News Releases

August 14, 2008

Shares Outstanding:  13,928,084

TSX: “ISR”                                                                                            

Mr. Eugene Hretzay reports SECOND QUARTER FINANCIAL RESULTS

International Sovereign Energy Corp. has provided the company's results for the second quarter ended June 30, 2008.

Highlights
Revenues for the six-month period were $9,367,025, an increase of 202 per cent from the 2007 level of $4,638,987. For the second quarter, revenues were $5,389,527 compared with $2,121,375 in 2007, an increase of 254 per cent. Average production over this period increased from 600 barrels of oil equivalent per day in the second quarter of 2007 to 829 boe/d in the same period of 2008, an increase of 38 per cent. The company exited the quarter at 892 boe/d.

During the first half of 2008, the company drilled three successful gas wells. The first well was tied in and on stream in late March, the second in late June, and the third in mid-July, 2008. Production from these three wells is estimated to be in the region of 200 boe/d net to the company.

Royalty increased from $703,151 at June 30, 2007, to $1,896,229 at June 30, 2008, for the quarter from $439,153 to $1,074,952. The significant increase was due to higher production in the first half of 2008 and the company paying the maximum royalty rate at Berwyn, Medicine River and Peace River areas; wells from these areas are high productivity wells and consequently maximum royalty rates are applied.

Operating and transportation costs totalled $1,532,619 in the first half of 2008, compared with $1,667,521 in 2007, which equates to $10.16/boe, down from $15.34/boe in the same period of 2007. The decrease on per boe/d basis was due to reduced operating expenses at the newer gas properties.

Total general and administrative expenses increased by 274 per cent from $1,001,713 in the second quarter of 2007 to $2,747,621 in the same period of 2008. The increase in expenses is due to severance payouts unilaterally withdrawn from the company's bank account by the previous executives of the company, who considered themselves to be terminated, amounting to $1.2-million and costs incurred for shareholders to vote on a new board. The company is attempting to recover these severance payouts through the courts.

Management has undertaken a review of its Charapa concession in Ecuador associated with the prospect of investing approximately an additional $10-million to bring the field into production. It is also in discussions with previous shareholders of its Bellwether International Inc. subsidiary, which owns the company's interest in the Charapa concession, in order to resolve the issue of approximately $14-million of shareholder loans which were to be assigned to the company.

The company performed an impairment test calculation on June 30, 2008, to assess the recoverable value of the asset. As a result, the company has made a impairment provision against its international petroleum and natural gas properties in Ecuador, Ghana, Columbia and Yemen, totalling $4.2-million for the quarter ended June 30, 2008.

As a result of impairment provision and payout taken by previous executives of the company, the company experienced a loss of $3.7-million and $3.2-million for the three and six months ended June 30, 2008, respectively. This amounts to loss per share of 24 cents and 27 cents for the three-month and six-month periods ended June 30, 2008. Without the impairment provision and severance paid, the earnings per share would have been 12 cents and 15 cents for the three and six months ended June 30, 2008, respectively.

The company has accepted an offer to sell its Marwayne heavy oil assets for cash consideration of $2.4-million. The closing is scheduled for Sept. 17, 2008, and is subject to customary due diligence and regulatory consents. The proceeds will be redeployed in accordance with the company's strategic plan to be released shortly.

We seek Safe Harbor.