DUG East

―Tempting Targets in the Southern Appalachian Basin‖

Pittsburgh
November 3, 2010
www.ngas.com
NGAS Highlights
 78.4 Bcfe proved reserves YE 09
• 74% natural gas
• Interests in 1,400 PDP wells
 360,000 acres
 2,400 potential horizontal drilling locations
• 2,000 Devonian Shale
• 400 Weir Oil Sand
 Operator of extensive gathering system
 Exposure to other unconventional plays
Strategy
 Disciplined growth through the drillbit
• Exploit horizontal drilling potential of prospects
• Add acreage opportunistically

 Recent success into Weir Sand oil and gas formation increases oil exposure
• 400 potential drilling locations on 70,000 acres

 Drilling program results in predictable production growth

• Drilling funded from cash flow

 Limited financial risk

• Drilling with partnerships and JV partners to prove up additional reserves
Southern Appalachian Basin
 98% successful completion
rate
 Multiple, low-risk payzones
 Devonian Shale consists of
Cleveland; upper, middle and
lower Huron sections
 Long-lived asset base with
repeatable drilling
 1,200 Btu dry gas
 Pipeline infrastructure enables
us to move gas to the market
Core Area
Appalachian Lease Position
 315,000 acres
• 220,000 acres
undeveloped
 Large undeveloped
areas due to coal
mining activities
 Well developed
gathering infrastructure
 New horizontal drilling
technology increasing
oil and gas recoveries
NGAS History in Devonian Shale
 Drilled first vertical
well in 1989
 Drilled first horizontal
well in February 2008
• 56 on line
 Operating 1,000
vertical Devonian
Shale wells
Devonian Shale - Huron/Cleveland Sections
 Structurally
uncomplicated
 Uniform structure
throughout area of
interest
 Good control with over
1,000 vertical
wellbores
 Predictable decline
rates
 No water challenges
Horizontal Devonian Shale Play
 315,000 acres
 Drilled 56 Huron/Cleveland
Shale wells
• 2,000 potential horizontal
drilling locations
 $1.0 MM average costs
 Up to 1.1 Bcfe EUR/well
 Extending lateral legs out
4,700 feet
Horizontal Drilling Upside
 Increased oil and gas production accelerates value creation
 New technology drives cost of oil and gas finding costs
down
 Uses existing pipeline infrastructure to move gas
 Adds to operational flexibility
• Reduces total wellsite footprint
— One horizontal location replaces three – four vertical locations
— Pad drilling - multiple horizontal wells on single location
• Allows access to development of areas otherwise
inaccessible due to coal mining activities or difficult terrain
Horizontal Devonian Shale Play Summary
 315,000 acres
 2,000 potential locations
 Improved economics with
extended laterals
 Environmentally sound
drilling and fracing
operations
• Drilling with air
• Nitrogen fracing – no fluids
are used on shale zones
Weir Sand Oil & Gas Prospect
 Increases oil exposure
 70,000 acres
 78 producing vertical wells
 2 horizontal test wells
• Weir Well #1
- 2,040’ horizontal leg
- 10-stage water frac
• Weir Well #2
– 2,500’ horizontal leg
– 12-stage foam frac
 Significant growth potential
• 400 horizontal drilling
locations, risked at 40%
Gathering System Infrastructure
 NGAS is the operator
 30,000 Mcf/d firm capacity
 Large area of control
 Streamlines gas
transportation
• 90% of NGAS production
goes direct from wellhead
to interstate pipeline
• Pipeline will
accommodate 60,000
Mcf/d
Rogersville Liquids Processing Plant
 Processes up to 25,000
Mcf/d
• Expandable design;
second 25,000 Mcf/d
capacity equipment in
storage
 Selling 43,500 gallons/day
 Straddles East Tennessee
Interstate Pipeline
 50/50 JV with Seminole
Energy
TVA Building 880MW Gas-Fired Plant
 5.5 miles from
Rogersville gas
processing plant
(John Sevier plant
site)
 160,000 Mcf/d
maximum natural
gas fuel burn
 Fall 2011
completion date
Southeast Utilities Ups Plans to Replace Coal-Fired Plants
 TVA John Sevier
880 MW gas
plant
 TVA plans to idle
nine coal-fired
units
 Progress Energy
to close 11 coal-
fired plants
 Duke Power to
close 18 coal-
fired plants
Exposure to Other Basins
 Illinois Basin / New Albany
Shale
• 45,000 acres
• 40 wells (3 horizontals)
• New gathering system
 Arkoma Basin CBM (25%
working interest)
• 51 horizontal wells
• 15 vertical wells
 West Virginia Devonian Shale
interests
 Williston Basin – Bakken Play
• Dunn County, ND overrides
on 18,000 acres
NGAS Devonian Shale Advantages
 Large land position (315,000 gross acres)
• 220,000 undeveloped acres
 Predictable reservoir characteristics
• 1,000 vertical ―control wells‖
 Generous takeaway to markets with premium pricing
• NGL processing facility on line
 No water challenges
• Drilling with air
• Fracing with nitrogen
 Ample equipment and services available
NGAS Summary
 Large unconventional resource base
• 360,000 acres (gross)
 Ample gathering/processing facilities
 Proven horizontal drilling/completion
technology
 Interests in over 1,400 producing
wells
 Drilling partnerships prove up acreage
position
• Shares development costs
• Substantial back-in interest after
payout
 Increased oil exposure in Weir Sand
• 70,000 acres to develop
• 400 potential horizontal locations
Forward-Looking Statement
Corporate Office A number of statements made during the company's
NGAS Resources, Inc. presentation, other than statements of historical fact,
120 Prosperous Place may be forward-looking within the meaning of Section
Suite 201 21E of the Securities Exchange Act of 1934. These
Lexington, KY 40509 statements involve risks and uncertainties that could
859.263.3948 cause actual results to differ materially from those
859.263.4228 (Fax) expressed or implied in those statements due to
Website: www.ngas.com economic conditions and other risks, uncertainties
and circumstances partly or totally outside the control
Contacts of the company, including risks of production
William S. Daugherty variances from expectations, volatility of product
President & CEO prices, the availability of capital to fund drilling and the
ability of the company to implement its business
D. Michael Wallen strategy. These and other risk factors are described
Executive Vice President in the company's annual report on Form 10-K for 2009
which is available on the company’s website. The
company will not necessarily update any of the
forward-looking statements except as required by law.