Xethanol Corporation (AMEX: XNL - News), a renewable energy company, today reported financial results for the three and six months ended June 30, 2007.

For the second quarter of 2007, the company reported a net loss of $6.6 million, or ($0.23) per share, as compared to a $5.9 million net loss, or ($0.24) per share, for the same period of the prior year. The increase in the net loss was primarily related to $4.5 million in non-cash charges including a $2.8 million impairment charge on property held for development. For the three months ended June 30, 2007, the weighted average number of shares outstanding was 28.6 million as compared to 24.2 million weighted average shares for the comparable period in 2006.

David Ames, President and CEO of Xethanol, commented, "We remain focused on executing our plans for long-term growth, and are pleased with the progress made during the period as we continue to move ahead with our development and financing plans." Added Mr. Ames, "There are numerous opportunities in the market for alternate energy, and we are excited about our preliminary research projects to develop these energy sources. We look forward to updating the market as the projects progress."

Review of the Quarter

The company reported net sales of $3.3 million for the second quarter of 2007 compared to $3.2 million in net sales in the second quarter of 2006. The increase was primarily due to an increase in the number of gallons of ethanol sold during the quarter, partially offset by a year-over-year reduction in average selling price per gallon. The company's Blairstown, Iowa plant produced 1.4 million gallons of ethanol during the second quarter of 2007 at an average price of $2.06 per gallon. By-products generated additional revenue of $293,000. This compares to 1.3 million gallons of ethanol sold at an average price of $2.26 per gallon and $189,000 from the sales of by-products for the three months ended June 30, 2006.

Cost of goods sold was $3.4 million in the quarter as compared to $2.4 million in the comparable period in the prior year. The increase was attributable to the higher cost of corn compared to the same period in the prior year.

General and administrative (G&A) costs were $2.2 million in second quarter 2007 as compared to $1.3 million for the comparable period in the prior year. The increase in G&A was primarily due to an increase in legal, accounting and professional fees.

As of June 30, 2007, the company had cash, cash equivalents and marketable securities of $18.1 million and $437,000 of long-term debt.

About Xethanol Corporation

Xethanol Corporation is a renewable energy company focused on alternate energy products and technologies as well as producing ethanol and other co-products. The company is developing and executing a multi-pronged business strategy:

* a technology strategy in which it works with leading scientists to license, acquire and commercialize innovative technologies in alternate energy;
* a production strategy in which it owns and plans to develop ethanol and gasification plants; and
* an investment strategy in which it owns and seeks to acquire majority or minority positions in alternative energy businesses that include Advanced Biomass Gasification Technologies, Inc., which holds patents and know-how related to lignin and biomass gasification, and H2Diesel Holdings, Inc., a development stage company that holds an exclusive license for North America, Central America and the Caribbean to proprietary technology for the manufacture of an alternative biofuel.

For more information about Xethanol, please visit its website at http://www.xethanol.com.

Some of the statements made in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and include known and unknown risks, uncertainties and other factors, many of which the company is unable to predict or control, that may cause the company's actual results or performance to differ materially from any future results or performance expressed or implied by such forward-looking statements. These statements involve risks and uncertainties, including risks and uncertainties associated with the company's development and financing plans, business strategy and research projects, including whether the projects will produce the anticipated results, whether making ethanol from cellulosic biomass will prove to be commercially feasible, and whether the company's investments will prove to be successful. These risks and uncertainties are in addition to other factors detailed from time to time in the company's filings with the SEC, including the section entitled "Risk Factors" in its annual report on Form 10-KSB for the year ended December 31, 2006, as amended. The company cautions investors that any forward-looking statements made by the company are not necessarily indicative of future performance. The company is not responsible for updating the information contained in this press release beyond the published date, or for changes made to this document by wire services or Internet services.

