DeMarco Increases Quarterly Revenues.

Energy Editors/Business Editors

AUSTIN, Texas--(BUSINESS WIRE)--March 7, 2003

DeMarco Energy Systems of America Inc. (OTCBB:DMES) announces the release of its second quarter financial statements with a significant increase in operating revenues.

DeMarco, a geothermal heating and cooling company and an air filter service company, recorded geothermal revenues of $18,372 and filter service revenues of $231,588, for a total of $249,960, compared with no revenues in the same period last year. The Company also recorded a gross margin profit of $105,801 while still recording an overall net loss of $375,925 or 1 cent per share. A significant component of the net loss is the non-cash interest computation associated with the debentures issued in prior years. This figure was $271,402 for the quarter and $542,804 for the six-month period ended Dec. 31, 2002. This interest did not occur in the same periods in 2001.

"This represents a significant improvement in the operating condition of the company," states William Berry, DeMarco Chairman of the Board. "These revenues are the beginning of the implementation of the business plan for the filter service division of the Company."

The company is on schedule to build and sell at least 4 to 7 distributorships by its fiscal year end of June 30, 2003. The company is currently building 12 distributorships in the Austin and San Antonio area and has encountered significant interest from several potential buyers. All of these distributorships are scheduled to be completed and funded before the end of calendar year 2003. Each distributorship sells for $150,000.00.

"This is a tremendous opportunity for DeMarco. Our filter service sales team has done a tremendous job acquiring new business. We have developed a great distributorship product. We expect DeMarco to begin a positive cash flow and become profitable in this calendar year," William C. Berry says.

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.