PCYO Pure Cycle Corp

Pure Cycle Corporation (Nasdaq:PCYO) announced the acquisition of approximately 60,000 acre-feet of Arkansas River water from High Plains A&M, LLC on August 31, 2006, which consummates the planned transaction the Company announced on May 10, 2006. The Company acquired these senior water rights through the purchase of over 21,600 shares of the Fort Lyon Canal along with over 17,500 acres of land in southeastern Colorado. "This acquisition represents a tremendous opportunity for the Company and our shareholders," commented Mark W. Harding, President of Pure Cycle. "This acquisition adds senior surface water to our existing water portfolio and will allow the Company to serve an additional 100,000 single family units which brings our total water service capability to over 180,000 units," continued Mr. Harding. "We look forward to working with the Fort Lyon Canal Company and stakeholders in the lower Arkansas Valley to implement innovative water management practices which will enhance the region's economic vitality while at the same time address water shortages along the Denver/Colorado Springs front range." As consideration for the acquired assets, the Company issued 3,000,000 shares of restricted common stock to the seller and granted the seller the right to receive 10% of tap fees the Company receives on the sale of the next 40,000 water taps. "We welcome the addition of our newest stockholder as a result of this transaction. This transaction aligns the interests of the parties to more effectively develop and manage water supplies in this water-short region," concluded Mr. Harding. Company Information Pure Cycle provides water and wastewater services to customers located in the Denver metropolitan area. These services include the design, construction, operation and maintenance of water and wastewater systems utilizing the valuable water supplies that we own. Additional information about Pure Cycle, including recent press releases and our 2005 Annual Report, are available at www.purecyclewater.com, or you may contact Mark Harding at 303-292-3456.