Pacific Asia China Energy Inc. to Be Acquired by GREKA China Ltd. for Approximately $32.40 Million

KELOWNA, BRITISH COLUMBIA, May 20 (MARKET WIRE) --
PACIFIC ASIA CHINA ENERGY INC. (the "Company") (TSX VENTURE: PCE) today
announced that it has entered into an agreement (the "Amendment
Agreement") with GREKA China Ltd. ("GREKA") to amend the Arrangement
Agreement made as of March 27, 2008 among GREKA, GREKA Acquisitions Ltd.
("Acquisitionco") and the Company pursuant to which GREKA, through
Acquisitionco, its wholly-owned British Columbia subsidiary, will acquire
all of the Company's outstanding shares. Under the Amendment Agreement,
shareholders will receive $0.35 per share in consideration for the sale
of their shares to GREKA - rather than the originally offered price of
$0.38. The total value of the transaction is approximately $32.40
million. The adjustment in the purchase price was due to pertinent
findings during GREKA's due diligence.

The amendment and the Amendment Agreement have been approved by a
majority of the Company's Board of Directors. A majority of the Company's
Board of Directors has also resolved to recommend to shareholders that
they vote in favour of the transaction, subject to the receipt by the
Board of Directors of an opinion from the Company's financial advisor,
Haywood Securities Inc., that the consideration to be received by the
Company's shareholders is fair from a financial point of view, subject to
the assumptions and conditions set forth in such opinion.

About the Transaction

The structure of the transaction remains unchanged by the Amendment
Agreement. 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 percent of the votes cast by holders of the Company's shares. All
warrants and options of the Company are to be cancelled under the plan of
arrangement and the arrangement is also subject to 66 2/3 of votes cast
by all holders of warrants, options and shares voting as a single class.
Completion of the transaction is subject to customary closing conditions
and is expected to occur during the third quarter 2008, shortly after
receipt of shareholder and court approvals. The due diligence condition
in favour of GREKA has now been removed.

Details regarding these and other terms of the transaction are set out in
the Arrangement Agreement, which was filed by the Company on the SEDAR
website at www.sedar.com, and in the Amendment Agreement, which will be
filed on SEDAR. Further information regarding the transaction will also
be contained in a proxy circular that the Company 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 early June 2008 for a meeting to be held on
or about July 7, 2008. Once mailed, the proxy circular will be available
at www.sedar.com. All shareholders are urged to read the proxy circular
once it is available.

Shareholder Support Agreements

Directors and officers of the Company holding an aggregate of
approximately 11.0 percent of the outstanding common shares of the
Company, have entered into 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, as amended, is
terminated.

Financial and Legal Advisors

Haywood Securities Inc. is acting as financial advisor to the Company
with respect to the transaction. The Company's legal advisor is Blake,
Cassels & Graydon LLP.

Green Dragon Gas

Green Dragon Gas (GDG.L) is a vertically integrated gas supplier
committed to providing optimum shareholder returns through the execution
of an environmentally progressive niche business plan. GREKA is Green
Dragon's wholly-owned subsidiary. GREKA is a gas supplier based in China
with a focus on the exploration, development, production, distribution
and sales of natural gas from coal seams, commonly known as coal bed
methane or CBM. It expects to generate its own CBM supply from three
projects in Shanxi province, one project in Jiangxi province and one
project in Anhui province covering acreage holdings with an aggregate
area of 6,620 km3 and an estimated 18.1 Tcf of GIP in aggregate. Greka
expects to distribute the CBM production in these projects to its
customers mainly in the form of compressed natural gas by trucks and to a
lesser extent, via pipelines in the form of petroleum natural gas.

About the Company

Pacific Asia China Energy Inc. is a Canadian based resource company
specializing in the strategic development of Coal Bed Methane projects in
China, CBM drilling and coal degasification through its 50 percent owned
subsidiary, Pace Mitchell Drilling Corp. The common shares of the Company
are listed on the TSX Venture Exchange under the symbol "PCE".

Forward-Looking Information

This press release contains "forward-looking information" that is based
on the Company's current expectations, estimates, forecasts and
projections. This forward-looking information includes, among other
things, statements with respect to the potential acquisition of the
Company by Greka, the value of the transaction, the meeting of the
Company's securityholders to consider the transaction and the approval of
the transaction by the Company's shareholders, as well as the Company's
plans, outlook and business strategy. The words "may", "would", "could",
"should", "will", "likely", "expect," "anticipate," "intend", "estimate",
"plan", "forecast", "project" and "believe" or other similar words and
phrases are intended to identify forward-looking information.

Forward-looking information is subject to known and unknown risks,
uncertainties and other factors that may cause the Company's actual
results, level of activity, performance or achievements to be materially
different from those expressed or implied by such forward-looking
information. Such factors include, but are not limited to: uncertainties
related to the ability of the Company and Greka to satisfy the closing
conditions to the transaction, the outcome of the vote by the Company's
securityholders and the decision of the court.

This list is not exhaustive of the factors that may affect our
forward-looking information. These and other factors should be considered
carefully and readers should not place undue reliance on such
forward-looking information. The Company disclaims any intention or
obligation to update or revise forward-looking information, whether as a
result of new information, future events or otherwise.

ON BEHALF OF THE BOARD

Devinder Randhawa, Chairman & CEO

TSX Venture Exchange has not reviewed and
does not accept responsibility for the adequacy or accuracy of this news
release.

Contacts:
Pacific Asia China Energy Inc.
Craig Christy
Investor Relations
(250) 979-7028
Email: info@pace-energy.com
Website: www.pace-energy.com

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