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PURE ENERGY ANNOUNCES
R&D AGREEMENT WITH
TENNESSEE VALLEY AUTHORITY

For Immediate Release

New York, NY -- (October 03, 1997) -- Pure Energy Corporation announced today that it signed a five year research and development services agreement with the Tennessee Valley Authority (TVA). Under the R&D agreement, TVA will assist Pure Energy Corporation in developing chemical and biological conversion systems to produce fuel and chemicals from virgin and waste paper, agricultural waste and wood waste (cellulosic biomass).

Pure Energy's fuel is a unique blend of ethanol, natural gas liquids and a co-solvent. Both ethanol and the co-solvent are expected to be derived from a renewable resource, cellulosic biomass. The fuel is non-petroleum and as much as 70 percent renewable.

The agreement covers fuels newly developed by Pure Energy and fuel formulations it is commercializing under the terms of its exclusive license granted by Princeton University. Discussions between the two companies began with the exchange of confidentiality agreements in June 1997.

Pure Energy CEO Merrick Andlinger said that the scope of work to be undertaken in conjunction with TVA, which operates one of the nation's most respected research laboratories at its Environmental Research Center, complements the pilot plant project PEC is undertaking with Arkenol, Inc. in Orange, CA.

"We are confident that today's agreement with TVA, will provide Pure Energy with a great deal of flexibility in developing production systems, feedstocks and chemical products," said Andlinger.

He noted that the work will be performed at TVA's laboratory and 20,000 square foot pilot plant facility in Muscle Shoals, AL and is expected to be supported by recognized experts from leading national research universities, as well as from other national laboratories and commercial technology development centers.

The Tennessee Valley Authority provides economical solutions to unique complex environmental problems facing business and industry in the Tennessee Valley, the nation, and the international community. TVA has been involved in the development of fuels from cellulosic biomass for more than 20 years.

Pure Energy, with offices in New York and California, is involved in the formulation and production of alternative and bio-based fuels. It has the exclusive worldwide license from Princeton University to commercialize a cleaner burning alternative fuel developed at Princeton. In May, the US Patent Office allowed claims covering the fuel.

For more information contact:
Merrick G. Andlinger
President and CEO
Pure Energy Corporation
(212) 938-6923

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