LEXINGTON Ky., June 13 /PRNewswire-FirstCall/ --
    Daugherty Resources, Inc. (Nasdaq: NGAS) today announced a $2,565,000
equity infusion by a group of private investment funds.  The Company issued a
total of 900,000 shares of its common stock to the investors at $2.85 per
share, based on a 15% discount to the stock's market price when an agreement
in principal for the transaction was reached.  The newly issued shares
increased the Company's total common stock currently outstanding to 7,425,196
shares.
    The private placement was covered by a Securities Purchase Agreement dated
as of June 10, 2003 (the "Purchase Agreement").  Under the Purchase Agreement,
the investors also received three-year warrants to purchase up to 180,000
additional common shares at an exercise price of $4.80 per share.  The
Purchase Agreement provides for the Company to register the newly issued
shares and any shares purchased under the warrants for resale on behalf the
investors.
    The investors are Crestview Capital Fund I, LP, Crestview Capital Fund II,
LP, Crestview Capital Offshore Fund, Inc., Cranshire Capital L.P., and Baystar
Capital Management, LLC.  Investment banking services for the transaction were
provided to the Company by The Shemano Group, Inc., headquartered in San
Francisco, California, which received a 7% fee and a five-year warrant to
purchase up to 32,400 shares of the Company's common stock at $4.80 share.
    William S. Daugherty, President and CEO of the Company, commented, "We are
very pleased to complete this private placement.  It provides us with the
financial flexibility to increase the Company's participation in our
successful drilling operations, including development of our recently acquired
Leatherwood Prospect located in the Big Sandy Gas Field in the Appalachian
Basin."
    Stewart Flink, Managing Member of Crestview Capital Funds, added, "After
visiting Daugherty's natural gas fields, I was thoroughly impressed with the
Company's operations and efficiencies.  It is evident that the Company has a
geographic niche for low-cost gas production in its area of expertise that
should support significant further development."
    Daugherty Resources is a natural resources company with assets in oil and
gas as well as gold and silver properties.  Based in Lexington, Kentucky, the
Company focuses on natural gas reserve growth through low risk developmental
drilling and acquisitions.  The Company specializes on developing its own
geological prospects concentrated in the Appalachian Basin.  Additional
information can be accessed on the Company's website at http://www.ngas.com.
    The information in this release includes certain forward-looking
statements that are based on assumptions that in the future may prove not to
have been accurate.  Those statements, and Daugherty Resources and its
subsidiaries are subject to a number of risks, including production variances
from expectations, volatility of product prices, the capital expenditures
required to fund its operations, environmental risks, competition, government
regulation, and the ability of the company to implement its business strategy.
These and other risks are described in the company's documents and reports
that are available from the company and the United States Securities and
Exchange Commission.

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