SOURCE: PetroSun, Inc.

October 27, 2006 06:00 ET

PetroSun Secures $16 Million in Financing

PHOENIX, AZ -- (MARKET WIRE) -- October 27, 2006 -- PetroSun, Incorporated (PINKSHEETS: PSUD) announced today that the company has entered into agreements with Golden Gate Investors, Incorporated to provide $16,000,000 of financing to the Company through convertible debentures and warrants. The funds will be utilized for exploration, development, alternative energy projects and strategic acquisitions.

The terms of the initial $5,000,000 two-year convertible debenture provide for a conversion price of the lesser of $2.00 per share of PetroSun common stock or 80% of the three lowest volume weighted average prices during the prior twenty trading days prior to holders election to convert. This debenture provides for an interest rate of 7 3/4%.

The second transaction consists of a four-year 4 3/4% convertible debenture and warrants of $11,000,000 that provide a conversion price of the lesser of $3.00 per share of PetroSun common stock or 80% of the three lowest volume weighted average prices during the twenty trading days prior to the holders election to convert.

"PetroSun has been successful to date in securing exploration and development projects, oilfield services, alternative energy technologies and personnel," said Rayfield Wright, President of PetroSun. "Golden Gate's investment is a strong vote of confidence in PetroSun's ability to expand our core business and supports our strategic drive to become a global leader in the development of both traditional and renewable energy resources. This financing transaction will allow us to implement an aggressive campaign to successfully utilize our assets in the marketplace."

About PetroSun

PetroSun's current operations are concentrated in the Ark-La-Tex region with plans to expand into New Mexico, Arizona, Utah and Australia in 2006. PetroSun provides a comprehensive array of products and services to the oil industry. Algae BioFuels, a wholly owned subsidiary of PetroSun, is an emerging producer of biodiesel derived from the cultivation of algae. The Company's cutting edge technologies, combined with a proven ability to apply them effectively and safely within a disciplined ROI framework, creates long term value for PetroSun shareholders and partners. PetroSun is headquartered in Phoenix, Arizona. For more information about PetroSun visit the company's website at

Except historical matter contained herein, matters discussed in this news release are forward-looking statements and are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect assumptions and involve risks and uncertainties, which may affect the Company's business and prospects and cause actual results to differ materially from these forward-looking statements.

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