G3 Exploration Regulatory News (G3E)

16 January 2014

GREEN DRAGON GAS LTD

("Green Dragon" or "the Company")

Gas processing and electricity costs

Green Dragon Gas Ltd. (AIM: GDG), one of the largest independent companies involved in the production and sale of CBM gas in China, announces that it has agreed revised gas processing and electricity prices with Greka Engineering Ltd. (AIM: GEL). With effect from 1 January 2014, the prices of both PNG and CNG processing are US$1.625/Mcf (RMB 0.35 per cubic meter) for the first 3,530 Mcf (100,000 cubic meters) of gas processed per day, reducing on a sliding scale to US$0.14/Mcf (RMB 0.03 per cubic meter) for the volumes above 17,700 Mcf per day (500,000 cubic meters). With effect from the same date, the electricity price increases to US$0.197 per kilowatt-hour (RMB 1.2 per kilowatt-hour) for the first 30,000 kilowatt-hour consumed per day, reducing on a sliding scale to US$0.008 per kilowatt-hour (RMB 0.05 per kilowatt-hour) for the volume above 150,000 kilowatt-hour. Previously, the prices charged by the Company for piped natural gas (PNG) and compressed natural gas (CNG) processing were US$0.37/Mcf (RMB 0.08 per cubic meter) and US$0.84/Mcf (RMB 0.18 per cubic meter) respectively, and the electricity price was US$0.105 per kilowatt-hour (RMB 0.64 per kilowatt-hour). In Q3 2013, Greka Engineering Ltd. processed average daily volumes of 1,864 Mcf (52,792 cubic meters) of PNG and 1,070 Mcf (30,305 cubic meters) of CNG for Green Dragon, and supplied the Company with an average of 20,759 kilowatt-hours per day.

For further information on the Company and its activities, please refer to the website at www.greendragongas.com or contact: