First Quarter Results of New Oriental Energy and Chemical Continued to Be Impacted by Reduced Prices and High Costs for Its Coal-Based Products

NEW YORK, NY--(Marketwire - August 17, 2009) - New Oriental Energy & Chemical Corp. (NASDAQ: NOEC) (the "Company"), a specialty chemical and emerging coal-based
alternative fuel manufacturer in The People's Republic of China (the
"PRC"), reported results today for its fiscal year first quarter ended June
30, 2009.

Reflecting reduced sales volumes and lower prices for its fertilizer and
alternative fuel products, the Company reported first quarter revenues
declined to $8,384,866 compared with $15,595,093 in last year's first
quarter. Further, as compared with net income in the first quarter ended
June 30, 2008 of $828,019, or $0.07 per share, the Company incurred a loss
of $(3,161,527), or $(0.25) per share, in the current fiscal year first
quarter.

Since the start of its fiscal year, the Company said that demand in the
PRC's agricultural sector for urea has increased. It noted, though, that
the raw material for the majority of global urea is oil and, consequently,
with sharply lower oil prices, the price of coal-based urea declined
substantially -- from approximately $345 per ton in the Company's fourth
quarter last year, to $253 per ton in the first quarter this year. At the
same time, while down from its highest recent prices, during the first
quarter this year coal in the PRC was approximately 35% more expensive than
in the same period a year ago. Given these factors, the Company's first
quarter urea sales were down sharply and unprofitable.

The lower cost of oil and the continuing high price of coal also affected
sales of DME and methanol, the Company's alternative fuel products. During
the quarter the Company said it shut down production of DME, which was a
key contributor to revenues and profits during the Company's prior fiscal
year, and continues to be its most significant product with respect to
anticipated future growth.

The Company explained that, at present, the primary product DME normally
would substitute for is liquefied petroleum gas (LPG), which is widely used
in the PRC for home cooking and heating. However, with LPG prices down
significantly, DME temporarily has lost its price advantage. With respect
to methanol, current oil prices have reduced the cost of imported oil-based
products which, in turn, has reduced coal-based methanol selling prices.

Under current circumstances, the Company said that it has delayed, for
another three months, the planned completion of its methanol plant
expansion -- from December this year to March of 2010. To date, the plant
has largely been self-financed by the Company. Prior to completion, the
Company is required to pay approximately $9 million for contracts already
executed with certain suppliers. In connection with this the Company is
engaged in discussions regarding outside financing, if required, and
remains confident such financing will be available. In this regard, the
Company's largest shareholder has committed to provide funds to the
Company, if necessary.

A Brightening Outlook

Mr. Chen Si Qiang, CEO and Chairman of the Company, as well as its largest
shareholder, stated, "It is apparent that we underestimated the depth of
the current recession and the effect it would have on oil prices and the
pricing of our key products in the first quarter. However, the signs we
were seeing pointing to an improvement in the situation have emerged more
clearly in recent weeks. On the cost side, we have seen coal prices
continue to decline since March 2009, from a high of more than 70% above
prior year prices. Spurred in part by government actions, the agricultural
demand for urea also continues to be strong. Further, the severe
difficulties faced by smaller domestic coal-based producers of the product
should improve our Company's competitive position."

Legalized Methanol Use With Gasoline

"Additionally," he continued, "in late June, the Chinese government
announced that it will officially start
anti-dumping investigations for methanol being imported from Malaysia,
Indonesia and Saudi Arabia which, in time, should help ease the problem.
Perhaps of greatest significance, the government recently announced
national standards for methanol modified gasoline which will become
effective on November 1, 2009. Legalizing the mixing of methanol with
gasoline should greatly increase the potential for building market demand
for this alternative fuel and benefit our Company. While the prospects for
DME usage -- not only as a household fuel substitute, but as a substitute
in buses and other vehicles for diesel and gasoline -- may take somewhat
longer to develop, we remain confident that the future of this product is
quite bright when oil prices move up in an improving world economy."

Long and Short Term Confidence

"Despite the current environment," Mr. Chen continued, "the Company's
potential should not be underestimated. We will continue to improve
products and to make our processes more effective by applying our very
strong technological skills. Our capabilities in both our traditional and
new alternative fuel products will continue to generate a rich product
pipeline that we believe will drive long-term growth. In our view, the
outlook for improved results in the short term also has improved greatly
after a very difficult period."

About New Oriental Energy & Chemical Corp.

New Oriental Energy & Chemical Corp., listed on the NASDAQ Global Market
(NASDAQ: NOEC), is an emerging coal-based alternative fuels and specialty
chemical manufacturer based in Henan Province, in the PRC. The Company's
core products are Urea and other coal-based chemicals primarily utilized as
fertilizers. Future growth is anticipated from its focus on expanding
production of coal-based alternative fuels, in particular, methanol, as an
additive to gasoline and dimethyl ether (DME), which has been a cheaper,
more environmentally friendly alternative to LPG for home heating and
cooking, and diesel fuel for cars and buses. All of the Company's sales are
made through a network of distribution partners in the PRC. Additional
information on the Company is available on its website at
www.neworientalenergy.com.

Safe Harbor Statement

This press release may contain forward-looking statements concerning New
Oriental Energy & Chemical Corp. The actual results may differ materially
depending on a number of risk factors including, but not limited to, the
following: general economic and business conditions, development, shipment,
market acceptance, additional competition from existing and new
competitors, changes in technology or product techniques, and various other
factors beyond its control. All forward-looking statements are expressly
qualified in their entirety by this Cautionary Statement and the risk
factors detailed in the Company's reports filed with the Securities and
Exchange Commission. New Oriental Energy & Chemical Corp. undertakes no
duty to revise or update any forward-looking statements to reflect events
or circumstances after the date of this release.

NEW ORIENTAL ENERGY & CHEMICAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND
COMPREHENSIVE (LOSS) INCOME
(UNAUDITED)

Three Months Ended
June 30,
----------------------------
2009 2008
------------- --------------

REVENUES $ 8,384,866 $ 15,965,093

COST OF GOODS SOLD (9,973,189) (13,257,214)
------------- --------------

GROSS (LOSS) PROFIT (1,588,323) 2,707,879

General and administrative 727,934 949,161

Selling and distribution 287,540 277,989

Research and development 27,626 20,433
------------- --------------

(LOSS) INCOME FROM OPERATIONS (2,631,423) 1,460,296

OTHER EXPENSES

Interest expense, net (461,917) (186,755)

Other expenses, net (3,507) (32,167)
------------- --------------

(LOSS) INCOME BEFORE INCOME TAXES (3,096,847) 1,241,374

INCOME TAX (55,008) (413,355)
------------- --------------

NET (LOSS) INCOME (3,151,855) 828,019
------------- --------------

OTHER COMPREHENSIVE (LOSS) INCOME

Foreign currency translation (loss) gain (9,672) 440,034
------------- --------------

OTHER COMPREHENSIVE (LOSS) INCOME (9,672) 440,034
------------- --------------

COMPREHENSIVE (LOSS) INCOME $ (3,161,527) $ 1,268,053
============= =============

WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC
AND DILUTED 12,640,000 12,640,000
============= =============

NET (LOSS) INCOME PER SHARE, BASIC AND
DILUTED $ (0.25) $ 0.07
============= =============