Earth Biofuels Spins Off LNG Subsidiary

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Earth Biofuels Spins Off LNG Subsidiary in Consideration for Majority Ownership of PNG Ventures

07 July, 2008 Dallas, Texas (July 7, 2008) — Earth Biofuels, Inc. (OTCBB: EBOF) today announced the closing of a share exchange with PNG Ventures, Inc. (OTCBB: PNGX) that has resulted in PNGX acquiring EBOF’s wholly-owned subsidiary, New ELNG, LLC, which includes Applied LNG Technologies USA, LLC (“ALT”) and its related LNG business, in exchange for the transfer to EBOF of a majority ownership of PNGX.

With the acquisition, PNGX is now positioned to grow ALT’s LNG business of producing and distributing liquefied natural gas (“LNG”) as a transportation fuel. As a result, Earth Biofuels’ management believes its shareholders will benefit through the Company’s ownership in PNGX. Kevin Markey, former Vice President of Sales for ALT, will be serving as interim CEO of PNGX.

LNG is becoming a fuel of choice among large fleet operators who are seeking cleaner and less costly options to traditional diesel fuel. At current oil and gas prices and tax incentive programs, LNG is between one half and two thirds the cost of petroleum diesel as a fuel for vehicles, depending on the customer. Additionally, emissions of greenhouse gases and particulate matter from LNG-powered vehicles are significantly lower than those from petroleum diesel-powered vehicles.

The spin-off transaction is an important part of EBOF’s restructuring plan, described in its SEC report on Form 8-K filed on 21 November 2007. The share exchange has allowed EBOF to restructure its financial obligations and pursue its main focus of biodiesel and cellulosic ethanol production and alternative fuels distribution.

EBOF’s CEO, Dennis McLaughlin, stated, “Our management believes this transaction will unlock the value of the company’s LNG business and allow it to grow both in terms of production capacity as well as market penetration. The management of PNGX will be able to focus on growing the LNG business as a pure play, and EBOF and its shareholders will benefit through its substantial ownership of a significant player in the fast growing LNG industry.”

Earth Biofuels, Inc. endeavors to produce and distribute biodiesel fuel and cellulosic ethanol through wholesale and retail outlets. The biodiesel fuel is sold under Willie Nelson’s brand name, "BioWillie®." The Company’s Web site is www.earthbiofuels.com