Initiation of Research

Green Dragon Gas Ltd
26 November 2007


26 November 2007

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

                        MERRILL LYNCH INITIATES RESEARCH

Green Dragon Gas Ltd. (AIM: GDG), the Chinese coal bed methane ('CBM') business,
today announces that Merrill Lynch has released a CBM sector report and a
research report on the Company titled 'A green giant awakens'. The analyst
initiated research with a Buy recommendation and a price target of US$10.80 per
share. Both reports are available on the Company's website.

Mr. Randeep S. Grewal, Chairman and CEO, comments, ' The CBM sector report and
research report on the Company highlight the significant growth potential for
CBM in China and the Company's leadership position within this niche. We are
pleased to see an institution like Merrill Lynch pick GDG as a leader within the
Chinese CBM industry'.

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

Randeep Grewal

Chairman and Chief Executive, Green Dragon Gas Ltd.
[phone]

Tim Thompson/ Nick Melson/ Susannah Gale

Buchanan Communications
+ 44 (0)20 7466 5000

Dr Azhic Basirov/ David Jones

Smith & Williamson Corporate Finance Limited
[phone]


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