MWH Morgan Stanley

Nacogdoches Gas, LLC, a wholly-owned subsidiary of BayCorp Holdings, Ltd. ("BayCorp") (AMEX: MWH), today announced that it has agreed to fund the development of three additional natural gas wells in the Kendrick Field in Nacogdoches County, Texas. The wells, which are the first optional wells to be developed under the January 7, 2005 agreement with Sonerra Resources Corporation ("Sonerra"), will be drilled within the area covered by the 3-D seismic data acquired by Nacogdoches Gas on April 20, 2005. The wells are planned as horizontal development wells in the James Lime formation and will explore prospects in deeper intervals. Nacogdoches Gas estimates that the total cost of the three new wells will be $9.5 million to $11.5 million. Nacogdoches Gas also has placed into production the Whirlwind well, the fourth of the initial wells developed under its joint development agreement with Sonerra. Drilled as a horizontal James Lime well with a single lateral of approximately 4,700 feet, the well was placed into production on May 19, 2005 at an estimated total cost of approximately $3.3 million. The initial production for the well was approximately 3.0 million cubic feet per day. Nacogdoches Gas will have a 90% net working interest in this well until all of Nacogdoches Gas' investment and other operating costs for all wells drilled under its agreement with Sonerra are recovered ("Payout"), at which time its net working interest will become 50%. Sonerra owns the remaining net working interest in this well. The total net revenue interest in this well is 77% and therefore, prior to Payout, Nacogdoches Gas will bear 90% of the operating costs of the well and will receive 69.3% of the revenues from the well. The third well developed under its joint development agreement with Sonerra, Painted Horse, was drilled as a vertical well. After initial promising flow rates, this well is not producing commercial amounts of natural gas and Sonerra and Nacogdoches Gas are evaluating their options for this well. These options include completion in another interval or abandonment of the well. The estimated cost of this well is approximately $2.1 million. The cost of this well will be included in the total costs that are to be recovered from producing wells before BayCorp's net working interest is reduced from 90% to 50% in accordance with the joint development agreement with Sonerra. About BayCorp BayCorp Holdings, Ltd. is an unregulated holding company incorporated in Delaware. BayCorp currently has wholly owned subsidiaries that include Nacogdoches Gas, LLC, which owns and develops interests in natural gas and oil production assets in Nacogdoches County, Texas; Benton Falls Associates, L.P., the owner and operator of a hydroelectric generating facility in Benton, Maine; Great Bay Hydro Corporation, which owns and operates a hydroelectric generating facility in Newport, Vermont; Great Bay Power Marketing, Inc., which purchases and markets power on the open market and Nacogdoches Power, LLC, which owns the development rights to the Sterne Power Project in Nacogdoches County, Texas. BayCorp also holds a majority interest in HoustonStreet Exchange, Inc., which operates HoustonStreet.com, an internet-based independent crude oil and refined products trading exchange. Forward Looking Statements Any statements contained in this release regarding the Company's goals, strategies, and expectations are "forward-looking statements." Such statements include those addressing the Company's participation in the future development of natural gas and oil wells and Sonerra's continued development of natural gas and oil wells. Factors that may affect future results include the actual cost of the wells, the success in well drilling and development and the amount of production from the wells, the period over which the wells will be developed, Sonerra Resources, Inc.'s continued operation and its success in oil and gas well development, on which Nacogdoches Gas, LLC is substantially dependant and the ability of BayCorp or its subsidiaries to acquire financing for the development of these projects. No assurances can be given that the results in any forward-looking statements will be achieved and actual results could differ materially. Please review reports filed by BayCorp with the Securities and Exchange Commission for information and factors that could affect the Company's business.