Prometheus uses credit line

RNS Number:1341V
Prometheus Energy Co
19 April 2007



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO
THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, THE REPUBLIC OF IRELAND, THE
REPUBLIC OF SOUTH AFRICA OR JAPAN.

Neither this announcement nor any copy of it may be taken, transmitted or
distributed, directly or indirectly, in or into the United States, Canada,
Australia, the Republic of Ireland, the Republic of South Africa or Japan. Any
failure to comply with this restriction may constitute a violation of United
States, Canadian, Australian, Republic of South Africa, Republic of Ireland or
Japanese securities laws.


19 April 2007



           Prometheus Energy Company ("Prometheus" or the "Company")
                           Related Party Transaction

            Prometheus Draws down $2.5million on Sowood Credit Line
              to Support Working Capital and Business Development


The Board of Prometheus, the alternative and renewable energy company, announces
today that the Company has drawn on its line of credit provided by PEC III
Holdings LLC, a subsidiary of Sowood Commodity Partners Fund III LP ("Sowood").
The line of credit agreement, entered into on March 23, 2006, provides for up to
$25,000,000 in credit upon the Company meeting certain funding conditions and
bears interest at LIBOR plus 8.0%. The line of credit agreement was amended as
of April 10, 2007 to provide a commitment from Sowood to provide up to an
aggregate $7,500,000 in credit, without regard to a majority of the previously
agreed funding conditions. A third of this sum has been drawn down with
immediate effect, with the remaining commitment available for future drawing.
With respect to the line of credit, the Company and Sowood have also agreed, in
an improvement of terms, to fix the previously agreed conversion formula such
that Sowood may convert unpaid principal outstanding under the line of credit
into shares of the Company's common stock at a price of $0.80 (approximately
#0.40) per share. The Company has the right to prepay any amount drawn under the
line of credit at any time upon 30-days' notice to Sowood subject only to an
obligation to issue a stock purchase warrant to Sowood in the event of
prepayment prior to a significant public offering of the Company's common
shares.

In addition, the Company and El Cap I, LLC have amended an existing loan
agreement pursuant to which the Company is indebted to Sowood in the principal
amount of $6,000,000. Under the terms of the amendment, El Cap I, LLC has agreed
to defer the accrual of interest under the note until July 1, 2007, with
interest accruing at a rate of LIBOR plus 10.5% and to defer the payment of
principal and interest until September 30, 2007. In consideration for these
deferrals, the Company has agreed to extend the exercise period of each of two
currently outstanding stock purchase warrants held by El Cap I, LLC, for an
additional two years, from February 1, 2008 to February 1, 2010.

Kirt Montague, Prometheus' Chief Executive Officer, said: "We have been working
hard to develop the opportunities that exist for Prometheus, hiring new senior
executives, developing new commercial opportunities and making progress in the
development in the world's first landfill gas-to-LNG plant in Orange County,
California. We have three further projects under way, two in California and one
in Poland. We are in process of engaging a firm to manufacture the equipment for
these projects and the funds from Sowood will play an important role in
advancing all these developments in supporting the company's working capital
needs"

PEC III Holdings LLC and El Cap I, LLC (a subsidiary of Sowood Commodity
Partners Fund LP), hold in the aggregate 23,571,420 common shares representing
39.49 per cent of the Company's issued share capital. This is, therefore,
considered a related party transaction under the AIM Rules.

The Directors (excluding Stuart Porter who is a Member of the General Partner of
Sowood Commodity Partners Fund III LP and Sowood Commodity Partners Fund LP),
having consulted with Jefferies International Limited, the Company's nominated
adviser, consider the terms of the transaction to be fair and reasonable insofar
as the Company's shareholders are concerned.


For further information, please contact:


Prometheus Energy Company                               +1 206 267 0800

Kirt Montague (Chief Executive Officer)
Jeff Spencer (Chief Financial Officer)


Jefferies International Limited                         +44 20 7618 3676

Charles Cameron
Oliver Griffiths


Cubitt Consulting                                       +44 20 7367 5100

Simon Brocklebank- Fowler
Michael Henman
Allison Reid


This press release does not constitute an offer for the sale of securities in
the United States. Prometheus' securities are restricted under US securities
laws and may not be offered or sold in the United States absent a registration
statement or a valid exemption from registration.



Notes to Editors

Prometheus Energy Company is a public corporation with its shares traded on the
London Stock Exchange's AIM market. It is headquartered in Seattle, Washington.
Prometheus is a global alternative and renewable fuel company, specialising in
the production, distribution, and sale of liquid natural gas (LNG) from low-cost
waste and stranded sources of methane. The Company is an emerging leader in
distributed fuel production, integrating small-scale purification and
liquefaction systems that generate fuel near the end-user. For more information
concerning Prometheus please contact us at +1 206 267-0800 or at
Info@Prometheus-Energy.com

Jefferies International Limited, which is authorised and regulated by the
Financial Services Authority, is acting for the Company and no other person in
connection with the Placing and will not be responsible to anyone other than the
Company for providing the protections afforded to customers of Jefferies
International Limited nor for advising any other person on the contents of this
announcement or any matters described in this announcement.



                      This information is provided by RNS
            The company news service from the London Stock Exchange

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