Green Dragon Gas Ltd. report an operations update to 31 December 2012.

Upstream

• Year on year growth of 55% achieved in annualized year end production of 2.6 BcfPY (201,785 cubic meters/day) compared with 1.7 BcfPY (129,457 cubic meters/day) at the end of December 2011. • Quarterly production in the final quarter was 506 MMcf, a 24% increase on a year earlier (407 MMcf in Q4 2011). • As at 31 December 2012, 51 LiFaBriC wells had been drilled at the Company's production block in Shizhuang South (GSS), representing a 96% increase on the year earlier. • There are an additional 11 LiFaBriC wells across the Company's 5 exploration blocks. • The total number of LiFaBriC wells across all blocks was 62, an increase of 88% year on year. These drilled wells are at various stages of completion, including establishing pipeline connections and de-watering.

Midstream

• At the GSS production block, of the total 19 km pipeline project which connects the existing Integrated Production Facility (IPF) to the north east corner of the GSS production block, 6.8 km of pipe had been laid by the year end resulting in 21 wells being connected to the IPF. • The GSS IPF generated 25.4 KWh of power from CBM produced at the block, a 70% increase year on year. • At GSS, there is now 31.3 km of well gas gathering pipelines, 15.8 km of gas transmission lines, 54.6 km of electrical grid, 6.5 BcfPY (504,000 cubic meters/day) of gas compression capacity and 10 MW power generation facility. • 4 leased trucks and 5 trailers were added to the truck and trailer fleet division in addition to the self-owned truck and trailer fleet comprising 5 and 12 respectively by year end. • The midstream wholesale CNG business in Henan and Anhui provinces recorded an 8.8% decline in sales volume. The sales volume in 2012 was 2.54 Bcf (72.2 million cubic meters). Sales volume in 2011 was 2.79 Bcf (79.1 million cubic meters).

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