Alan Nisselson, a Chapter 7 Trustee, filed a motion in the US Bankruptcy Court for the sale of subsidiary of China Natural Gas, Inc. on October 16, 2014. The trustee seeks the Court's approval for the sale of subsidiary of China Natural Gas, Inc. to Abax Nai Xin A Ltd. and Abax Lotus Ltd., the highest bidders, for a purchase price of $0.25 million less good faith deposit amount less outstanding obligation of $53 million, pursuant to the asset purchase agreement dated October 14, 2014. The debtor's assets include 100% equity interest in Shaanxi Xilan Natural Gas Equipment Co.

Ltd. The good faith deposit will be of $0.13 million. The stalking horse bidder would be entitled to a break-up fee of $0.03 million and expense reimbursement of $0.10 million in case of termination of the asset purchase agreement. Ernst & Young (China) Advisory Limited is appointed as financial advisor to provide marleting services for sale or other disposition of business.