Petrosearch Energy Corporation Letter to Shareholders

Petrosearch Energy Corporation (OTCBB:PTSG):

We have filed our annual Form 10-KSB with the SEC today. While we encourage you to read the entire filed document, this letter to you is intended to summarize some of the pertinent information for the fiscal year which ended December 31, 2007, highlight certain of our achievements and advise you of certain near-term opportunities for Petrosearch regarding its key assets.

Business Strategy

At this point in time, our Company is in a very unique and advantageous transition period. This transition was initiated mainly by the decision of the Partners of our Barnett Shale Partnership (“DDJET”) to test the market and proceed with a sales marketing program for 100% of the DDJET Partnership interest. That decision has caused us to evaluate all the options we have, not only in our Barnett Shale project, but all of our other assets as well. We believe that this evaluation process coupled with a comprehensive action plan will enable us to maximize the value of each of our assets. The opportunities related to our assets that we are in the process of evaluating and planning for are as follows:

Barnett Shale – As we have previously announced, we continue to work with Friedman, Billings, Ramsey & Co., Inc. in reviewing our strategic alternatives available to the Company in connection with the possible DDJET Partnership divestiture. Our options include: 1) selling the Company’s interest in DDJET at an acceptable price; 2) utilizing certain preferential rights afforded the Company under the Partnership Agreement to acquire all or a part of the non-Company interests by venturing with a strategic industry or financial partner; or 3) retaining its current position in DDJET with new and/or existing partners. We continue to have confidential discussions with potential strategic and financial partners to investigate all the available options to Petrosearch as the DDJET sales process moves forward.

North Texas Panhandle Water Flood — As announced previously, we have resolved all the operational issues related to the water supply and the implementation of the water flood and are ready to commence the project. While we are proceeding in the initial phase of this project we are considering several alternatives relative to the long-term goals of the project, including 1) raising the necessary capital to implement the full project; 2) entering into a joint venture with an industry or financial partner to co-develop the project; and/or 3) incorporating the project with the strategic alternatives associated with our Barnett Shale project.

Gruman Prospect, North Dakota – Given that this property is not in our current core area of operations, we will be exploring the market value for this producing asset. The well has an estimated 226 Mboe of proved developed reserves with an SEC PV-10 value of $9.8 million as of December 31, 2007 net to Petrosearch.

Mississippi Tuscaloosa – We hold 725 net acres in a Tuscaloosa oil prospect in the Mississippi Inland Salt Basin, in Yazoo County. This is an exploration prospect in which we are in the final stages of negotiations of a farm-out agreement with an industry partner. We believe securing a farm-out agreement for this exploration project will be the most efficient approach to create maximum value.

Operational Update

Barnett Shale – Significant progress was made in 2007 and through the first several months of 2008. As of today there are 13 wells in our Barnett Shale project producing into the sales line. There is also one well awaiting completion and one well drilling. The production results of the producing wells continue to meet our expectations. We continue to acquire strategic leasehold acreage in the area of interest and continue to drill wells pursuant to the current drilling and completion program.

North Texas, Panhandle Water Flood – Through 2007 and into 2008, we resolved all of the issues related to the water supply needed to implement the water flood. We have signed an agreement with an international oilfield service company to secure the necessary supply of water to implement the water flood, along with the necessary regulatory and government approvals. We have also signed a water supply agreement with the landowner which allows Petrosearch to pump fresh water from the aquifer underlying the property as a backup source of injection water for the project.

2007 Year-end Reserve Estimates — SEC Case

Reserve

Quantity*

PV-10*

(Mboe)

($’s)

Total Proved

2,159,471

$

55,485,780

Total Probable

3,190,113

$

103,638,693

Total Possible

3,575,528

$

48,514,053

Total Proved, Probable and Possible

8,925,112

$

207,638,526

Note: Proved SEC PV-10 value of the reserves increased to $55,485,780 as of December 31, 2007 from $29,424,306 as of December 31, 2006, an increase of 89%. The 2007 year-end pricing was an average of $69.55 per barrel of oil and $6.19 per Mcf of natural gas. Gas converted to oil at 6:1.

* Reserve quantities and PV-10 values estimated by independent reserve engineers

Financial Summary

We finished 2007 with a strong cash position which was mainly due to the closing of our $8.1 million Convertible Note offering in November, 2007. This offering provides us with a balance sheet that will allow us to meet our projected capital needs through a significant portion of 2008.

Summary of Certain Historical Financial Information*

For the Year Ended December 31,

2007

2006

Oil and Gas Production Revenues

$

1,827,664

$

1,232,958

Operating Loss

($2,836,301

)

($2,577,889

)

Operating Loss per Common Share

($0.07

)

($0.08

)

PV-10 of Proved Reserves

$

55,485,780

$

29,424,306

* For more detailed information see our 2007 Form 10-KSB filed today

For Petrosearch, 2008 will be an important year given the positions we are in relative to our Barnett Shale and water flood project and we believe that there are numerous options and alternatives available relative to these projects.

We thank you for your continued interest in, and support of, Petrosearch.

Sincerely yours,

Richard Dole

Chief Executive Officer

About Petrosearch

Petrosearch Energy Corporation, a Nevada corporation with executive offices in Houston, Texas, is a resource-based energy company with activities focused on two major projects: the Barnett Shale trend, and the Anadarko basin of the North Texas Panhandle. For more information please visit www.petrosearch.com.

Forward-Looking Statements

The content and information in this letter is for informational purposes only and is intended for use by persons resident in jurisdictions where such use is permitted by law (including applicable securities laws) and is not to be construed as a prospectus or a public offering or advertisement of securities of Petrosearch. Statements contained herein and the information incorporated by reference herein may be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). Forward-looking statements can be identified by the use of forward-looking terminology such as, but not limited to, “may,”"will,”"expect,”"anticipate,”"estimate,”"would be,”"believe,” or “continue” or the negative or other variations of comparable terminology. We intend such forward-looking statements to be covered by the safe harbor provisions applicable to forward-looking statements contained in Section 21E of the Exchange Act. Such statements (none of which is intended as a guarantee of performance) are subject to certain assumptions, risks and uncertainties, which could cause our actual future results, achievements or transactions to differ materially from those projected or anticipated. Some of such risks and uncertainties are set forth below.

Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events, or performance and underlying assumptions and other statements, which are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demands and acceptance, changes in technology, economic conditions, the impact of competition and pricing, and government regulation and approvals. Petrosearch cautions that assumptions, expectations, projections, intentions, or beliefs about future events may, and often do, vary from actual results and the differences can be material. Some of the key factors which could cause actual results to vary from those Petrosearch expects include changes in natural gas and oil prices, the timing of planned capital expenditures, availability of acquisitions, uncertainties in estimating proved reserves and forecasting production results, operational factors affecting the commencement or maintenance of producing wells, the condition of the credit and capital markets generally, as well as our ability, and the ability of prospective purchasers of the DDJET partnership interests, to access them, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting our business.

Our expectations, beliefs and projections are expressed in good faith and are believed to have a reasonable basis, including without limitation, our examination of historical operating trends, data contained in our records and other data available from third parties. There can be no assurance, however, that our expectations, beliefs or projections will result, be achieved, or be accomplished.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no duty to update these forward-looking statements.