China North East Petroleum Comments on Report Allegations

By its own admission, Bigfish published its "report" to support its short-selling activities. After a review of the report when first published, NEP management has determined that the report, like other self-serving short seller "reports," is inaccurate. Further, the Company confirms that it was never contacted by Bigfish regarding any claims made in its report.

The Contract Drilling Business of the Company's subsidiary oil drilling company is real, as are the revenues and profits the oil drilling business has generated as previously disclosed in the Company's financial filings.  Each of the Company's drilling contracts exist and are genuine and the Company stands behind all of its prior statements regarding them.  The Company intends to have its drilling contracts translated from Mandarin and will make them available to the public as soon as practicable.

The Company reaffirms the financial results as published or, where applicable, as restated in its Quarterly and Annual Reports for the time period called into question.

The Company is preparing a more detailed response to the allegations of short-seller Bigfish, which it intends to publish within the next few days.

Mr. Jingfu Li, Chief Executive Officer of China North East Petroleum commented, "We thank our investors and shareholders for their support, and regret that entities like Bigfish Research, hiding behind pseudonyms, try to make easy money at the expense of investors, by such conduct. When this sort of conduct occurs, everyone loses -- except the short sellers. We implore our investors and those who are interested in our company to read the Bigfish report carefully and note the differences between fact and innuendo, misinterpretation, uninformed conclusions and matters presented as fact but without identifiable or credible sources, as characterized in the Bigfish Research "report." We are confident that the defamatory report will not survive such scrutiny."

ABOUT CHINA NORTH EAST PETROLEUM

China North East Petroleum Holdings Limited is an independent oil company that engages in the production of crude oil and in providing drilling and production services in Northern China. The Company is a pioneer in China's private oil exploration and production industry, and the first Chinese non-state-owned oil company trading on the NYSE Amex.

The Company has a guaranteed arrangement with the PetroChina to sell 100% of its produced crude oil for use in the China marketplace. The Company currently operates four oilfields in Northern China. The Company also has an oil service subsidiary, Song Yuan Tiancheng Drilling Engineering Co. Ltd. ("Tiancheng") that provides drilling and oilfield services to both state-owned and private oil operators. For more information about the Company, please visit http://www.cnepetroleum.com .