Announces First Customer Order for 30,000 Bbl/Day Sonocracking(TM) Unit

HOUSTON, Feb. 11 /PRNewswire-FirstCall/ -- SulphCo, Inc. ("Company") SUF announced today that it has signed an agreement with Pt. Isis Megah ("Isis"), an Indonesian oil and gas services company, which grants Isis an exclusive distributorship in the sales territories of India, Malaysia, Singapore and Indonesia ("Sales Territories). The Company also announced its first customer order, procured through Isis, for Sonocracking(TM) units ("Units") with at least thirty thousand barrels per day of processing capacity, which will be shipped at the Company's expense from Fujairah to a port located within the Sales Territories. Isis has agreed to pay all entry costs and duties, the cost of transporting the Units from the port of entry to the customer's refinery and all costs associated with the installation of the Units. SulphCo will provide advisory personnel and on-site project management to insure proper installation, start-up and commissioning of the Units.

Subject to execution of a mutually acceptable operating agreement, the parties have preliminarily agreed to the following material terms and conditions: i) SulphCo shall receive a processing fee for each barrel of installed processing capacity of the Units, ii) the processing fee shall be adjusted annually, based on benchmark performance targets, iii) the customer shall be responsible for all operating and maintenance expenses (including parts replacement), iv) title to the Units shall remain with SulphCo, v) the operating agreement shall have a five year term, vi) payment of processing fees will commence seven days after satisfactory performance tests and vii) installation costs will be reimbursed by SulphCo out of operating revenues. Isis and the customer are prohibited from operating the Units prior to the execution of an operating agreement.

"I am delighted to report that our first customer order meets the important criteria that we discussed in the November conference call," said Dr. Larry Ryan, CEO of SulphCo. "First, the net processing fees are entirely consistent with revenue projections we disclosed in our business model. Second, and of equal importance, the feed oil to be processed is an un-cracked distillation stream having a high sulphur content, and is therefore an excellent candidate to benefit from our technology. Also, Isis Megah and the ultimate customer offer superb growth potential for SulphCo with few site location challenges."

Brian Savino, President of SulphCo, noted that "the thirty thousand barrel per day Sonocracking(R)(TM) unit covered by this first customer order is in the process of being repositioned from our facility in Fujairah to a location within the Sales Territories, along with two additional units having sixty thousand barrels per day of processing capacity. This is being done with the full consent and approval of our Fujairah joint venture partner, in recognition of the strategic importance of this immediate opportunity to both validate our technology and generate revenue streams consistent with our business model." Savino added, "We are presently engaged in late stage discussions with Isis regarding a second thirty thousand barrel per day customer order. The reallocation of these assets will position the Company to strategically respond to future growth opportunities in the region."

Should the parties for any reason fail to execute an operating agreement, the Units shall be returned to SulphCo at Isis' expense and the customer order shall be canceled. In addition, after commissioning and completion of trial runs, there is a risk that the Units may fail to achieve performance targets to be established in the operating agreement, which may also result in cancellation of the customer order.

About Pt. Isis Megah  

Pt. Isis Megah is an oil and gas services company serving the needs of the energy industry in Indonesia since 1991. The company provides blow out preventers, heat exchangers, pumps, rigs, filters, and other process equipment to crude oil processing facilities and has earned a reputation in the industry for quality workmanship, dependable service and customer satisfaction. Pt. Isis Megah is committed to compliance with all applicable quality standards, health, environment, and safety -- HES Standards (national and international), laws and regulations and to adherence to the highest ethical standards in the conduct of its business.