Particle Drilling Technologies, Inc. (PDTI) : Houston, Texas : Particle Impact Drilling (PID)

Houston – August 7, 2008 – Particle Drilling Technologies, Inc. (NASDAQ: PDRT) (the "Company") today announced its financial results for the quarter ended June 30, 2008.

"Earlier this week, we were contacted by our current customer and informed that they would like to shift the next field trial from the Deep Bossier area, which had previously been scheduled to commence in August 2008, to the Haynesville area in Northwest Louisiana. Although we are excited about the opportunity to test the particle impact drilling ("PID") system in the Haynesville area, the customer is drilling with a larger drill bit in this area and thus a new bit would have to be designed and manufactured to meet this application. The reasons for this change have not been fully vetted given the short time frame between receiving this information and release of the Company’s quarterly results." commented Jim B. Terry, President and CEO of Particle Drilling Technologies. "We have made a rig visit to this new area and are very pleased with the rig selections. We are currently in discussion with our customer about ways to expedite the next field trial, including requesting that the customer allow us to continue to conduct the next field trial in the Deep Bossier area as originally planned. Should this discussion not get resolved soon, we are currently in active discussions with another potential customer about field trial opportunities in another location."

"During the last several months, we have worked hard to prepare our system for the next field trial in the Deep Bossier.” added Mr. Terry. “While we are disappointed with the sudden and unexpected proposed change in area, we are at the mercy of our customer’s drilling schedule and location preferences as previously stated. We believe that the fact that our customer is interested in running our technology in one of the more exciting drilling plays in the country is a positive, but given that we currently don’t have the correct bit for that application, we will need to defer that opportunity to the future. In the meantime, we are actively working with our customer to revert back to the original drilling rig in the Bossier area which should be nearing the target formation in the next week or so. At this point in time, that discussion is ongoing. "

Particle Drilling Technologies’ financial results reflect its status as a development stage company during the third 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. The following is a summary of the quarterly results:

The Company will hold a conference call at 11:00 a.m., Eastern Time, on Friday August 8, 2008, to discuss its quarterly results and to provide a further operational update. To participate in the call, dial 303-262-2055 and ask for the Particle Drilling call at least 10 minutes prior to the start time, or access it live over the Internet by logging onto the web at www.particledrilling.com, on the "Investor Relations" section of the Company’s website. To listen to the live call on the web, please visit the web site at least fifteen minutes prior to the call to register, download and install any necessary audio software.

If you cannot listen to the live webcast, an archive will be available shortly after the call for a period of 90 days on the "Investor Relations" section of the Company’s website. A telephonic replay of the conference call will be available through August 22, 2008 and may be accessed by calling 303-590-3000 and using the pass code 11117708.

Particle Drilling Technologies, Inc., headquartered in Houston, Texas, is a development-stage oilfield service and technology company owning several patents and pending patents related to its 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 capital, if necessary, and its ability to obtain financing on acceptable terms, if at all, a worldwide downturn in the energy services sector, working capital constraints and other risks described in PDTI’s filings with the SEC. 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.

    Contacts:  J. Chris Boswell, SVP & CFO

               Particle Drilling Technologies, Inc.

               713-223-3031

               Jack Lascar / Sheila Stuewe

               DRG&E / 713-529-6600

                             - tables to follow -

                     PARTICLE DRILLING TECHNOLOGIES, INC.

                       (a development stage enterprise)

                    CONSOLIDATED STATEMENTS OF OPERATIONS

                                Three Months Ended         Nine Months Ended

                                     June 30,                 June 30,

                                2008         2007         2008         2007

                            (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited)

    Revenues                     $ -          $ -          $ -          $ -

    Operating expenses:

      Research and

       development           1,373,262    1,289,785    4,700,274    4,994,944

      General and

       administrative        1,281,100    1,180,854    4,195,064    3,961,005

      Impairment of asset          -            -            -            -

      Gain on sale of assets  (114,748)         -       (756,469)         -

        Total operating

         expenses            2,539,614    2,470,639    8,138,869    8,955,949

        Loss from

         operations         (2,539,614)  (2,470,639)  (8,138,869)  (8,955,949)

    Other income (expenses)

      Interest income           21,933       81,034       69,440      322,766

      Interest expense            (908)        (562)      (4,770)      (5,244)

        Total other income

         (expenses)             21,025       80,472       64,670      317,522

        Net loss           $(2,518,589) $(2,390,167) $(8,074,199) $(8,638,427)

    Net loss per common

     share, basic and

     diluted                    $(0.07)      $(0.08)      $(0.25)      $(0.29)

    Weighted average number

     of common shares

     outstanding, basic and

     diluted                33,859,053   30,669,301   31,792,851   29,934,127

                     PARTICLE DRILLING TECHNOLOGIES, INC.

