Southwestern Water announces reserves of drinking water for Colorado project

LAS VEGAS, Nev., July 16, 2002 -- Southwestern Water Exploration Co. announces that the newly discovered aquifer in Colorado is of drinking water quality.

Water analyses from the aquifer found in the Rehoboth No.1 exploratory discovery indicates that all primary Environmental Protection Agency (EPA) drinking water standards have been met. Two independent laboratories have conducted these preliminary water analyses using EPA guidelines.

Final engineering reports state the available water for sale is a minimum of 129,000 acre-feet and could exceed 300,000 acre-feet dependent on which reservoir development scenario is undertaken. Recent pricing for water in the area has ranged from $10,700 per acre-foot in January 2002 to the most recent pricing of $14,200 per acre-foot.

As the Company continues the Colorado Project and seeks end use contracts, the Company will shift its exploration focus to other states now that our theory of deep aquifers has been proven. The Company believes it has other prospects of equivalent or greater size based on our proprietary database.