NGAS Reports First Quarter 2009 Results

* Production Increased 18 Percent
* Company Anticipates Strengthened Balance Sheet from Pending Gathering System
Sale

LEXINGTON, Ky.--(Business Wire)--
NGAS Resources, Inc. (Nasdaq: NGAS) today reported total revenue of $17.2
million in first quarter 2009 compared to $17.6 million for the comparable
quarter in 2008. Results for the 2009 first quarter reflect the impact of
declining commodity prices, despite increases of 18 percent in oil and gas
production volumes from horizontal drilling success and 11 percent in contract
drilling revenue from substantial completion of last year`s drilling partnership
for non-operated initiatives in West Virginia.

For the quarter, the company reported a net loss of $537,000, compared to net
income of $163,000 in first quarter 2008. Loss per share was $0.02, compared to
earnings per share of $0.01 in the same period last year. Discretionary cash
flow per share was $0.15 compared to $0.16 in the comparable prior period. (A
reconciliation of this non-GAAP measure is provided at the end of this release.)

William S. Daugherty, President and CEO of NGAS Resources, commented, "We
initiated our horizontal drilling program over one year ago. The success of this
program enabled us to deliver double digit production growth in the first
quarter, a period characterized by ongoing volatility in the commodity and
financial markets." Mr. Daugherty added, "The recently announced agreement for
sale of most of our Appalachian gas gathering assets will significantly
strengthen our balance sheet while allowing us to maintain operational control
of the system and long-term capacity rights for our controlled production."

Operational and Financial Highlights for 1Q 2009 versus 1Q 2008:

* Average daily production was 11.5 Mmcfe versus 9.7 Mmcfe
* Total production volumes were up 18 percent to 1.0 Bcfe
* 12 gross (5 net) wells drilled
* Average realized natural gas price was $6.74/Mcf versus $8.51

* Average price for Appalachian production was $8.10/Mcf

* Discretionary cash flow was $4.0 million versus $4.2 million
* Capital expenditures totaled $6.0 million

First Quarter 2009 Expense Review

Depreciation, depletion and amortization expenses were $3.6 million in the first
quarter 2009 compared to $2.9 million in the first quarter of 2008. The increase
was driven by asset base expansion and extension of gathering systems.

Selling, general and administrative expenses in the first quarter of 2009 were
$3.3 million slightly lower than the prior-year period. This primarily reflects
the timing and extent of marketing costs for sponsored drilling partnerships. As
a percentage of revenue, SG&A costs in both periods were comparable at 19
percent.

Interest expense in the quarter was $1.4 million compared to $1.3 million in the
same period last year reflecting increased borrowings partially offset by lower
average interest rates.

Conference Call Information

Management will host a conference call today at 4:30 p.m. (Eastern) today to
discuss the results. The conference call and replay can be accessed by telephone
and webcast as follows:

Conference Call-in Numbers:

(Toll Free) 1-888-245-0987, Passcode 5680488

(International) 1-913-312-0669 Passcode 5680488

Replay Info (May 11, 2009 thru May 18, 2009)

(Toll Free) 1-888-203-1112, Passcode 5680488

(International) 1-719-457-0820, Passcode 5680488

Webcast (live and replay): www.ngas.com

About NGAS Resources

NGAS Resources is an independent exploration and production company focused on
conventional natural gas basins in the United States that support repeatable
drilling opportunities, principally in the southern portion of the Appalachian
Basin. Additional information, including the company`s annual report on Form
10-K for 2008 and proxy statement, can be accessed on its website at
www.ngas.com.

Forward Looking Statement

This release includes forward-looking statements within the meaning of the
Private Litigation Reform Act of 1995 relating to matters such as anticipated
operating and financial performance and prospects. Actual performance and
prospects may differ materially from anticipated results due to economic
conditions and other risks, uncertainties and circumstances partly or totally
outside the control of the company, including risks of production variances from
expectations, volatility of product prices, the level of capital expenditures
required to fund drilling and the ability of the company to implement its
business strategy. These and other risks are described in the company`s periodic
reports filed with the United States Securities and Exchange Commission.

