China North East Petroleum Announces Dismissal of Lawsuit

HARBIN, China and NEW YORK, May 31, 2011 /PRNewswire-Asia/ -- China North East Petroleum Holdings Limited (the "Company") (NYSE Amex: NEP), a leading independent oil producing and oilfield services company in Northern China, today announced that on Friday, May 27th, the Clerk of the United States District Court for the Southern District of New York entered Judgment dismissing the consolidated shareholder derivative action against NEP and certain of its current and former officers and directors.

Three shareholder derivative actions were originally filed in June and August 2010.  The Court subsequently consolidated the three actions and plaintiffs filed a consolidated amended complaint on February 22, 2011 asserting breach of duty claims based on the circumstances that led to the 2010 restatements of the Company's 2008 10-Qs and 10-K and 2009 10-Qs.  Motions to dismiss the consolidated amended complaint were filed by the defendants in the action and the action was dismissed by the order of the United States District Judge for the Southern District of New York on May 26, 2011.

The Company has no information as to whether an appeal will be taken.

Motions to dismiss the consolidated securities class actions have been filed and are subject to further briefing at this time.

Mr. Jingfu Li, CEO of China North East Petroleum commented, "We are pleased with the court's ruling, which supports our position that the lawsuit was without merit and that the Company has and will continue to act in the best long-term interest of the company and its shareholders. We are happy to put the distractions of this litigation behind us so that we can continue to focus on the growth of our business and further solidify NEP as a leading regional Chinese oil producing and oilfield services company."

ABOUT CHINA NORTH EAST PETROLEUM

China North East Petroleum Holdings Limited is an independent oil company that engages in the production of crude oil 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 its produced crude oil for use in the China marketplace. The Company currently operates four oilfields in Northern China. The Company also recently added an oil service subsidiary through its acquisition of Song Yuan Tiancheng Drilling Engineering Co. Ltd. ("Tiancheng"). For more information about the Company, please visit http://www.cnepetroleum.com.

Statements in this press release, including but not limited to those relating to the Company's or management's intentions, beliefs, expectations, hopes, projections, assessment of risks, estimations, plans or predictions for the future, including the impact of the restatement, timing of filings with the SEC and other statements that are not historical facts are forward-looking statements that are based on current expectations.  Statements regarding our ability to realize future production volumes, realize success in our drilling and development activity and forecasts of legal claims, prices, future revenues and income and cash flows and other statements that are not historical facts contain predictions, estimates and other forward-looking statements. Although the Company believes that its expectations are based on reasonable assumptions, it can give no assurance that these expectations will prove correct.  Important factors that could cause actual results to differ materially from those in the forward-looking statements include delays and uncertainties that may be encountered in connection with seismic testing and test drilling in the Durimu oilfield, the anticipated benefits from the acquisition cannot be fully realized, the possibility that costs or difficulties related to the development of the Durimu oilfield will be greater than expected, and other risks described in the Company's annual report on Form 10-K for the year ended December 31, 2010 and its other filings with the SEC.  Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated.  Investors should not place undue reliance on forward-looking statements.  Each forward-looking statement speaks only as of the date of the particular statement and the Company undertakes no duty to update any forward-looking statement.

SOURCE China North East Petroleum Holdings Ltd.

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