Acquisition

Green Dragon Gas Ltd
27 March 2008


                                                             27 March 2008 

                         
                             GREEN DRAGON GAS LTD.

                       ('Green Dragon' or the 'Company')


  Green Dragon Executes Agreement to Acquire Pacific Asia China Energy Inc.



Green Dragon Gas Ltd. (AIM: GDG), today announced that it has entered into a
conditional agreement with Pacific Asia China Energy Inc. ('Pace') through its 
wholly owned subsidiary, Greka China Ltd. ('Greka') to acquire Pace.


Pace is a Vancouver listed public company with operations exclusively in China
focused on Coal Bed Methane ('CBM') through a Production Sharing Contract (PSC)
covering a 946 sq km block in Guizhou province with CUCBM. Additionally, Pace
has a 50 per cent interest in a joint venture drilling service company with
exclusive rights to utilize Mitchell Drilling's Dymaxion horizontal drilling
technology in China for de-gassing coal mines and exploiting CBM. Mitchell
Drilling is one of Australia's most established CBM drilling contractors with a
specialization in horizontal drilling. Pace's website www.pace-energy.com
provides further details of its operations. Following the acquisition Pace's
offices in Canada will be closed, its Beijing offices will be consolidated with
Greka's while Kunming will continue as a regional office to manage the PSC.


Greka, through a wholly-owned British Columbia subsidiary, subject to completion
of due diligence, will acquire all of Pace's outstanding shares at a price of
$0.38 per share in cash (the 'Transaction'). The total value of the Transaction
is approximately CDN $35.18 million. This all-cash Transaction for 100 percent
of Pace's shares represents a 58 per cent premium to Pace's closing price on
March 26, 2008.


In the nine months ending 30 November 2007, Pace made a net loss of CDN $4.1
million and its net assets at that date were CDN $19.6 million (unaudited).
The acquisition will be funded from Green Dragon's existing cash resources 
and/or from the proceeds of the issue of new shares or through the issue of 
debt.


The Transaction has been unanimously approved by the Pace Board of Directors.
Pace's Board of Directors has also resolved to recommend to their shareholders
that they vote in favour of the Transaction. In determining to recommend the
Transaction to Pace's shareholders, Pace Board of Directors considered a number
of factors and engaged Haywood Securities Inc. ('Haywood') to prepare a fairness
opinion in relation to the Transaction. Haywood has provided a fairness opinion
to the Board of Directors of Pace indicating that, subject to its review of all
formal documentation and subject to the assumptions and conditions set forth in
such opinion, the consideration to be received by Pace shareholders is fair from
a financial point of view.

The Transaction will be carried out by way of a statutory plan of arrangement
under Section 288 of the Business Corporations Act (British Columbia), and must
be approved by the applicable court and by 66 2/3 per cent of the votes cast by
holders of Pace's shares. All warrants and options of Pace are to be cancelled
under the plan of arrangement and the arrangement is also subject to approval by
66 2/3 per cent of votes cast by all holders of warrants, options and shares 
voting as a single class. The completion of the Transaction is also subject to
customary closing conditions, including regulatory approvals and completion of
satisfactory due diligence by Greka. The Transaction is expected to close in May
2008, shortly after receipt of shareholder and court approvals.

Details regarding these and other terms of the Transaction are set out in the
Arrangement Agreement, which will be filed by Pace on SEDAR and will be
available on the SEDAR website at www.sedar.com and by the Company on its
website. Further information regarding the Transaction will be contained in a
proxy circular that Pace will mail to holders of its common shares in connection
with the special meeting of shareholders to be held to approve the Transaction.
It is expected that these materials will be mailed in late April 2008 for a
meeting to be held in late May 2008. Once mailed, the proxy circular will be
available at www.sedar.com and on the Company's website.

Pace's directors and officers, who collectively hold approximately 25 per cent
of the outstanding common shares of Pace, have entered into lock up agreements
with Greka to vote their shares in favour of the Transaction, subject to their
ability to withdraw such support in the event that the Arrangement Agreement is
terminated.

Mr. Randeep S. Grewal, Green Dragon's Chairman & CEO stated 'This timely
acquisition is accretive to the Company and its shareholders as we continue to
expand our operations and further enhance our position within the emerging CBM
industry in China. The acquisition will provide us with complementary sets of
assets to the Company's current operations. The additional 946 sq km CBM block 
in Guizhou provides a new focus area within the central inner China niche built 
by the Company to date. Furthermore, this acquisition increases our PSC acreage 
to 7,566 sq km making GDG the largest foreign CBM operator in China. 
Additionally, the Pace-Mitchell joint venture adds two Schramm rigs to the fleet 
of five ordered by Greka Technical Services providing commonality within rigs 
while enhancing the capability to drill horizontal wells. The interchangeability 
will ease the cross-training of personnel and optimize the rig utilization 
enabling the Company to capitalize on its significant drilling inventory.'


'I look forward to the addition of the China based Pace employees and management
to the Greka China team. We expect the complementary nature of the asset
accretion to provide for a similar growth in the employee base with no
redundancies within the China based employees. We expect to maintain a seamless
transition to the continuity of the Guizhou PSC development from its current
exploration stage onto commercialization' Mr Grewal added.


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


Randeep S. Grewal Tim Thompson / Nick Melson
Betty Cheung Investor Relations
Green Dragon Gas Buchanan Communications
[phone] [phone]

Dr Azhic Basirov/ David Jones
Nominated Adviser & Broker
Smith & Williamson Corporate Finance Limited
[phone]










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