Sheridan 11/22/2012 12:10:01 AM
News / Energy

Next Fuel, Inc. Provides Update on Coal-to-Gas Pilot Projects in China and Indonesia

Production of Biogenic Methane Gas From Virgin Lignite Seams Achieved at Both Projects; Company Signs Development and Licensing Agreement With Partner in Indonesia

Next Fuel, Inc. (OTCQB: NXFI.PK - News) (Pinksheets: NXFI.PK - News) ("the Company"), which develops and commercializes clean energy and environmental technologies and solutions, today provided an update on its coal-to-gas pilot projects in China and Indonesia.

The Company's patent-pending coal-to-gas ("CTG") technology converts the dirtiest fossil fuel, low-grade coal (also known 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 the carbon-containing compounds in the coal and "exhale" biogenic natural gas as a byproduct.

The Company's initial CTG pilot test, which was conducted in southern Sumatra, Indonesia, was recently completed, and all parties involved were very encouraged by the positive results of the test. Six wells were drilled and completed into a virgin lignite seam with no prior gas production or reserves. Within six weeks, all of the wells were producing newly created biogenic methane gas at a measurable rate. To our knowledge, the completion of this field pilot test has positioned Next Fuel, Inc. as the first company in the world to announce the successful implementation of biological CTG technology in a virgin coal seam with no gas production history.

Next Fuel also announced that it has entered into a Development and Licensing agreement ("the Agreement") with its Strategic Partner ("the Partner), a privately owned company in Indonesia. The Agreement, which covers a period of ten years, grants the Partner rights to use the Company's CTG technology within the license territory in southern Sumatra, Indonesia. Next Fuel will receive a 10% gross royalty on gas produced from all wells drilled by the Partner in the license territory, based upon gas prices that are indexed to the local market in Sumatra. Additional revenue will accrue to Next Fuel from the sale of nutrients to, and the payment of technology transfer fees by, the Partner.

"Results from the Indonesian pilot project met our expectations and those of our Partner in Indonesia, and the execution of a comprehensive Development and Licensing agreement represents the achievement of an important milestone in our quest to commercialize our CTG technology on a global scale," stated Bob Craig, Chief Executive Officer of Next Fuel, Inc.

The Company also announced that it has finalized a pilot test project in Inner Mongolia, China, in concert with its strategic partner, Future Fuel. As with the Indonesian pilot project, multiple wells were drilled and completed into a virgin lignite coal seam with no prior gas reserves or production.

"We are very pleased to report that newly-generated biogenic methane gas was detected in the wells in China within three weeks of nutrient injections," noted Craig. "We expect to commence full-scale commercial operations in Inner Mongolia during the second quarter of 2012, and a licensing agreement is currently being negotiated."

"Our business model for the commercialization of CTG technology relies upon the payment to Next Fuel of license royalties or similar revenue from the gas being produced by the owners of coal resources in a growing number of countries," continued Craig. "This minimizes the amount of capital investment by our Company, as we are not required to purchase coal reserves or build gas gathering pipeline systems and related infrastructure."

"The success of these initial pilot tests once again validates our team efforts to build Next Fuel, with its proprietary technologies, into a leading provider of clean energy and environmental solutions," concluded Craig.

About Next Fuel, Inc.

Next Fuel, Inc. develops and commercializes innovative technologies associated with renewable energy, 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 beginning to develop, 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 future products, future contracts 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 Chinese partners, 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 
Rob Kindle
Next Fuel, Inc.
(307) 674-2145 
RJ Falkner & Company, Inc.
Investor Relations Counsel
(830) 693-4400