                         XETHANOL CORPORATION
                 Consolidated Statement of Operations
                (in thousands, except per share data)

                      Three Months Ended         Six Months Ended
                           June 30,                  June 30,
                  -------------------------- -------------------------
                      2007         2006          2007         2006
                  ------------ ------------  ------------ ------------
                  (Unaudited)  (Unaudited)   (Unaudited)  (Unaudited)

Net Sales         $      3,265 $      3,161  $      5,687 $      5,650


Cost of sales,
 including
 depreciation of
 $226 and $226
 for six months
 ended June 30,
 2007 and 2006
 and $113 and
 $113 for three
 months ended
 June 30, 2007
 and 2006                3,372        2,356         6,256        4,934
                  ------------ ------------  ------------ ------------
 Gross (loss)
  profit                 (107)          805         (569)          716
                  ------------ ------------  ------------ ------------

Operating
 Expenses
 General and
  administrative
  expenses               2,241        1,329         4,975        2,603
 Equity
  compensation           1,033        3,110         2,592        3,735
 Depreciation
  and
  amortization              83           70           165          110
 Impairment loss
  on property
  held for
  development            2,833            -         2,833            -
Research and
 development               128          378           335          429
                  ------------ ------------  ------------ ------------
  Total
   operating
   expenses              6,318        4,887        10,900        6,877
                  ------------ ------------  ------------ ------------

Loss from
 operations
 before other
 income
 (expense)             (6,425)      (4,082)      (11,469)      (6,161)
                  ------------ ------------  ------------ ------------

Other income
 (expense):
Interest income            230          376           370          385
Interest expense          (15)         (44)          (29)        (214)
Loss on equity
 of H2Diesel
 Holdings, Inc.          (425)        (256)       (1,051)        (256)
Loss on royalty
 note conversion             -      (1,967)             -      (1,966)
Other income                 3          106             4          113
                  ------------ ------------  ------------ ------------
Total other
 income
 (expense)               (207)      (1,785)         (706)      (1,938)
                  ------------ ------------  ------------ ------------

Net loss          $    (6,632) $    (5,867)  $   (12,175) $    (8,099)
                  ============ ============  ============ ============

Basic and
 diluted net
 loss per share   $     (0.23) $     (0.24)  $     (0.43) $     (0.46)
                  ============ ============  ============ ============

Weighted average
 number of
 shares
 outstanding            28,609       24,180        28,576       17,689
                  ============ ============  ============ ============

                         XETHANOL CORPORATION
                     Consolidated Balance Sheets
                            (in thousands)

                                           June 30,      December 31,
                                             2007            2006
                                         -------------   -------------
                                          (Unaudited)
ASSETS
Current assets:
   Cash and cash equivalents             $       1,777   $      24,183
   Marketable securities                        16,300               -
   Receivables                                     517             582
   Inventories                                     297             291
   Other current assets                            904             846
                                         -------------   -------------
      Total current assets                      19,795          25,902

Property and equipment, net                      9,365           8,596
Property held for development                    9,719          12,553
Investment in and advances to H2Diesel
 Holdings, Inc.                                    912           1,963
Research and license agreements, net of
 amortization of $273 and $136 in 2007
 and 2006, respectively                            759             895
Other assets                                     1,538           1,537
                                         -------------   -------------
TOTAL ASSETS                             $      42,088   $      51,446
                                         =============   =============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Accounts payable and accrued expenses $       1,543   $       1,229
   Accounts payable - related parties               16             318
                                         -------------   -------------
     Total current liabilities                   1,559           1,547

Note Payable                                       303             310
Minority Interest                                  116             116
Capitalized lease obligations                       18              22
                                         -------------   -------------
   Total liabilities                             1,996           1,995
                                         -------------   -------------

Commitments and contingencies
Stockholders' Equity:
   Preferred stock, $0.01 par value,
    1,000,000 shares authorized; 0 shares
    issued and outstanding                           -               -
   Common stock, $0.001 par value,
    100,000,000 shares authorized;
    28,609,103 and 28,497,648 shares
    issued and outstanding in 2007 and
    2006, respectively                              29              28
   Additional paid-in-capital                   87,789          84,974
   Accumulated deficit                        (47,726)        (35,551)
                                         -------------   -------------
     Total stockholders' equity                 40,092          49,451
                                         -------------   -------------
TOTAL LIABILITIES AND STOCKHOLDERS'
 EQUITY                                  $      42,088   $      51,446
                                         =============   =============