BPG Bpi Energy Holdings,

BPI Energy Holdings, Inc. (AMEX:BPG), an independent energy company engaged in the exploration, production and commercial sale of coalbed methane (CBM) in the Illinois Basin, today announced financial and operating results for the quarter and nine-month periods ended April 30, 2007. Fiscal third-quarter 2007 revenues from gas sales increased 27 percent to $334,706 from the $262,860 generated in the comparable year-ago period. The improvement is primarily attributable to sales volume increases, partially offset by lower sales prices. A net loss of $2.1 million, or $0.03 per share, was recorded during the quarter, compared with last year�s net loss of $4.9 million, or $0.07 per share. The average gas price that BPI received for its gas sales declined seven percent for the quarter, while sales volume increased 35 percent compared with the same quarter of fiscal 2006. BPI received an average of $6.81 per thousand cubic feet (Mcf) for gas sales of 48.6 million cubic feet (MMcf) during the three-month period, versus an average of $7.33 per Mcf on sales of 35.9 MMcf during the same period one year ago. For the nine-month period, revenues rose to $875,615 from last year�s level of $800,365�an increase of nine percent. Gas sales volume advanced 65 percent, reaching 137.4 MMcf, versus 83.1 MMcf in the first nine months of fiscal 2006. Average selling price declined 34 percent to $6.34 per Mcf, from the $9.63 per Mcf realized in last year�s comparable period. Sales volume was negatively impacted during the fiscal 2007 period by the previously announced pipeline curtailment related to increased nitrogen levels. This necessitated sales volume to be constrained from October 2006 through March 2007. The company recorded a net loss of $6.6 million, or $0.09 per share, for the fiscal 2007 nine-months, which primarily reflected increased expenses associated with the establishment of BPI�s in-house technical team and the initiation of the two most recent pilot programs. The net loss of $7.0 million, or $0.12 per share, in the first nine months of fiscal 2006 included the previously disclosed legal settlement with Colt, LLC, in the third quarter. Project Updates During the fiscal third quarter, the company drilled 11 new wells, including two development wells, four pilot wells, one pressure observation well, one water disposal well and three test wells. Eight of these wells are in the Northern Illinois Basin Project, two are in the Southern Basin Project, and one is in the Western Basin Project. Operating data for the fiscal 2007 third-quarter and nine-month periods ended April 30, 2007, follows: Selected Financial and Operating Data � Three Months Ended 4/30/2007� 4/30/2006� � Net Gas Sales (Mcf) 48,558� 35,868� � Average Selling Price ($/Mcf), net $6.81� $7.33� � � Nine Months Ended 4/30/2007� 4/30/2006� � Net Gas Sales (Mcf) 137,400� 83,107� � Average Selling Price ($/Mcf), net $6.34� $9.63� � � At 4/30/2007 At 7/31/2006 � Cumulative Wells Drilled 140� 125� � Wells in Production1 86� 86� � Cash Balance (in millions) $7.1� $19.3� � Acreage in Production < 2% < 2% � Total Acreage 500,000� 500,000� � (1) All producing wells are located at BPI Energy�s Southern Illinois Basin Project. BPI Chief Operating Officer James E. Craddock commented, �We have five rigs drilling CBM wells in the basin with 11 wells drilled through the end of the fiscal third quarter. For the balance of fiscal 2007, we plan to drill 38 new wells, including 26 development wells, eight pilot wells, two pressure observation wells and two test wells.� President and CEO James G. Azlein added, �These projects will require an additional outlay of approximately $7 million, which will be funded by our cash balance and cash raised through the sale of borrowings, debt securities, equity securities and/or joint ventures. We are making progress on our financing initiative and hope to reach resolution on the most attractive alternative in the near future.� BPI is filing its Form 10-Q for its fiscal third-quarter period with the Securities and Exchange Commission today, Wednesday, June 13, 2007. Please refer to the Form 10-Q, which can be found on the company�s website, for additional information on BPI Energy and its operations. To be added to BPI Energy�s e-mail distribution list, please click on the link below: http://www.clearperspectivegroup.com/clearsite/bpi/emailoptin.html About BPI Energy BPI Energy (BPI) is an independent energy company engaged in the exploration, production and commercial sale of coalbed methane (CBM) in the Illinois Basin, which covers approximately 60,000 square miles in Illinois, southwestern Indiana and northwestern Kentucky. The company currently controls the dominant CBM acreage position in the Illinois Basin at approximately 500,000 acres. News releases and other information on the company are available on the Internet at: http://www.bpi-energy.com Some of the statements contained in this press release may be deemed to be forward-looking in nature, outlining future expectations or anticipated operating results or financial conditions. