Particle Drilling Technologies Provides Operational Update

HOUSTON, July 18 /PRNewswire-FirstCall/ -- Particle Drilling Technologies, Inc. (Nasdaq: PDRT; "PDTI" or "Company") is today providing an operational update along with anticipated timing for its next commercial trial.

Jim Terry, PDTI's President and Chief Executive Officer stated, "During our first trial, we demonstrated to the industry that the particle impact drilling (PID) system is capable of generating outstanding penetration rates. The most important achievements realized on the first trial revolved around the downhole performance of the PID bit, the ability to circulate steel particles in and out of a 10,000+ foot well and the opportunity to further develop operational practices with the system. Also, we learned how to deal with a complete pump shut down resulting in a heavy accumulation of steel particles at the bottom of the well and confirmed such an event is not damaging to the well. We remain very excited about the potential of this technology and look forward to a substantial improvement in drilling performance during this upcoming trial."

Second Commercial Trial: PDTI anticipates it will mobilize the PID system to the Uinta Basin area of northeast Utah to begin preparations for the next commercial trial during the next three to four weeks. As previously communicated, the Company's timing for the next commercial trial is completely dependent on the operator's drilling schedule.

The next commercial trial will be conducted in the area of the field known for the slowest penetration rates and longest drilling times. We anticipate drilling through an interval that is very similar to the interval drilled during the first trial. The rate of penetration ("ROP") for conventional drilling in this interval generally averages below 6 feet per hour and several bits are normally consumed. The PID system succeeded in drilling at substantially faster ROP rates during the first trial ranging 3 to over 6 times faster than the conventional bits used in this area. On the first commercial trial, the amount of time engaged with the formation was limited due to drilling rig integration issues and inadequate performance of the particle recovery unit. The Company believes that the drilling rig integration issues were largely identified and resolved during the first trial. The particle recovery unit has now been replaced with a much simpler system, as more fully described below. The Company expects the new recovery system will substantially reduce downtime going forward.

Enhancements to the PID System and Operational Update: PDTI has developed and tested its new particle recovery system, which is an open system that allows the particles to flow across the shale shaker in the same manner as the formation cuttings. As the particles and cuttings flow from the shale shaker to the mud pit, the new recovery system will intervene and separate the steel particles from the non-metallic cuttings so that the particles can be captured and re-injected. This new system relies on an industrial rotating magnetic drum and conveyor to separate and collect the particles. This device has been thoroughly tested at the Company's research facility in Houston, Texas.

Additionally, over the past six months the Company has designed, engineered and began assembling a new proto-type particle injection system, along with other conceptual designs which will be further tested and evaluated over the next few months. Each of the new injector concepts are unique and have been designed to increase system reliability and broaden the application of the PID technology to a greater number of existing drilling rigs while reducing operating cost, footprint, manpower, maintenance and capital cost. Once the appropriate injector device is selected, the Company expects to begin the manufacture of several of such devices in order begin scaling the business. Until then, the Company intends to continue using the proven frac pump driven injector system, which performed adequately on the first commercial trial.

Particle Drilling Technologies, Inc., headquartered in Houston, Texas, is a development stage oilfield service and technology company owning certain patents and pending patents related to the Particle Impact Drilling technology. The Company's technology is designed to enhance the rate-of- penetration function in the drilling process, particularly in hard rock drilling environments.

Certain statements in this press release that are not historical but are forward-looking are subject to known and unknown risks and uncertainties, which may cause PDTI's actual results in future periods to be materially different from any future performance that may be suggested in this press release. Such risks and uncertainties may include, but are not limited to, PDTI's ability to raise equity capital, if necessary, and its ability to obtain equity financing on acceptable terms, if at all, a severe worldwide slowdown in the energy services sector and working capital constraints. Further, PDTI is a development stage company that operates in an industry sector where securities values are highly volatile and may be influenced by economic and other factors beyond PDTI's control such as announcements by competitors and service providers.

J. Chris Boswell, SVP & CFO
Particle Drilling Technologies, Inc.
713-223-3031 ext. 2085

Ken Dennard, Managing Partner
Jack Lascar, Partner
DRG&E / 713-529-6600