BPG Bpi Energy Holdings,

BPI Energy Holdings, Inc. (AMEX: BPG), an independent energy company engaged in the exploration, production and commercial sale of coalbed methane (CBM) in the Illinois Basin, today announced financial and operating results for the third-quarter and nine-month periods ended April 30, 2008. During the fiscal 2008 third quarter, net gas sales volume increased 32 percent to 63.9 million cubic feet (MMcf) from 48.6 MMcf in the fiscal 2007 third quarter. For the first nine months of fiscal 2008, net gas sales were 185.2 MMcf�an increase of 35 percent from 137.4 MMcf in the first nine months of fiscal 2007. The average gas price per thousand cubic feet (Mcf) for the quarter increased to $8.38 versus $6.81 a year ago. Year to date, BPI received an average of $6.97 per Mcf, versus $6.34 per Mcf for the nine-month period in 2007. Compared with the year-ago third-quarter and nine-month periods, 2008 revenues from gas sales rose 60 percent and 47 percent, respectively, due primarily to the higher sales volume and average realized prices. Third-quarter revenue was $535,000, up from $335,000, and nine-month revenue was $1.3 million, up from $876,000, versus fiscal 2007. General and administrative expenses for the 2008 third quarter and nine-months were $1.3 million and $4.7 million, respectively�down 34 percent and 24 percent, respectively, from the comparable periods in 2007. The decline for both periods reflected sharply decreased salaries and benefits. For the quarter, salaries and benefits were 71 percent lower, and for the nine-months, were down by nearly half. The company�s net loss was $2.5 million, or $0.04 per share, for the quarter, compared with the 2007 third-quarter net loss of $2.1 million, or $0.03 per share. The net loss for the nine-months narrowed modestly to $6.1 million, or $0.09 per share, from 2007�s net loss of $6.6 million, or $0.09 per share. The net loss for the quarter and nine-months of fiscal 2008 included a non-cash charge of $.3 million to reflect the decline in value of the company�s commodity derivatives contract. Project Update Commenting on the company�s operations, BPI Energy�s President and Chief Executive Officer James G. Azlein said: �We did not drill any new wells during the quarter and have focused on addressing financing requirements and aggressively reducing costs. Earlier this month, we locked in higher gas prices by exchanging our price collar, which was to expire in July 2009, for a fixed-price swap of $10.26 per MMBtu for the notional amount of 20,000 MMBtu per month starting in July 2008 and extending through July 2010. All gas that we produce and sell in excess of this notional amount will be at the then prevailing prices.� Operating data for the fiscal 2008 third-quarter and nine-month periods ended April 30, 2008, are summarized below: Selected Financial and Operating Data � Three Months Ended 4/30/2008 � 4/30/2007 � Net Gas Sales (Mcf) 63,897 48,558 � Average Selling Price ($/Mcf), net $8.38 $6.81 � Nine Months Ended 4/30/2008 4/30/2007 � Net Gas Sales (Mcf) 185,210 137,400 � Average Selling Price ($/Mcf), net $6.97 $6.34 � At 4/30/2008 At 7/31/2007 � Cumulative Wells Drilled 206 170 � Wells Producing and Selling Gas1 126 91 � Acreage in Production < 2% < 2% � Total Acreage 531,000 512,000 1All producing wells are located at BPI Energy�s Southern Illinois Basin Project. Although the company continues to evaluate what options may be available to finance current and future operations, as well as explore additional potential funding sources, to date, it has not yet obtained additional funding. BPI has explored, and continues to explore, sources including the issuance of new debt and/or equity securities, joint ventures, mergers/combinations, asset sales and selling rights relating to the company�s litigation against affiliates of Drummond Coal Co. The company currently has a request pending with its current lender, GasRock Capital LLC (�GasRock�), to fund its cash shortfall through the end of fiscal year 2008 along with a request for capital development funds for new development activities. GasRock has sole discretion over all future advances under the GasRock Credit Agreement. Additionally, BPI continues to engage in discussions with a company that may provide additional development funds to expand the company�s Southern Illinois Basin Project. However, BPI does not believe such funds, if obtained, would provide any significant reimbursement for general and administrative expenses. BPI can provide no assurance that it will be successful in completing a financing transaction. BPI is filing its Form 10-Q for the interim period with the Securities and Exchange Commission today, Monday, June 16, 2008. Please refer to the Form 10-Q, which can be found on the company�s website, for additional information on BPI Energy and its interim results. To be added to BPI Energy�s e-mail distribution list, please click on the link below: http://www.clearperspectivegroup.com/clearsite/bpi/emailoptin.html About BPI Energy BPI Energy (BPI) is an independent energy company engaged in the exploration, production and commercial sale of coalbed methane (CBM) in the Illinois Basin, which covers approximately 60,000 square miles in Illinois, southwestern Indiana and northwestern Kentucky. The company controls a large CBM acreage position in the Illinois Basin at approximately 531,000 acres. News releases and other information on the company are available on the Internet at: http://www.bpi-energy.com Some of the statements contained in this report that are not historical facts, including statements containing the words �believes,� �anticipates,� �expects,� �intends,� �plans,� �should,� �may,� �might,� �continue� and �estimate� and similar words, constitute forward-looking statements under the federal securities laws. