Synthesis Energy Systems Ceases Development of Benwood, West Virginia Synthetic Gasoline Project Due to Current State of Credit Markets

Synthesis Energy Systems, Inc., a global industrial gasification company, today announced that due to the difficult financial environment, SES and CONSOL Energy (“CONSOL”) will cease funding of the front-end engineering design package for the Benwood, West Virginia synthetic gasoline project. With the lack of advancement of the project, the joint development agreement (“JDA”) between SES and CONSOL expired according to its terms.

“Given the current state of the U.S. credit markets, SES is proactively reevaluating domestic capital investments at this time, consistent with our commitment to restrict equity capital investment in U-GAS® projects until debt financing is secured,” commented Tim Vail, president and CEO of Synthesis Energy Systems.

Vail concluded, “The U.S. market remains a core opportunity for U-GAS® expansion and we will continue to monitor the situation in order to make the best decisions on behalf of our shareholders. We continue to work with our partner North American Coal in the evaluation of U-GAS® project sites in North Dakota and Mississippi.”

SES is an energy and technology company that builds, owns and operates coal gasification plants that utilize its proprietary U-GAS® fluidized bed gasification technology to convert low rank coal and coal wastes into higher value energy products, such as transportation fuel and ammonia. The U-GAS® technology, which SES licenses from the Gas Technology Institute, gasifies coal without many of the harmful emissions normally associated with coal combustion plants. The primary advantages of U-GAS® relative to other gasification technologies are (a) greater fuel flexibility provided by our ability to use all ranks of coal (including low rank, high ash and high moisture coals, which are significantly cheaper than higher grade coals), many coal waste products and biomass feed stocks; and (b) our ability to operate efficiently on a smaller scale, which enables us to construct plants more quickly, at a lower capital cost, and, in many cases, in closer proximity to coal sources. SES currently has offices in Houston, Texas and Shanghai, China. For more information on SES, visit http://www.synthesisenergy.com or call (713) 579-0600.