Press Room

Press Release

January 2007

Terra Systems, Inc. Signs Option Agreement with Covol Engineered Fuels, LLC

Salt Lake City, Utah - Terra Systems, Inc. (OTC Bulletin Board: TSYI - News) - Terra Systems, Inc. ("TSYI") of Salt Lake City and Price, Utah is pleased to announce the signing of an Amended Option Agreement ("Agreement") with Covol Engineered Fuels, LC ("Covol") of Salt Lake City, UT.

Under the Agreement, TSYI grants Covol an option to operate TSYI's mobile coal drying unit using TSYI's proprietary pneumatic accelerator technology. TSYI's mobile coal dryer will be tested to compliment the front end processing of coal at Covol's dry coal cleaning facility located in Price, Utah.

This Agreement will bring the strengths of both TSYI and Covol to improve the processing and upgrading of waste coal into a value added product for use in the carbon fuel and energy markets.

Clayton Timothy, CEO of Terra Systems, Inc. stated "We believe that the addition of TSYI's technology has the potential to improve output of the Covol facility which will also improve the bottom line for both companies."

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About Terra Systems, Inc.
Terra Systems, Inc. is a clean energy technology company incorporated in 1996 focused on advanced clean coal power generation, enhancement and utilization of waste coal and upgrading of specialty carbon products.

Contact
George Ford
Terra Systems, Inc.
gford3648@msn.com

About Covol Engineered Fuels, Inc.
Covol Engineered Fuels, Inc. is a division of Headwaters Energy Services (NYSE: HW) and is the largest provider of technology and chemical reagents to the coal-based synthetic fuels industry. The company is using its engineered fuels expertise to develop new opportunities in the burgeoning clean coal marketplace.

Note: Certain statements contained herein may be forward-looking statements within the meaning of federal securities laws and Terra Systems, Inc. intends that such forward-looking statements be subject to the safe-harbor created thereby. Forward-looking statements include Terra Systems, Inc. expectations as to the managing and marketing of its businesses within the meaning of the Private Securities Litigation Reform Act of 1995 regarding future events and our future results that are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Actual results may vary materially from such expectations. Words such as "expects," "anticipates," "targets," "goals," "projects," believes," "seeks," "estimates," variations of such words, and similar expressions are intended to identify such forward-looking statements. Any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances, are forward-looking. Although Terra Systems, Inc. believes that its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that our results of operations will not be adversely affected by such factors. Unless legally required, we undertake no obligation to revise or update any forward-looking statements for any reason. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this statement.

Company Profile

Terra Systems, Inc. is a development stage company focused on advanced, clean and renewable energy technology applications and projects. TSYI is engaged in the development and commercialization of it's patented pneumatic accelerator system technology and the upgrading of specialty and waste carbon products. Terra Systems was founded in 1996 and is headquartered in Salt Lake City, Utah with a satellite office in Price, Utah.