China Natural Gas, Inc. (CHNG), a leading provider of compressed natural gas (CNG) for vehicular fuel and pipeline natural gas for industrial, commercial and residential use in Xi’an, China, today announced that it closed the sale of an additional 858,750 shares of common stock at the public offering price of $8.75 per share, pursuant to the over-allotment option exercised in full by the underwriter in connection with its public offering that closed on September 9, 2009.

The exercise of the over-allotment option brings the total number of shares sold by China Natural Guess in this public offering to 6,583,750. The aggregate net proceeds received by the Company totaled approximately $54.7 million, after deducting underwriting discounts and commissions and the Company’s roadshow travel expenses but before other expenses.

Roth Capital Partners, LLC acted as the sole book runner for the offering, and Simmons & Company International acted as a co-manager for the offering.

The net proceeds from the offering will be used for the construction of the Company’s liquefied natural gas (LNG) facility, the acquisition of eight CNG fueling stations, the purchase of eight CNG trucks to transport CNG and the establishment of a joint venture company with China National Petroleum Corporation Kunlun Natural Gas Co., Ltd., as well as for general working capital purposes.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction. Copies of the prospectus supplement relating to this offering may be obtained from Roth Capital Partners, LLC, Attention: Equity Capital Markets, 24 Corporate Plaza Drive, Newport Beach, CA 92660, by telephone at (949) 720-7194, or via email at rothecm@roth.com .

About China Natural Gas, Inc.

China Natural Gas transports and sells natural gas to vehicular fueling terminals, as well as commercial, industrial and residential customers through its distribution networks in China’s Shaanxi and Henan Provinces. The Company owns approximately 120 km of high pressure pipelines and operates 23 CNG fuelling stations in Shaanxi Province and 12 CNG fuelling stations in Henan Province. China Natural Gas’ four primary business lines include: (1) the distribution and sale of CNG through Company-owned CNG fuelling stations for hybrid (natural gas/gasoline) powered vehicles; (2) the installation, distribution and sale of piped natural gas to residential, commercial and industrial customers through Company-owned pipelines; (3) the distribution and sale of gasoline through Company-owned CNG fuelling stations for hybrid (natural gas/gasoline) powered vehicles; and (4) the conversion of gasoline — fueled vehicles to hybrid (natural gas/gasoline) powered vehicles through its auto conversion division.

China Natural Gas, Inc. (“China Natural Gas” or the “Company”) [[CHNG]], a leading provider of compressed natural gas (CNG) for vehicular fuel and pipeline natural gas for industrial, commercial and residential use in Xi’an, China, today announced that it plans to release its second quarter 2009 financial results on Monday, August 10, 2009, after the market closes.

The management team will hold a conference call on Tuesday, August 11th, 2009, at 8:00 am ET to discuss its second quarter 2009 results. Listeners may access the call by dialing 1-800-289-0730 or 1-913-312-0710 for international callers. A webcast will also be available via the Company’s website at http://www.naturalgaschina.com .

A replay of the call will be available through August 18, 2009. Listeners may access the replay by dialing 1-888-203-1112 or 1-719-457-0820 for international callers, access code: 7941819.

About China Natural Gas, Inc.

The Company transports, distributes and sells natural gas to commercial, industrial and residential customers through its natural gas pipeline networks in China’s Xi’an area, including Lantian County and the districts of Lintong and Baqiao, in Shaanxi Province. The Company owns approximately 120 km of high pressure pipelines in Xi’an, Shaanxi Province and, as of March 31, 2009, operates 23 CNG fuelling stations in Shaanxi Province and 12 CNG fuelling stations in Henan Province.

The Company’s four primary business lines include: (1) the distribution and sale of CNG through Company-owned/leased CNG fuelling stations for hybrid (natural gas/gasoline) powered vehicles; (2) the installation, distribution and sale of piped natural gas to residential, commercial and industrial customers through Company-owned pipelines; (3) the distribution and sale of gasoline through Company-owned/leased CNG fuelling stations for hybrid (natural gas/gasoline) powered vehicles; and (4) the conversion of gasoline- fuelled vehicles to hybrid (natural gas/gasoline) powered vehicles through its auto conversion division.

SAFE HARBOR: FORWARD-LOOKING STATEMENTS

This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. For example, statements about the future plans and goals of the JV with CNPC and its prospects are forward looking and subject to risks. China Natural Gas, Inc. may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 10-K, 10-Q and 8-K, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward- looking statement. Potential risks and uncertainties include, but are not limited to, risks outlined in the Company’s filings with the U.S. Securities and Exchange Commission, including its registration statements on Forms S-1 and S-3, in each case as amended. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

This release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.

China Natural Gas, Inc. (CHNG) shares are trading on par with U.S. companies like XTO Energy Inc. (XTO) and EOG Resources, Inc. (EOG) despite stronger growth rates and a growing amount of cash in its coffers.

China Natural Gas, Inc. [[CHNG]], the first China-based natural gas company publicly traded in the U.S., may be trading at a premium to some of its U.S. peers, but it remains sharply undervalued given its growth rates and future prospects. In fact, a simple price-earnings to growth analysis suggests that the stock should be trading closer to $25 per share.

During the first quarter, China Natural Gas reported revenues that grew 31.9% to $14.96 million and net income that grew 49.6% to $4.2 million. Meanwhile, the company’s balance sheet is extremely robust with total assets of $123.18 million compared to just $5 million in liabilities. The company also reported cash of over $9 million, or $0.62 per share.

China Natural Gas’ true value lies in its cash flows from operations, which increased 78.1% to $6.23 million. After approximately $3 million in property and equipment expenses, this led to a $3.2 million net increase in cash and cash equivalents. Strong cash flows lead to increase cash on the books and negate the need to raise future funding from debt or especially equity.

Assuming no growth in earnings through the remainder of this year, China Natural Gas would be trading at approximately 3.5x projected earnings. And assuming growth rates of 10% going forward, this would equate to a price-earnings to growth ratio of under 0.4, which indicates that the stock is sharply undervalued. Based on this metric, a fair price would be closer to $25 per share.

In the end, China Natural Gas was only recently listed on the Nasdaq after moving up from the OTC-BB exchanges. As a result, many institutional investors have yet to discover this stock. Prudent investors may want to take a look at this stock if looking for a Chinese company that is profitable, growing and undervalued on a price-earnings to growth basis.