Next Fuel, Inc. Initiates Work on New Projects in China

Next Fuel, Inc. (NXFI), which develops and commercializes "clean" energy and related environmental technologies, announced today its licensee has initiated work on two new projects in southern China to convert lignite coal into natural gas using the Company's proprietary biogenic coal-to-gas (CTG) technology.

The projects, located in Tianjin and Yunnan Provinces, contain large quantities of lignite coal and have no history of producing gas. Plans call for Next Fuel to complete up to two production units at each location and begin gas production during the first quarter of 2013. Our licensee agreement calls for fixed payments for each production unit.  The addition of these production units will give us a total number of 10 production units in China. Once production starts, Next Fuel's licensee plans to install dozens of additional units in the surrounding areas.

The owners of the coal beds, two well-respected private companies, have already built the infrastructure at the sites, including well networks and connecting pipelines. Next Fuel's technical team is on site, handling nutrient injection, monitoring, and production, as well as providing other technical assistance. 

"We are confident the results we achieve from these projects will cement our position as a leader in the commercialization of CTG technology as we continue to produce natural gas from lower-rank coal," stated Dr. Song Jin, President and CTO of Next Fuel.  "The shallow burial depth of lignite coal significantly lowers the cost of implementing our CTG technology and overall capital expenditures."

"After starting our first commercial project in Inner Mongolia, we are very excited with the expansion of our operations into other areas of China," commented Robert Craig, CEO of Next Fuel. "This is not only a testament to our CTG technology, but it also demonstrates the viability of our business model as a technology provider throughout China, the third-largest coal-depositing country in the world."

Next Fuel's patent-pending CTG technology converts low-grade coal (such as lignite) into clean-burning natural gas through the introduction of nutrients, via a low-pressure pumping system, to the wide range of microorganisms that naturally exist in coal deposits. The proprietary nutrients stimulate the microorganisms, which in turn consume certain carbon-containing compounds in the coal and "exhale" biogenic natural gas as a byproduct.

About Next Fuel, Inc.

Next Fuel, Inc. develops and commercializes innovative energy technologies, including unconventional natural gas production from lower-grade coal, lignite, oil shale and other carbonaceous deposits. The Company is currently in the process of commercializing its Coal-to-Gas (CTG) technology with strategic international partners.

Although the Company's CTG technology is the only product with near-term revenue potential, the Company has also acquired, or is developing, advanced technologies associated with (1) environmental challenges associated with the treatment of energy-related waste water, (2) processes for carbon dioxide conversion and carbon loop closure, and (3) biological fuel cells. In collaboration with leading research institutes, Next Fuel, Inc. is focused upon the identification, development and/or acquisition of a portfolio of growth opportunities with compelling market potential that are consistent with clean energy and environmental stewardship.

Forward-Looking Statements

This announcement contains forward-looking statements, including statements regarding the timing of future products, future contracts, production units and future business to be conducted by the Company, all of which involve risks and uncertainties. Actual results could differ materially from those discussed. Factors that could cause or contribute to such differences include, but are not limited to, the ability of the Company and its collaborating partners to successfully develop and commercialize new technologies, the results of CTG field tests, receptiveness of the market to the Company's technologies and services, negotiations between the Company and its international partners, the ability of the Company's international partners to enter into and implement agreements with the owners of coal, lignite and other similar deposits and other factors discussed in the Company's filings with the Securities and Exchange Commission. All forward-looking statements are based on information available to the Company as of the date of this news release, and the Company assumes no obligation to update such statements.

For additional information, please contact:

Rob Kindle
Next Fuel, Inc.
(307) 674-2145 
Email: rkindle@next-fuel.com

or

KCSA Strategic Communications
Phil Carlson / Brad Nelson
(212) 896-1233 / 1217
Email: pcarlson@kcsa.com / bnelson@kcsa.com