Schlumberger Drill Logs Confirm Powder River Basin Gas Corp.'s New Gas Field Discovery Near Casper, Wyoming.

Business Editors

DENVER--(BUSINESS WIRE)--July 24, 2002

Powder River Basin Gas Corp. (OTCBB:PRVB) announced today that Schlumberger Oilfield Services (NYSE:SLB) drill logs confirmed a 20 foot zone at a depth of 600 feet with good porosity on its Grande #1 exploration well in Converse County, Wyoming 50 miles east of Casper. The Grande #1 well has a gas-bearing reservoir below the White River Sand in the Dakota/Lakota Formation.

Company Chairman Greg Smith said, "We are extremely excited with these preliminary results and the potential of other developments in this field with our joint venture partner, LZT Properties, LLC. Already, various sources indicate a substantial decrease in domestic gas production for the year, which may drive up gas prices later this year. Powder River Gas Corp.'s (OTCBB:PRVB) ability to efficiently analyze and exploit shallow production like that in Converse County, Wyoming positions the Company to take advantage of this anticipated increase in natural gas prices," Smith also said.

The Company anticipates perforating the zone within the next 10-14 days to confirm "commercial quality" and the output of the well.

About Powder River Basin Gas Corp.

Powder River Basin Gas Corp. is an exploration, development and production company engaged in the evaluation and development of coal-bed methane ("CBM") reserves as well as shallow oil reserves within the Powder River Basin in Wyoming. The Company's focus is to obtain leasehold interest in acreage within the Powder River Basin that is in proven geologic settings (known productive coal seams) and is adjacent or near developed leases, which are held by larger CBM developers and operators such as Devon Energy (NYSE:DVN), Western Gas Resources, Williams Companies (NYSE:WMB), Phillips Petroleum (NYSE:P), J.M. Huber and others. This close proximity to other operators allows PRVB to benefit from the established infrastructure of gathering systems, pipelines, electricity sources, roads, etc. In addition, PRVB can benefit from the dewatering of the coals that has already occurred by the offset operators, which helps to reduce the company's water disposal costs. The Company's geologic and engineering focus is concentrated on the commercial development of natural gas from four or five different coal seams in various leases in and around the Sheridan and Gillette areas. In addition, the company has identified the potential of shallow oil reserves (at a depth of 600 to 800 feet) on several of their leases and will pursue commercialization of these assets.

Forward-looking statements contained in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Certain important factors could cause results to differ materially from those anticipated by some statements made in this release. You are cautioned that all forward-looking statements involve risks and uncertainties. Among the factors that could cause results to differ materially are the following: lack of availability of financing; inability to control costs or expenses; success rates for exploratory drilling for oil and gas, transportation problems; and lack of market acceptance of the Company's products, etc. Reference is also made to the risk factors contained in the Company's Registration Statement on Form S-3, which are incorporated herein by reference.

For additional information on Powder River Basin Gas Corp. go to: powderriver-gascorp.com.