China North East Petroleum Announces Preliminary Fourth Quarter and Full Year 2010 Oil Production Results and Fourth Quarter Drilling Results for Tiancheng

HARBIN, China and NEW YORK, Feb. 7, 2011 /PRNewswire-Asia-FirstCall/ --China North East Petroleum Holdings Ltd. (the "Company" or "NEP") (NYSE Amex: NEP), an oil producing and oilfield services company in Northern China, today announced preliminary fourth quarter and full year 2010 oil production results and fourth quarter 2010 drilling results for its oil drilling and service subsidiary, Tiancheng.

The Company's crude oil production for the full year 2010 totaled 723,154 barrels, a 20% decrease from 908,126 barrels in 2009. Oil production in the 2010 fourth quarter was 161,279 barrels, a 19% increase sequentially from 135,473 barrels in the 2010 third quarter. The total number of wells in production as of December 31, 2010 were 295 compared to 289 wells in production as of December 31, 2009.

Additionally, the Company's oil drilling and service subsidiary, Tiancheng, completed drilling contracts for 35 wells with total drilling depth of 61,935 meters (203,199 feet) in the fourth quarter of 2010.  Tiancheng performed standard rig and equipment repair and maintenance work at year end that impacted drilling performance in the fourth quarter. Drilling activity was also lower in the fourth quarter as Tiancheng's customers continued to be impacted by previously reported flooding in the third quarter and therefore focused more on repairing and restoring oil production in the fourth quarter period. Tiancheng has experienced a resumption of regular drilling activity in January.

Mr. Jingfu Li, CEO of China North East Petroleum commented, "Our fourth quarter oil production output was sequentially higher than the third quarter but lower than the first two quarters of 2010 as we continued to be impacted by severe flooding that occurred in the third quarter.  In addition, oil production output and overall production time in the fourth quarter was impacted by additional repair and maintenance work required in our oilfields.  However, we were pleased to see sequential growth in production output each month of the fourth quarter.  We did not drill any new wells during the fourth quarter as we chose to preserve cash for our recently announced Durimu oilfield acquisition.

Looking forward in 2011, within our existing fields in Jilin, our production team will be focused on stabilizing our production output.  While we plan on a moderate pace of drilling activity within our current fields, we expect that once the acquisition of the Durimu oilfield in Inner Mongolia has been completed in the coming weeks, a substantial amount of our efforts and investment will go towards exploration and test work in that field, which we believe, will generate significantly greater output than our Jilin fields.  We plan to bring future wells drilled in Durimu into production as soon as practicable.  NEP has qualified buyers lined up for all oil produced from the Durimu field at favorable royalties.  We believe that these recent initiatives will further strengthen China North East Petroleum's position as a major independent, 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 and in providing drilling and production services 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 100% of its produced crude oil for use in the China marketplace. The Company currently operates four oilfields in Northern China. The Company also has an oil service subsidiary, Song Yuan Tiancheng Drilling Engineering Co. Ltd. ("Tiancheng") that provides drilling and oilfield services to both state-owned and private oil operators. 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, and other statements that are not historical facts are forward-looking statements that are based on current expectations.  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 the consummation of the acquisition of Sunite Right Banner Shengyuan Oil and Gas Technology Development Co., Ltd. ("Shengyuan"), an operator with exclusive oilfield exploration and drilling rights to the Durimu oilfield in Inner Mongolia, and other risks described in the Company's annual report on Form 10-K for the year ended December 31, 2009 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.