PetroSun Algae-to-Biofuels Update

SCOTTSDALE, AZ, Jul 31 (MARKET WIRE) --
PetroSun, Inc. (PINKSHEETS: PSUD) announced today the following updates
for its algae-to-biofuels division.

Australian Operations

The Letter of Intent between the PetroSun and Icon Energy was recently
terminated by mutual consent. The companies are negotiating a new
agreement that would create a joint venture between the parties for the
development of an algae-to-biofuels commercial farm system in Queensland,
Australia.

PetroSun is also engaged in negotiations to establish a commercial scale
algae farm system in New South Wales, Australia. The company will produce
algae and extract the algal oil as a biofuel feedstock. A local refiner
will process the algal oil into biodiesel for the regional marketplace.

Southwest USA Operations

The Board of Directors has approved plans to install a pilot plant
designed for algae production at an Arizona wastewater treatment
facility. This project will be a scaled down version of a commercial
algae farm system utilizing the wastewater and associated nutrients from
the municipal treatment plant to produce algae as a biofuel feedstock.
This operation will become a model for other PetroSun wastewater based
algae farm systems in the United States and foreign markets.

The Company anticipates commencement of operations to occur within 30 days
of receipt of the final approvals and permits from the local municipality
and state regulatory agencies.

About PetroSun

PetroSun's operations include oil and gas exploration, development,
production, oilfield tubular sales and algae-to-algal oil alternative
biofuel production. The oil and gas division is focused on the exploration
of the Holbrook Basin of Arizona, the San Juan Basin of New Mexico,
Australian based prospects and the development of oil and gas reserves in
Louisiana. PetroSun Oilfield, a wholly owned subsidiary, is engaged in the
importing of tubing and casing from China for marketing and distribution
within the US market. The alternative fuels division has entered the
commercial stage of its algae-to-biofuels production technology. The
Company plans to establish algae farms and algal oil extraction plants in
Louisiana, Texas, Arizona, Mexico and Central America during 2008. The
algal oil product will be marketed as feedstock to existing biodiesel
refiners and planned company owned refineries. PetroSun is headquartered
in Scottsdale, Arizona, with field offices in Shreveport, Louisiana, and
Rio Hondo, Texas. For more information about PetroSun visit the company's
website at www.petrosuninc.com.

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.

Contact:
Investor Relations
Osprey Partners
732-292-0982

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