NGAS Resources, Inc., is an independent exploration and production company operating primarily in the Appalachian Basin. We generate our own geological prospects in this region, where we have an established expertise. Our business is structured to achieve capital appreciation through growth in natural gas reserves, production, and cash flow.

We own interests in over 1,100 oil and gas wells and control approximately 400,000 acres. We concentrate on acquiring drilling rights to large tracts that have not yet been developed, due mostly to coal mining operations that historically have prohibited drilling and pipeline construction.

During 2006, we increased our proved reserves by approximately 34% to a record 101 billion cubic feet equivalent (Bcfe). Proved reserves were 97% natural gas with 42% attributable to proved developed reserves. The reserve estimate does not include any probable or possible reserves from the Company’s non-proved properties, which represented approximately 63% of its acreage at December 31, 2006.

Our gathering system, which currently totals over 559 miles, connects the majority of our wells to the interstate pipeline system with access to major natural gas markets in the eastern United States. It includes a 116-mile open access system acquired from Duke Energy Gas Services, LLC that spans parts of southeastern Kentucky and southwestern Virginia and connects to Duke Energy’s East Tennessee Natural Gas interstate pipeline system.

The balance of the system (443 miles) serves our area of interest in the southern Appalachian Basin. Eighty-two percent of our gas produced in the southern Appalachian Basin is transported through our gathering system directly from the wellhead to the interstate pipeline system. Because we restrict third-party access to these facilities, we enjoy competitive advantages in acquiring nearby acreage not yet developed.

Since the majority of our Appalachian acreage is undeveloped, we have a multi-year inventory of drilling locations for future development. While remaining focused on the Appalachian Basin, we look for additional strategic drilling opportunities in other basins with unconventional payzones that are similar to the unconventional payzones located in the Appalachian Basin that would increase our production and reserves.

The common stock of NGAS Resources is traded on the Nasdaq National Market under the symbol "NGAS".