G3 Exploration Regulatory News (G3E)

21 October 2014

GREEN DRAGON GAS LTD

("Green Dragon" or the "Company")

Publication of Prospectus and Further re Admission to Official List

Updated Reserves and Resources

Green Dragon Gas Ltd. (AIM:GDG), one of the largest independent companies involved in the production and sale of CBM gas in China, is pleased to announce, further to the announcement on 26 September, that it has published a prospectus (the "Prospectus") in connection with the admission with a standard listing, of its ordinary shares (the "Ordinary Shares") to the Official List of the UK Listing Authority ("UKLA") and to trading on the London Stock Exchange's Main Market for listed securities (together, "Admission").

It is expected that Admission will become effective and that dealings in the Ordinary Shares of the Company on the London Stock Exchange's Main Market will commence at 8.00am on 27 October 2014. Trading in the Ordinary Shares on AIM will be cancelled at the time of Admission.

The Company is not raising any funds or issuing any new shares in connection with Admission. The Company's TIDM code on the London Stock Exchange will remain 'GDG' and its ISIN will remain KYG409381053. On Admission, there will be 142,316,289 Ordinary Shares in issue.

Updated Reserves and Resources

The Company also announces, as disclosed in the Prospectus, an updated estimate of reserves and resources, as prepared by Netherland, Sewell & Associates, Inc ("NSAI"), as summarised below.

Highlights:

· Reserves and resources confirmed by NSAI Competent Person Report

· Increase in NPV10 reserve valuations, as at 30 April 2014*:

- 1P: US$985.8m, a 6.6% increase (31 Dec 2013: US$898m)

- 2P: US$3.10bn, a 10% increase (31 Dec 2013:US$2,81bn)

- 3P: US$18.56bn, a 15% increase (31 Dec 2013: US$16.12bn)

*Net present value of future revenues, at a discount rate of 10% ($m)

Table 1: Summary of Reserves and Resources Report

Table 2. Future Net Revenue (US$m)

1. There are no reserves for Qinyuan, Panxie East, or Baotian-Qingshan as of 30 April 2014

2. Totals may not add due to rounding

3. Shizhuang South Block estimates include reserves and revenue for Coal Seam 3 in Area 2, which could be subject to relinquishment in accordance with Article 6, Section 3(5), of a framework agreement between China United Coalbed Methane Corporation Ltd. ("CUCBM") and Green Dragon, if the relevant PRC authority confirms Area 2 is a demonstration area. Coal Seam 3 in Area 2 contains 4% of the total 1P net reserves, 18% of the total 2P net reserves, and 5% of the total 3P net reserves.

4. These estimates do not include the impact of CUCBM's cost recovery allowance described in Article 6, Section 2(3) of the Framework Agreement because the cost recovery amount has not been determined. As a demonstration of the potential effect of CUCBM's cost recovery, NSAI estimate that a US$200 million cost recovery would reduce Green Dragon's South 1P, 2P, and 3P net reserves by 8%, 3%, and 1%, respectively.

Copies of the Prospectus will shortly be available on the Company's website: www.greendragongas.com. The Prospectus has been submitted to the UKLA and will be available for inspection at the National Storage Mechanism at www.hemscott.com/nsm.do.

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

About Green Dragon Gas

Green Dragon is a focused upstream (Exploration & Production) company, concentrating on its core asset value proposition over eight blocks, two of which are producing. The Company's blocks are located within six Production Sharing Contracts across four Provinces: Shanxi, Anhui, Jiangxi and Guizhou.

The estimates in this announcement have been prepared in accordance with definitions and guidelines set forth in the 2007 Petroleum Resources Management System (PRMS) approved by the Society of Petroleum Engineers. The information in this announcement pertaining to Green Dragon's China reserves has been reviewed by Hassan Sindhu, the Company's Petroleum engineer with a Bachelor of Science degree from China University of Petroleum.

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