in the Kallina well and 438 lease acres (Section 46).

Based on log analysis, the Kallina 46 #1 well has encountered in excess of 310 feet of gross prospective interval in the Upper, Middle and Lower Wilcox sands at depths ranging from 9,400’ to 16,000’. Log results indicate the Kallina well is comparable to other high productivity wells in the area.

The Pintail Flats #1 well was recently recompleted in the Lower Wilcox. While the well is presently awaiting equipment, initial production rates are estimated at between 2.5 to 3.0 million cubic feet per day. Based on log interpretation, there remains over 150 feet of potentially productive interval in 6+ zones now behind pipe. Petrosearch is the operator and holds a 16% working interest after payout in this well.

In the event the defaulting working interest owner does not fulfill its obligations to settle the outstanding indebtedness, Petrosearch can exercise its option which will increase its ownership in the Kallina 46 #1 well and the 438 acres of leasehold controlled by the well from a 16% working interest after payout to a 100% working interest before payout and 84% after payout of associated lease and well costs. Under the Agreement, the defaulting working interest owner would exchange its interests and obligations in the Kallina well and the underlying 438 acres of Section 46 for a separate and as yet undrilled 240 acres where Petrosearch has a 20% working interest and 443 acres where Petrosearch has a 21.5% working interest after payout.

With regard to the financing for the Kallina project, Petrosearch is in advanced negotiations with institutional investors and industry partners to provide non-recourse financing for the well and its completion costs, as well as capital for future development of the lease.

Commenting on the Southwest Garwood field project, Richard Dole, CEO of Petrosearch stated, “We are very pleased to have reached an agreement that could positively impact our shareholders relative to this uncertainty, and which could potentially add significant cash flow and new reserves to our company. In addition to the Kallina 46 #1 well, we have an additional three offset locations on the Section 46 lease alone. It appears we may be in the geologic trend of highly prospective Wilcox sand development.”

Mr. Dole added, “We can now move forward quickly with our completion plans for this promising well. We are also executing on our other projects such as the previously announced Barnett Shale venture and accretive financings that will bring additional and meaningful revenues and cash flows to our Company.”