NGAS RESOURCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

Three Months Ended
March 31,
2009 2008
REVENUE
Contract drilling $ 7,323,752 $ 6,602,118
Oil and gas production 7,067,219 8,489,434
Gas transmission, compression and processing 2,804,982 2,558,092
Total revenue 17,195,953 17,649,644

DIRECT EXPENSES
Contract drilling 5,541,426 5,119,849
Oil and gas production 2,324,965 2,764,955
Gas transmission, compression and processing 968,917 1,090,246
Total direct expenses 8,835,308 8,975,050

OTHER EXPENSES (INCOME)
Selling, general and administrative 3,250,265 3,288,483
Options, warrants and deferred compensation 418,273 137,679
Depreciation, depletion and amortization 3,618,870 2,871,760
Bad debt expense - 347,840
Interest expense 1,372,041 1,325,970
Interest income (8,816 ) (69,710 )
Other, net 79,541 (6,277 )
Total other expenses 8,730,174 7,895,745

INCOME (LOSS) BEFORE INCOME TAXES (369,529 ) 778,849
INCOME TAX EXPENSE 167,162 615,660
INCOME (LOSS) $ (536,691 ) $ 163,189
NET INCOME (LOSS) PER SHARE
Basic $ (0.02 ) $ 0.01
Diluted $ (0.02 ) $ 0.01
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING
Basic 26,671,146 26,235,811
Diluted 26,671,146 26,731,037

NGAS RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS

March 31, December 31,
2009 2008
ASSETS (Unaudited)
Current assets:
Cash $ 1,248,066 $ 981,899
Accounts receivable 5,758,219 10,450,173
Prepaid expenses and other current assets 609,850 540,253
Loans to related parties 77,474 79,188
Total current assets 7,693,609 12,051,513
Bonds and deposits 837,898 623,898
Oil and gas properties 232,001,956 229,218,344
Property and equipment 3,099,554 3,285,925
Loans to related parties 171,429 171,429
Deferred financing costs 1,501,959 1,689,580
Goodwill 313,177 313,177
Total assets $ 245,619,582 $ 247,353,866

LIABILITIES
Current liabilities:
Accounts payable $ 5,265,843 $ 12,362,092
Accrued liabilities 641,762 675,141
Deferred compensation 2,209,700 2,246,439
Customer drilling deposits 1,594,248 2,262,955
Long-term debt, current portion 24,000 24,000
Total current liabilities 9,735,553 17,570,627
Deferred compensation 190,376 -
Deferred income taxes 13,116,638 12,949,476
Long-term debt 114,162,661 108,580,448
Other long-term liabilities 3,845,906 3,685,849
Total liabilities 141,051,134 142,786,400

SHAREHOLDERS` EQUITY
Capital stock
Authorized:
5,000,000 Preferred shares
100,000,000 Common shares
Issued:
26,968,646 Common shares (2008 - 26,543,646) 110,988,162 110,626,912
21,100 Common shares held in treasury, at cost (23,630 ) (23,630 )
Paid-in capital - options and warrants 4,039,236 3,774,600
Contributed surplus 602,157 690,370
To be issued:
9,185 Common shares (2008 - 9,185) 45,925 45,925
115,651,850 115,114,177
Deficit (11,083,402 ) (10,546,711 )
Total shareholders` equity 104,568,448 104,567,466
Total liabilities and shareholders` equity $ 245,619,582 $ 247,353,866

NGAS RESOURCES, INC.
CASH FLOW RECONCILIATION

Discretionary cash flow represents net income, as determined under generally
accepted accounting principles (GAAP), with certain non-cash items added back.
Although a non-GAAP measure, discretionary cash flow is widely accepted as a
financial indicator of an oil and gas company`s ability to generate cash that can
be used to internally fund exploration and development activities and to service
debt. This measure may also be used in the valuation, comparison, rating and
investment recommendations for companies in the oil and gas exploration and
production industry. Cash flow is not a measure of financial performance under
GAAP and should not be considered as an alternative to cash flows from operating,
investing, or financing activities or as an indicator of cash flows or measure of
liquidity.

(Unaudited)

Three Months Ended March 31,
2009 2008

Net income (loss) $ (536,691 ) $ 163,189
DD&A 3,618,870 2,871,760
Options, warrants and deferred compensation 418,273 137,679
Incentive bonus paid in common shares 361,250 31,570
Bad debt expense - 347,840
Deferred taxes 167,162 615,660
Discretionary cash flow $ 4,028,864 $ 4,167,698
Discretionary cash flow per share $ 0.15 $ 0.16

NGAS Resources, Inc.
Michael P. Windisch, CFO, 859-263-3948
Fax: 859-263-4228
E-Mail: ngas@ngas.com

Copyright Business Wire 2009