DeMarco Forms a New Division for a New Patent.

Energy Editors/Business Editors

AUSTIN, Texas--(BUSINESS WIRE)--Feb. 5, 2004

DeMarco Energy Systems of America Inc. (OTCBB:DMES) announces the formation of a new division within the company.

DeMarco Energy's first patent was granted on Sept. 3, 1985. Basically, the patent used the municipal water main to withdraw water and return water to it after it passed through the heat exchanger. The water was not changed in any way and the cost was the same as a conventional unit. The success of this patent has been spotted over the years because of a number of reasons in the marketplace.

DeMarco Energy was granted a new patent on Aug. 12, 2003, that uses the same basic process as the first patent, but uses a reuse water line instead of the municipal water main. The reuse water lines are being installed in communities all over the nation. The advantage of a reuse water main is that the water is not drinkable and it is attached to all non-consumption uses, particularly the outside water uses. By using this process, the previous obstacles encountered by the original patent are overcome. The cost of installing this geothermal application is less than half the cost of a normal geothermal installation. This patent has the greatest potential for revenue and profit of any product within DeMarco Energy.

"We are excited and elated over the potential of this patent. Many communities are installing reuse water lines and the market for this patent is expanding every day. This will make it possible to install the DeMarco Energy Miser Heat Pump System in entire neighborhoods. The efficiency, energy savings and dollar savings to the home owner are much more than 50% compared to a conventional system," states William C. Berry, chairman.

DeMarco Energy is in the process of marketing this new patent and will dedicate at least $200,000 to getting the information in the hands of the design people and decision makers. DeMarco is dedicated to promoting this new patent and will hire new people for this new department in the near future. There are over 1,500 communities in the United States that have or are installing reuse water lines. The number of communities is expected to expand over the next few years.

This News Release may contain forward-looking statements relating to future results, performance, plans, events or other matters. Words such as "potentially," "will," "anticipates," "believes," "plans," "expects," "future," "intends" and similar expressions are used to identify these forward-looking statements. Such statements involve numerous risks and uncertainties, including, but not limited to, risks and uncertainties pertaining to development of the company's products and services and markets for such products and services, the timing and level of customer orders, competitive products and services and pricing, changes in economic conditions and the markets for the Company's products and services and other risks and uncertainties. Actual results, performance and events may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this News Release. DeMarco financials can be found in its filings with the Securities and Exchange Commission, which can be accessed at www.sec.gov.