Digital Gas, Inc.(fka DIGGQ)

[Buckey]

2006-03-07 02:07 ET - News Release



NEW YORK -- (Business Wire) -- March 7, 2006

Digital Gas, Inc. (OTC Pink Sheets:DIGG) announced today
that its oil shale technology development partner has concluded
negotiations with an operator of a major U.S. Department of Energy
laboratory for further development of the fuel cell system the two
companies will seek to commercialize. Exclusive product development
and intellectual property agreements were signed by the operator of
the laboratory.
¶ After an extensive due diligence process, in which numerous fuel
cell and other research laboratories were interviewed and considered,
our partner determined that this Department of Energy laboratory
presented the ideal mix of laboratory, scientific and engineering
expertise and was particularly impressed with the operator's
background and strengths in the areas of fuel cell development,
geothermic modeling and reservoir analysis needed to support the fuel
cell system, with initial emphasis for use in this country's vast oil
shale resources.
¶ The comprehensive Statement of Work includes detailed computer
modeling to optimize efficiencies of the system and establish design
parameters for commercialization and various stages of bench testing,
culminating in the development and demonstration of a working product
ready for "in situ" oil shale applications.
¶ Digital Gas plans to introduce its partner, as well as their
strategic partners and first major clients, in a joint press release
in several weeks announcing several new developments, including
property acquisitions, strategic alliances, major funding and a public
service information website regarding energy savings, resource
production enhancement and the environmental benefits of using the
products and technologies of Digital Gas and its partners.
¶ This fuel cell system represents a breakthrough approach for
unconventional oil recovery. The system utilizes high temperature
solid oxide fuel cells to slowly heat the oil shale formation in an
"in-situ" manner. The heat travels through the rock, pressurizing the
underground formation, lowering the viscosity of the oil in the shale,
while creating "off-gases" of high quality. Both the oil and gases are
moved into collector wells, where they are extracted by conventional
means.
¶ The compelling innovation of the system is that it is designed to
run off the gases that are derived from the heated oil shale formation
itself. By using a portion of the gases generated during the process
as its fuel, the fuel cell system thus becomes self-fueling. It also
produces electricity as a by-product. As a result, this technology
simply offers a better net energy balance than other unconventional
oil recovery methods. In addition, this is all accomplished without
the major environmental impacts associated with oil shale mining or
surface retorting alternatives.
¶ The Department of Energy laboratory and its operator have taken a
leadership role in solid oxide fuel cell development by virtue of
their substantial contributions to the Solid State Energy Conversion
Alliance (SECA) with the ultimate goal of bringing low-cost solid
oxide fuel cells to the market place. SECA is a collaborative alliance
between several major federal labs, U.S. industry, universities and
other research organizations.
¶ The uniqueness of this fuel cell system is that it utilizes solid
oxide fuel cell technology designed for its heat, with the electricity
being a by-product. Unlike all other fuel cell applications, where the
heat is considered "waste" that must be mitigated or managed, this
approach embraces the heat. Nearly every BTU of energy that goes into
the fuel cell system comes out as either heat or electricity, both of
which can be put to immediate use. The end products -- shale oil,
natural gas and electricity -- can all be used on site or sold into
national energy markets. Nothing goes to waste.
¶ Digital Gas encourages those with interests in oil shale
development - landowners, strategic parties, and prospective investors
- to contact the company to discuss possible relationships of mutual
benefit.
¶ Digital Gas is also pleased to announce that it has received a
letter commitment to provide a collateralized short-term bridge
financing followed by a structured financing for a target investment
in the quarry business, subject to due diligence. Management is in the
process of deciding where to utilize this offer.
Contacts:

Digital Gas, Inc.
Brian Smith, 732-927-4073
[e-mail]
Source: Digital Gas, Inc.