                       (a development stage enterprise)

                         CONSOLIDATED BALANCE SHEETS

                                                      June 30,   September 30,

                                                       2008          2007

                                                    (Unaudited)     Audited

                   ASSETS

    Current assets:

      Cash and cash equivalents                     $4,562,386     $4,461,929

      Assets held for sale                                 -          900,000

      Prepaid expenses                                 101,627        233,174

        Total current assets                         4,664,013      5,595,103

    Property, plant & equipment, net                 1,313,850        867,168

    Intangibles, net                                 1,437,482      1,312,246

    Other assets                                        41,144         52,562

        Total assets                                $7,456,489     $7,827,079

            LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:

      Accounts payable                                $874,816     $1,028,999

      Short-term notes payable                             -           88,258

      Current portion of long-term debt                 13,205         13,511

      Accrued liabilities                              854,251        134,988

        Total current liabilities                    1,742,272      1,265,756

    Long-term debt                                      14,478         24,537

    Deferred Rent                                      127,033         45,539

    Stockholders' equity:

      Common stock, $.001 par value, 100,000,000

       shares authorized, 38,767,018 shares issued

       and 35,763,932 shares outstanding at

       June 30, 2008, and 34,632,987 shares issued

       and 31,629,901 shares outstanding at

       September 30, 2007                               38,768         34,634

      Additional paid-in capital                    45,662,012     38,510,488

      Treasury stock at cost, 3,003,086 shares      (1,511,817)    (1,511,817)

      Deficit accumulated during the

       development stage                           (38,616,257)   (30,542,058)

        Total stockholders' equity                   5,572,706      6,491,247

        Total liabilities and stockholders' equity  $7,456,489     $7,827,079

                     PARTICLE DRILLING TECHNOLOGIES, INC.

                       (a development stage enterprise)

                    CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                         Nine Months Ended

                                                             June 30,

                                                         2008         2007

                                                     (Unaudited)   (Unaudited)

    Cash flows from operating activities:

      Net loss                                       $(8,074,199) $(6,248,260)

      Adjustments to reconcile net loss to

       net cash used in operating activities:

          Gain on sale of assets                        (756,469)         -

          Depreciation and amortization expense          433,364      362,503

          Stock-based employee compensation            2,045,947    1,251,144

      Changes in operating assets and liabilities:

          Decrease in note receivable                        -        385,839

          Decrease in prepaid expenses                   131,547       68,821

          Increase (Decrease) in accounts payable       (154,183)     625,720

          Increase in accrued liabilities                719,263       22,802

          Decrease in other assets                        11,418          -

          Increase in other liabilities                   81,494          -

            Net cash used in operating activities     (5,561,818)  (3,531,431)

    Cash flows from investing activities:

      Payments to purchase property and equipment        (37,332)  (1,225,524)

      Proceeds from sale of property and equipment       851,617          -

      Payments to purchase intangibles                  (163,099)     (63,076)

            Net cash provided by (used in) investing

             activities                                  651,186   (1,288,600)

    Cash flows from financing activities:

      Proceeds from issuance of common stock           5,109,712   10,716,951

      Repayments of notes payable                        (98,623)    (163,594)

            Net cash provided by (used in) financing

             activities                                5,011,089   10,553,357

    Net increase (decrease) in cash and cash

     equivalents                                         100,457    5,733,326

    Cash and cash equivalents - beginning of period    4,461,929    2,291,586

    Cash and cash equivalents - end of period         $4,562,386   $8,024,912

PARTICLE DRILLING TECHNOLOGIES ANNOUNCES UPDATE ON FIELD TRIAL AND FISCAL 2008 THIRD QUARTER RESULTS