Ngas Resources (NGAS) 10-Q 2005 Q3 Quarterly report

Exhibit 11.1

Computation of Earnings Per Share

     The following table sets forth the computation of dilutive earnings per share (“EPS”) for the three months and nine months ended September 30, 2005 and 2004.

	Three Months Ended				Nine months Ended
	September 30,				September 30,
	2005		2004		2005		2004
Numerator:
Net income as reported for basic EPS	$	187,197	$	17,068	$	388,611	$	992,692
Adjustments to income for diluted EPS		—		—		—		56,520
Net income for diluted EPS	$	187,197	$	17,068	$	388,611	$	1,049,212
Denominator:
Weighted average shares for basic EPS		17,583,061		14,725,187		16,432,965		13,555,811
Effect of dilutive securities:
Stock options		1,281,751		642,795		899,062		952,136
Warrants		732,324		509,820		390,003		806,119
Conversion of debt instruments		—		—		—		793,088
Adjusted weighted average shares and assumed conversions for EPS		19,597,136		15,877,802		17,722,030		16,107,154
Basic EPS	$	0.01	$	0.00	$	0.02	$	0.07
Diluted EPS	$	0.01	$	0.00	$	0.02	$	0.07