Natural Gas Services Group Inc. Financial Results:

Revenue: Our total revenue increased from $18.9 million to $20.0 million, or 6%, for the three months ended March 31, 2009, compared to the same period ended March 31, 2008. This increase was primarily the result of a 42% growth in rental revenue, offset by a 28% reduction in sales revenue.

Operating income: We increased our operating income from $5.5 million to $6.1 million, or 11%, for the three months ended March 31, 2009, compared to the same period ended March 31, 2008. Growth in operating income benefited primarily from higher rental gross margins which were achieved in the comparable quarterly periods and was positively affected by the product mix where relatively higher rental revenues and margins increased operating income during the period.

Net income: Our net income for the three months ended March 31, 2009, increased 8% to $3.8 million, as compared to net income of $3.5 million for the same period in 2008. This increase was mainly the result of increased operating income and lower interest expense on bank debt.

Earnings per share: Our earnings per diluted share were $0.31 for the three months ending March 31, 2009 as compared to $0.29 for the same 2008 period, a 7% increase.

EBITDA: We increased EBITDA (see discussion of EBITDA at the end of this release) 15% to $9.0 million for the first quarter ended March 31, 2009, versus $7.8 million for the same period in 2008.

Cash flow: At March 31, 2009, we had cash and cash equivalents of approximately $2.7 million, working capital of $33.6 million and total debt of $16.3 million, of which approximately $3.4 million was classified as current. We had positive net cash flow from operating activities of approximately $5.8 million during the first three months of 2009.

Rental fleet: As of March 31, 2009, we had 1,769 natural gas compressors in our rental fleet totaling approximately 222,366 horsepower, as compared to 1,422 natural gas compressors totaling approximately 171,458 horsepower at March 31, 2008. As of March 31, 2009, we had 1,447 natural gas compressors rented compared to 1,277 at March 31, 2008. The average monthly rental rate per unit increased to approximately $2,900 for March 2009 compared to approximately $2,400 for March 2008. This increase resulted from the addition of higher than average horsepower units to our rental fleet and corresponding higher rental rates.

Selected data: The table below shows our revenues, percentage of total revenues, gross margin, exclusive of depreciation, and gross margin percentage of each of our segments for the three months ended March 31, 2009 and 2008. Gross margin is the difference between revenue and cost of sales, exclusive of depreciation.

                                                         Gross Margin,                          Revenue                Exclusive of Depreciation(1)                 Three Months Ended March 31,    Three Months Ended March 31,                     2008          2009               2008            2009                                     (dollars in thousands)                                          (unaudited)    Sales             9,626  51%    $6,929  35%     $3,233  34%   $2,400  35%   Rental            9,010  47%    12,788  64%      5,606  62%    8,099  63%   Service and    maintenance        297   2%       308   1%         89  30%       93  30%   Total           $18,933        $20,025          $8,928  47%  $10,592  53%     (1) For a reconciliation of gross margin to its most directly comparable   financial measure calculated and presented in accordance with GAAP, please   read  Non-GAAP Financial Measures" in this report.    

Non GAAP Measures: "EBITDA" reflects net income or loss before interest, taxes, depreciation and amortization. EBITDA is a measure used by analysts and investors as an indicator of operating cash flow since it excludes the impact of movements in working capital items, non-cash charges and financing costs. Therefore, EBITDA gives the investor information as to the cash generated from the operations of a business. However, EBITDA is not a measure of financial performance under accounting principles generally accepted in the United States of America ("GAAP"), and should not be considered a substitute for other financial measures of performance. EBITDA as calculated by NGS may not be comparable to EBITDA as calculated and reported by other companies. The most comparable GAAP measure to EBITDA is net income. The reconciliation of net income to EBITDA and gross margin is as follows:

                                                         Three Months Ended    (in thousands of dollars)                                 March 31,                                                          2008       2009     Net income                                          $3,517     $3,797       Interest expense                                     241        160       Provision for income taxes                         1,928      2,053       Depreciation and amortization                      2,125      2,958     EBITDA                                              $7,811     $8,968       Other operating expenses                           1,350      1,577       Other expense (income)                              (233)        47     Gross margin                                        $8,928    $10,592   

We define gross margin as total revenue less cost of sales (excluding depreciation and amortization expense). Gross margin is included as a supplemental disclosure because it is a primary measure used by our management as it represents the results of revenue and cost of sales (excluding depreciation and amortization expense), which are key components of our operations.