Initial Phase of World's First Green Crude Farm Completed On Time and On Budget

COLUMBUS, NM, August 27, 2012 – Sapphire Energy, Inc., one of the world leaders in algae-based green crude oil production, today announced the first phase of its Green Crude Farm, the world's first commercial demonstration algae-to-energy facility, is now operational. Construction of this first phase, which began on June 1, 2011, was completed on time and on budget. When completed, the facility will produce 1.5 million gallons per year of crude oil and consist of approximately 300 acres of algae cultivation ponds and processing facilities. By reaching this key milestone, Sapphire Energy is on target to make algae-based Green Crude a viable alternative fuel solution capable of significantly reducing the nation's need for foreign crude oil, which will serve as the blueprint for scalable algae biofuel facilities globally.

The Green Crude Farm, also known as an Integrated Algal Bio-Refinery, was funded with both private and public funds, including $85 million in private investment from Sapphire Energy backed by a USDA loan guarantee and a $50 million grant from the US DOE. Today, the cultivation area consists of some of the largest algae ponds ever built with groupings of 1.1 acre and 2.2 acre ponds which are 1/8 of a mile long. The initial phase also includes all the necessary mechanical and processing equipment needed to harvest and extract algae and recycle water for the 300 acre Green Crude Farm.

In March, the first seeding of ponds with algae, otherwise known as inoculation, took place and a series of "shakedown" tests began to ensure that all systems are working as planned. Today, the farming operations are exceeding Sapphire Energy's internal productivity goals in terms of biomass yield, demonstrating that large scale cultivation is possible and much larger cultivation systems can be implemented with the proper agronomic processes in place. The company harvested its first crop in June without any system difficulties and has since harvested 21 million gallons of algae biomass totaling 81 tons. Next, the Green Crude Farm is preparing to transition its operations to a winter variety of algae while continuous cultivation, harvest and extraction activities continue.

"Bringing our Green Crude Farm online is not only an important accomplishment for Sapphire Energy, but a critical step toward a viable alternative energy future," says Cynthia ‘CJ' Warner, CEO and chairman of Sapphire Energy. "What was once a concept is now becoming a reality and model for growing algae to make a renewable crude oil for energy. We look forward to sharing our progress as the Green Crude Farm moves to its next stage."

Sapphire Energy partnered with AMEC Project Engineering, who coordinated with 16 New Mexico-based contractors, to complete the first phase of the Green Crude Farm during 12 months of active construction. As of today, Phase One of the project has reached the following milestones:

Construction: Completed on time and on budget
Unit Operations: Conducting all united operations, including cultivation, harvest and extraction in a continuous process
Cultivation: Biomass productivity exceeding the company's goals
Harvest: Successfully harvested 81 tons of biomass

In building the Green Crude Farm:

634 full-time equivalent employees were hired throughout the entire construction phase
$16 million was directly invested with local New Mexico contractors

Sapphire Energy will continue to conduct "shakedown" testing, as well as operate and expand farming operations over the winter, as the facility is commissioned into 2013. By the end of 2014, the Green Crude Farm will produce 100 barrels of Green Crude per day. The commercial demonstration project is expected to prove "commercial" techno-economics, and Sapphire's commercial scale Green Crude facility.

About Sapphire Energy

San Diego-based Sapphire Energy is pioneering an entirely new industry – Green Crude – production with the potential to profoundly change America's energy and petrochemical landscape for the better. Sapphire's products and processes in this category differ significantly from other forms of biofuel because they are made solely from photosynthetic microorganisms (algae and cyanobacteria), using sunlight and CO2 as their feedstock; are not dependent on food crops or valuable farmland; do not use potable water; do not result in biodiesel or ethanol; enhance and replace petroleum-based products; are compatible with existing infrastructure; and are low carbon, renewable and scalable. Sapphire has an R&D facility in Las Cruces, New Mexico, and is currently building the first Integrated Algal BioRefinery in Columbus, New Mexico.

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