Particle Drilling Technologies (fka PDRT)

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February 6, 2008 - 5:28 PM EST

PDRT 2.00 0.17

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Particle Drilling Technologies Announces Fiscal 2008 First Quarter Results
Highlights
- Trial schedule will be announced as soon as Company completes evaluation and modification of injection system
- Company signs contract extension with existing customer
HOUSTON, Feb. 6 /PRNewswire-FirstCall/ -- Particle Drilling Technologies, Inc. (Nasdaq: PDRT) (the 'Company') today announced its financial results for the fiscal 2008 first quarter ended December 31, 2007.

During the quarter, the Company completed the engineering, design and construction of its new 'extruder' based particle injection system.

The Company is currently making modifications to the new injection system focused on increasing the speed of filling the system with particles for high volume injection rates. Thus far, the test program has demonstrated that the other components function and perform as specified for operational success. Examples of injection system accomplishments are:

1. Injection / Standpipe Interface: The process of mechanically extruding particles at desired rates into pressured mud flow has been achieved and repeated for a sufficient amount of time and under various conditions required to meet field objectives. Fundamentally, this capability is at the heart of the research and development around the injection process and is the key to entraining particles into flowing high pressure drilling fluid.

2. Pressure Barriers: The pressure barriers are cycling properly and holding the necessary pressure changes, as designed.

3. Control Systems: The previously untested automated hydraulic control system functions properly. In addition, the electronic control system which operates all components including the elevator, particle volume/rates, actuation of all valves and operation of the extruder works effectively.

During endurance testing, the Company identified one issue in particular that needs to be addressed before the system can be deemed field ready. This relates to decreasing the time required to fill the upper chamber where particles are introduced at atmospheric conditions and then pressurized before filling the lower chamber. It is necessary to decrease the 'fill time' in order to maintain high volumes of particle injection. The Company is in the process of testing and implementing solutions to address this issue. Once the Company is satisfied with the results of this test program, the Company intends to announce a field trial schedule.

'During the last several months, we have made good progress. While the new injection system requires some modifications that require additional time to implement and test, we believe that this system is the solution for injecting particles,' added Jim B. Terry, President and CEO, Particle Drilling Technologies. 'We have renewed our contract with our existing customer and are now in the process of planning for the next commercial trial. We look forward to the next commercial trial as, I believe, the stage is now set for commerciality.'

Particle Drilling Technologies' financial results reflect its status as a development stage company during the first quarter of fiscal 2008 generating no revenue. The Company has yet to generate cash flow from operations, and until revenues commence, the Company is highly dependent upon debt and equity funding. Based on the Company's current liquidity position, the Company will need to raise additional capital through debt or equity funding. Management cannot provide any assurance that any such financing will be available on acceptable terms or at all. The following is a summary of the quarterly results:


Three Months Ended December 31,
2007 2006
(Unaudited) (Unaudited)

Revenues $- $-
Gross profit - -
Loss from operations (3,259,917) (2,963,387)
Net loss (3,226,536) (2,838,461)
Net loss per share - basic and
diluted $(0.10) $(0.10)