Green Dragon Gas : ConocoPhillips Settlement

29 August 2014

GREEN DRAGON GAS LTD

("Green Dragon" or the "Company")

ConocoPhillips Settlement

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, following a period of arbitration and subsequent appeals by the Company, the matter has been resolved to the mutual satisfaction of both parties by way of a final settlement. Green Dragon has agreed to pay a total of US$40 million as a final settlement to ConocoPhillips, who have agreed to forego all claims and awards to them within the various proceedings in multiple jurisdictions. The payment has been made from the Company's existing cash resources and thus the Company's appeal hearing scheduled for November in Singapore has been withdrawn. The matter is now closed.

The Company had received US$42.6 million from ConocoPhillips under a farm-out agreement entered into in August 2009. The funds were utilised for further reserve development and drilling of gas production wells on the Shizhuang South ("GSS") block, and also to fund exploration activities within the Shizhuang North ("GSN") and Qinyuan ("GQY") blocks. 

Randeep S. Grewal, Chairman and Founder of Green Dragon, commented:

"I am very pleased to report the conclusion of this matter in its finality and the removal of the peripheral issues that have surrounded the Company over the past five years. The US$42.6 million of capital injected under the ConocoPhillips farmout accreted significant value to shareholders as demonstrated over the past five years. This accreted value remains with the Company, as the original transaction had contemplated a farmout of half of the Company's acreage in the three Shanxi blocks (GSS, GSN, GQY), which did not transpire. While we feel strongly in the merits of the Company's appeal, there is risk in any litigation, which this pragmatic settlement eliminates. The conclusion of this matter is the last of several that had pre-occupied us in protecting the substantial shareholder value that was being challenged. We are pleased to report the string of successful conclusions this year which enables us to focus exclusively on the future rather than the past.

Today the future of the Company lies in the circa US$1 billion of capital deployed to date, the circa 1,800 wells collectively drilled across the Company's acreage, the rising cash flows from the producing blocks and the good relationship that exists with our counterparties at CNOOC, CUCBM, PetroChina and CNPC".

For further information on the Company and its activities, please refer to the website atwww.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.