Pegasi Energy Resources Raises $5,388,900 in Private Placement

Tyler, Texas, July 28, 2011/PrimeNewswire/ - Pegasi Energy Resources Corp. (OTCBB: PGSI) (the “Company”), an East Texas based oil and gas exploration and production company headquartered in Tyler, Texas, today announced the closing of its private placement to non-U.S. investors of $5,388,900 in gross proceeds. Investors purchased units priced at $1.00.  Each unit consisted of two shares of the Company’s common stock and a warrant to purchase one share of the Company’s common stock, exercisable for three years at a price of $0.60 per share.   Beaufort International Associates Limited, a UK registered broker-dealer, acted as the placement agent for this offering. The proceeds from the offering will be used to drill horizontal oil wells, to acquire additional oil and gas leases and to cover general operating costs for the Company’s Cornerstone Project.   Affiliates of the Company, who hold all the Company’s senior debt, have agreed to a four year stand still on the debt as a condition of the private placement. The area of the Cornerstone Project has produced over 400 million barrels of oil and more than 2.3 trillion cubic feet of gas to date.  Pegasi will now apply proven horizontal drilling and multistage frac technology for the first time in the Cornerstone Project area, which it believes will result in substantial additional oil and gas reserves from relatively untapped shale formations.  Mr. Michael Neufeld, President and CEO of Pegasi said; “We are pleased with the success of this offering. These funds will help us to fulfill the Company’s drilling plans and realize the potential of the significant oil resources in the Cornerstone Project Area where we now hold approximately 26,617 gross acres.  We believe that our drilling program will enhance the stock value by both adding to our existing reserve base and proving the viability of the significant resources identified by the Company on its Cornerstone acreage.”    About Pegasi Energy Resources Corporation Pegasi Energy Resources Corporation is an organic growth-oriented independent oil and gas exploration and production company, Headquartered in Tyler, Texas. Pegasi is focused on a repeatable, low geological risk, high potential project in the active East Texas oil and gas region. The company’s strategy is focused on establishing a portfolio of drilling opportunities to exploit undeveloped reserves to grow production, as well as undertaking exploration to grow future reserves. Additional information concerning Pegasi Energy is available at www.pegasienergy.com. Contact information  Richard Lindermanis  Pegasi Energy Resources Corp.  218 N. Broadway, Suite 204  Tyler, TX 75702  903-595-4139