Petrosearch Energy Acquires the Quinduno Field in Texas

Anadarko Basin, Roberts County Texas
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Petrosearch Energy Corporation has entered an agreement to purchase a 100% working interest in 1780 acres of leases in the Quinduno Field located in Roberts County, Texas in the Anadarko Basin from Quinduno Energy, L.L.C. Closing is scheduled for November 15, 2005.

The independent engineering firm of Ryder Scott Company has estimated the property's proved reserves to be 2.59 million barrels of oil (MMbo) and 1.4 billion cubic feet (Bcf) of natural gas. In accordance with SEC guidelines, using flat prices as of September 30, 2005 of $66.23 per barrel of oil and $14.32 per Mcf gas (after adjustment), estimated Future Net Revenues (FNR) after capital expenditures for development from proved reserves is $101.7 million and the FNR discounted at 10% or Present Value (PV-10) is $45.5 million. These proved reserves will be extracted using conventional waterflood technology. Ryder Scott has estimated additional probable and possible reserves could be recovered in part as a result of deeper penetration of the target waterflood formation, the Lower Albany Dolomite. Using the same pricing as used for the proved reserve estimate, probable undeveloped reserves are estimated to be 4.35 MMbo and 2.2 Bcf of gas with FNR of $222.4 million and a PV-10 of $68.0 million. Similarly, possible undeveloped reserves are estimated to be 3.99 MMbo and 2.0 Bcf of gas with FNR of $184.7 million and a PV-10 of $65.0 million. Petrosearch intends to initiate the waterflood project within the next 6 months. Exploration potential above and below the Lower Albany Dolomite has been identified and will be tested in due course.

    Pricing sensitivity is as follows:

                                 PV-10 ($ million)
                             Proved  Probable  Possible
     SEC Prices               45.5     68.0      65.0
     Nymex Strip*             33.2     60.6      57.6
     Flat Pricing**           23.2     42.9      41.8

     *  as of 11/1/2005 adjusted for local conditions
     ** $45 per barrel of oil, $6.50 per Mcf of gas adjusted for local

The agreement provides for the payment of the purchase price of cash and unregistered common shares to be paid out in phases as the water flood program progresses. Should the project not proceed past the first phase, Petrosearch's maximum obligation would be $750,000 in addition to 1 million unregistered common shares plus the cost of capital expenditures for the first phase estimated at $2.9 million. Assuming the entire project is completed, the total consideration paid to the seller will be $2,000,000 cash and the issuance of 3,000,000 unregistered common shares. Upon completion of the entire project, the seller will back in for a 10% working interest after Petrosearch has been repaid all capital expenditure costs plus $9.5 million ($2,000,000 cash purchase price plus issuance of 3,000,000 unregistered common shares).

Based upon the (i) outstanding common shares and dilutive warrants as of September 30, 2005 and (ii) assumed payment of $2,000,000 in cash and issuance of 3,000,000 shares relative to this transaction, the increase in estimated SEC PV-10 for proved reserves from this acquisition is $1.37 per share.

Richard Dole, Chairman and CEO of Petrosearch stated, "This acquisition marks yet another important step forward for our program of building both existing fundamental net asset value for our shareholders as well as securing an imbedded portfolio of potentially high yield opportunities for growth through the drill bit, as we continue to access our pipeline of opportunity flow. This transaction and its design continue to validate our business model of creatively placing our project partners at risk alongside our existing shareholders, in this case by a staging of compensation, the use of our stock at its underlying net asset value and a back end participation for the partner."

Mark Harrington, President and CEO of privately held Quinduno Energy stated, "In our efforts to seek the highest and best form to maximize our value on this important resource base, we were singularly impressed by Petrosearch. A highly competent management team, a well thought out execution model, an extraordinarily impressive portfolio of existing projects, and a prudent capital structure to create earning momentum for all shareholders, made this alternative a standout for our group. We look forward to seeing Petrosearch build fundamental value for ourselves and all the existing shareholders through rapidly and cost efficiently developing our property and through continued execution of their unique business model."


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