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results or conditions to differ materially from the information expressed or implied by these forward-looking statements. Some of the factors that could cause actual results or conditions to differ materially from our expectations, include, but are not limited to: (a) our inability to generate sufficient income or obtain sufficient financing to fund our operations or drilling plan through July 31, 2007, or thereafter, (b) our inability to retain our acreage rights at our projects, at the expiration of our lease agreements, due to insufficient CBM production, or for other reasons; (c) our failure to accurately forecast CBM production, (d) displacement of our CBM operations by coal-mining operations, which have superior rights in most of our acreage, (e) our failure to accurately forecast the number of wells that we can drill, (f) a decline in the prices that we receive for our CBM production, (g) our failure to accurately forecast operating and capital expenditures and capital needs due to rising costs or different drilling or production conditions in the field, (h) our inability to attract or retain qualified personnel with the requisite CBM or other experience, and (i) unexpected economic and market conditions, in the general economy or the market for natural gas. We caution readers not to place undue reliance on these forward-looking statements. BPI Energy Holdings, Inc. Consolidated Statements of Operations (Unaudited) � Three Months EndedApril 30 Nine Months EndedApril 30 2007� 2006� 2007� 2006� � Revenues: Gas sales $ 334,706� $ 262,860� $ 875,615� $ 800,365� � Expenses: Lease operating expense 411,938� 290,844� 1,275,685� 752,454� General and administrative expenses 1,885,061� 2,054,434� 6,089,287� 4,491,676� Depreciation, depletion and amortization � 215,280� � � 189,988� � � 591,275� � � 402,680� Total operating expenses � 2,512,279� � � 2,535,266� � � 7,956,247� � � 5,646,810� � � Operating loss (2,177,573) (2,272,406) (7,080,632) (4,846,445) � Other income (expenses): Interest income 108,660� 229,888� 493,982� 632,693� Interest expense (1,437) (4,276) (7,616) (18,054) Other income (expense) � �� � � (2,894,794) � � �� � � (2,757,271) � 107,223� � � (2,669,182) � � 486,366� � � (2,142,632) Net loss $ (2,070,350) $ � (4,941,588) $ � (6,594,266) $ � (6,989,077) � Basic and diluted loss per share ($ 0.03) ($ 0.07) ($ 0.09) ($ 0.12) � Weighted average common shares outstanding 70,036,326� 66,395,782� 69,642,804� 60,686,413� BPI Energy Holdings, Inc. Consolidated Balance Sheets � April 30, 2007 July 31, 2006 (Unaudited) ASSETS � Current assets: � Cash and cash equivalents $ 7,070,656� $ 19,279,015� Accounts receivable 130,426� 105,711� Other current assets � 618,937� � 164,764� Total current assets 7,820,019� 19,549,490� � Property and equipment, at cost: Gas properties, full cost method of accounting: Proved, net of accumulated depreciation, depletion and amortization of $734,814 and $375,000 26,326,432� 25,065,448� Unproved � 7,115,629� � 3,368,231� Net gas properties 33,442,061� 28,433,679� Other property and equipment, net of accumulated depreciation and amortization of $818,626 and $587,165 � 1,683,231� � 807,686� Net property and equipment 35,125,292� 29,241,365� Restricted cash 100,000� 100,000� Other non-current assets � 294,447� � 161,125� Total assets $ 43,339,758� $ 49,051,980� � LIABILITIES AND SHAREHOLDERS� EQUITY � Current liabilities: Accounts payable $ 984,802� $ 1,492,239� Current maturity of long-term notes payable 29,135� 140,866� Accrued liabilities and other � 856,696� � 649,237� Total current liabilities 1,870,633� 2,282,342� � Long-term notes payable, less current portion 54,325� 75,149� Asset retirement obligation � 111,020� � 70,754� Total liabilities 2,035,978� 2,428,245� � Shareholders� equity: Common shares, no par value, authorized 200,000,000 shares, 72,524,493 and 70,812,540 outstanding 67,946,143� 67,946,143� Additional paid-in capital 7,145,431� 5,871,120� Accumulated deficit � (33,787,794) � (27,193,528) Total shareholders� equity 41,303,780� 46,623,735� � Total liabilities and shareholders� equity $ 43,339,758� $ 49,051,980