Nova Biosource Fuels has announced that it has agreed to issue and sell, in a private placement, securities consisting of approximately 24.4 million shares of its common stock and warrants to purchase up to approximately 7.3 million additional shares.  The purchase price was $1.93 per unit.  The net proceeds from the private placement, after receipt of all committed funds and payment of placement agent fees and commissions, will total approximately $43.9 million.  The warrants have a five-year term and an exercise price of $2.72 per share.  In addition, Nova agreed to issue to one of the placement agents five-year warrants to purchase approximately 466,519 shares of common stock with an exercise price of $2.72 per share.  Jefferies & Company, Inc. acted as the lead placement agent and Ardour Capital Investments, LLC acted as co-placement agent for the private placement.  The private placement is expected to close on Thursday, December 21, 2006. 

Nova issued and sold the securities to selected institutional and individual accredited investors.  Nova intends to use the net proceeds for working capital and for capital and operating expenditures in the pursuit of its business strategy to build and operate two to four biodiesel refineries with a production capacity of between 120 to 240 million gallons of biodiesel fuel per year.

The securities sold in this private placement have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States in the absence of an effective registration statement under the Securities Act and applicable state securities laws or exemption from these registration requirements. Nova has agreed to file a registration statement covering the resale of the shares of common stock acquired by investors and the resale of shares of common stock issuable upon exercise of the warrants.