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, or the conditions in our industry, on our properties or in the Basin, to be materially different from any future results, performance, achievements or conditions expressed or implied by such forward-looking statements. Some of the factors that could cause actual results or conditions to differ materially from our expectations, include, but are not limited to: (a) our inability to raise the funds necessary to satisfy our existing accounts payable and accrued liabilities; (b) a refusal by GasRock Capital LLC (�GasRock�) to make any additional advances under the GasRock Credit Agreement, which are at GasRock�s discretion; (c) our inability to repay or refinance the amounts advanced to us by GasRock when such amounts become due on January 30, 2009; (d) a breach by us of a covenant under the GasRock Credit Agreement or other event of default that allows GasRock to accelerate our outstanding obligations; (e) our inability to obtain sufficient financing, close an offering of debt or equity securities, or complete a merger/combination, joint venture, asset sale, selling of rights relating to our litigation against Drummond or other transaction that would enable us to fund our future operations; (f) our failure to accurately forecast CBM production; (g) a decline in the prices that we receive for our CBM production; (h) our failure to accurately forecast operating and capital expenditures and capital needs due to rising costs or different drilling or production conditions in the field; (i) our inability to attract or retain qualified personnel with the requisite CBM or other experience; (j) unexpected economic and market conditions, in the general economy or the market for natural gas; (k) limitations imposed on us by the GasRock Credit Agreement; and (l) potential exposure to losses caused by our derivative contract. We caution readers not to place undue reliance on these forward-looking statements. �Financial Tables Follow� BPI Energy Holdings, Inc. Consolidated Statements of Operations (Dollars in thousands, except per-share data) (Unaudited) � Three Months Ended April 30, Nine Months Ended April 30, 2008 � 2007 2008 � 2007 Revenues: Gas sales $ 535 $ 335 $ 1,292 $ 876 � Operating expenses: Lease operating expense 403 412 1,038 1,276 General and administrative expenses 1,250 1,885 4,654 6,089 Lease rentals and other operating expense 168 - 247 - Depreciation, depletion and amortization 204 � 215 � 552 � 591 � Total operating expenses 2,025 2,512 6,491 7,956 � Operating loss (1,490 ) (2,177 ) (5,199 ) (7,080 ) � Other income (expense): Interest income 10 109 141 494 Interest expense (735 ) (1 ) (767 ) (8 ) Other expense, net (323 ) - � (304 ) - � (1,048 ) 108 � (930 ) 486 � � Net loss $ (2,538 ) $ (2,069 ) $ (6,129 ) $ (6,594 ) � Basic and diluted net loss per share ($0.04 ) ($0.03 ) ($0.09 ) ($0.09 ) � Weighted average common shares outstanding 71,721,318 70,036,326 70,774,984 69,642,804 BPI Energy Holdings, Inc. Consolidated Balance Sheets (Dollars in thousands) � April 30, 2008 July 31, 2007 (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 1,081 $ 11,292 Accounts receivable 145 94 Other current assets 979 � 1,348 � Total current assets 2,205 12,734 Property and equipment, at cost: Gas properties, full cost method of accounting: Proved, net of accumulated depreciation, depletion, amortization and impairment of $12,955 and $12,621 32,535 16,631 Unproved, excluded from amortization - 8,533 Support equipment, net of accumulated depreciation and amortization of $809 and $741 352 � 552 � Net gas properties 32,887 25,716 Other property and equipment, net of accumulated depreciation and amortization of $244 and $152 428 � 473 � Net property and equipment 33,315 26,189 Restricted cash 100 100 Other non-current assets - � 220 � Total assets $ 35,620 � $ 39,243 � LIABILITIES AND SHAREHOLDERS� EQUITY Current Liabilities: Accounts payable $ 880 $ 1,371 Current maturities of long-term debt and notes payable 11,434 8,488 Accrued liabilities and other 667 � 1,503 � Total current liabilities 12,981 11,362 Long-term debt and notes payable, less current maturities 35 48 Asset retirement obligation 161 114 Other long-term liabilities 40 � - � Total liabilities 13,217 11,524 Shareholders� Equity: Common shares, no par value, authorized 200,000,000 shares, 73,484,395 and 72,524,493 issued and outstanding 67,946 67,946 Additional paid-in capital 8,421 7,608 Accumulated deficit (53,964 ) (47,835 ) Total shareholders� equity 22,403 � 27,719 � Total liabilities and shareholders� equity $ 35,620 � $ 39,243 