Drilling progress; broker app

Green Dragon Gas Ltd
06 May 2008


6 May 2008

                             GREEN DRAGON GAS LTD.
                       ('Green Dragon' or the 'Company')

                GDG PROGRESSES FROM EXPLORATION TO PRODUCTION

Green Dragon Gas Ltd (AIM: GDG), the Chinese coal bed methane ('CBM') business,
today announces an update on its continued success in developing its large coal
bed methane resource across its five blocks in conjunction with its
joint-venture partner. In accordance with Company strategy, wells drilled in
2007 are being systematically put on production. Wells on production have met,
and in some cases exceeded, Company expectations.

BLOCK               WELLS       WELLS      TOTAL        WELLS ON   TARGET WELLS
                  DRILLED     DRILLED      WELLS     PRODUCTION/    ONLINE 2Q08
                     2007   SO FAR 08    TO DATE     DE-WATERING 

SHIZHUANG S            79           4        126              30             46

SHIZHUANG N             2           2          8               5              7

QINYUAN                 1           3         10               5             10

FENGCHENG               5           3         18              10             16

PANXIE EAST             1           0          6               5              5

TOTAL WELLS            88          12        168              55             84


In the Shizhuang South block, GSS008 became the first successful Dymaxion Coal
Inseam well drilled in China and was put on production just over a month ago.
The results have been very positive and the well continues to produce increasing
gas volumes as the de-watering continues. While Mitchell Drilling's Dymaxion
horizontal wells have been very successful fueling the CBM development in
Australia, GSS008 is the first such well in China validating its application in
Chinese low permeable coal seams. Greka employees actively participated with
directional drillers from Mitchell to achieve the successful drilling.

Additionally in Shizhuang South, fracced wells have demonstrated gas production
earlier than anticipated demonstrating the success of the regional dewatering by
other open hole completed producing wells. All the Shizhuang South block wells
will be produced into the existing Zaoyuan compressor station ensuring imminent
potential for gas sales.

In the Shizhuang North and Qinyuan blocks the wells continue to de-water the
coal seam and fracc programmes are being designed into the 2008 work programme.
Additionally in Qinyuan, a new pilot programme has been successfully drilled
with coal seams identified within the same profiles as the successful Shizhuang
South block. The depth and thickness of this new pilot location will
substantially expedite the drilling programme at Qinyuan.

Fengcheng block wells were successfully fracced and all will be online this
quarter as planned. The wells that have been put online so far have demonstrated
gas and water production that are in line with expectations. Finally, Panxie
East pilot wells were put online last week as planned. These wells are expected
to start de-watering as open hole completions and will be evaluated for fracture
stimulations over the course of this year.

Furthermore, the Company announces the appointment of Evolution Securities Ltd
as its joint broker in addition to Smith & Williamson Corporate Finance Limited.

Further to the announcement made in March 2008, regarding the potential
acquisition of Pacific Asia China Energy Inc. ('Pace'), the Company is
continuing its due diligence on Pace and will notify any further progress in due
course.

The Company's Chairman and CEO, Mr. Randeep S. Grewal, commented,

'Drilling, completion and production successes being demonstrated by the wells
being put on line are extremely rewarding for our hard working employees in the
field and this progress validates the Company's business model. We currently
have wells online in each of our five blocks and can already report active
casing head pressures in four of the blocks and gas production in two. I am very
pleased to report such success in relatively short time frame'.

'Following over a decade of effort to develop a vertically integrated gas
company built on our vast CBM resource, this quarter is particularly exciting as
it represents a turning point in the Company's history as we move from being an
exploration to a production company. With gas production in hand, the rest of
the integrated plan will be implemented expeditiously as the management has
worked on the other segments concurrently,' concluded Mr. Grewal.

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

Randeep S. Grewal/Betty Cheung, Green Dragon Gas,                   [phone]

Tim Thompson/Nick Melson, Investor Relations, Buchanan,            [phone]

Dr Azhic Basirov/David Jones, Nomad & Broker, Smith & Williamson,  [phone]

Tim Redfern, Broker, Evolution Securities,                         [phone]






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