UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

SCHEDULE 14A

(RULE 14a-101)

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

<Table>

[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
</Table>

NGAS RESOURCES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

----------------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:

----------------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

----------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:

----------------------------------------------------------------------

(5) Total fee paid:

----------------------------------------------------------------------

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

----------------------------------------------------------------------

(2) Form, Schedule or Registration Statement No.:

----------------------------------------------------------------------

(3) Filing Party:

----------------------------------------------------------------------

(4) Date Filed:

----------------------------------------------------------------------

================================================================================

NGAS RESOURCES, INC.
120 PROSPEROUS PLACE, SUITE 201
LEXINGTON, KENTUCKY 40509

----------------------------
NOTICE OF ANNUAL
MEETING OF SHAREHOLDERS
----------------------------

An annual general meeting of shareholders of NGAS Resources, Inc. will
be held at 2:00 p.m. (Vancouver, British Columbia time) on June 9, 2005 at 625
Howe Street, 10th Floor, Vancouver, British Columbia, Canada V6C 2T6, for the
following purposes:

1. To fix the size of the board of directors.

2. To elect directors.

3. To ratify the appointment of auditors for 2005.

Our board of directors has fixed the close of business on April 22,
2005 as the record date for determining shareholders entitled to vote at the
meeting and any adjournment. A list of our shareholders as of the record date
will be available for inspection at least ten days prior to the meeting during
normal business hours at our offices in Lexington, Kentucky.

If you were a registered holder of our common stock at the close of
business on the record date, you are entitled to notice of the meeting and to
vote on the matters to be acted on at the meeting. If any shareholder transfers
shares after the record date and the transferee, at least 48 hours before the
meeting, produces properly endorsed share certificates to our corporate
secretary or transfer agent or otherwise establishes ownership of the shares,
the transferee may vote the shares.

You are cordially invited to attend the meeting in person. Your vote is
important. If you do not plan to attend the meeting , please complete, sign and
date the accompanying proxy card and return it before the meeting in the
envelope provided. Proxies must be deposited with the office of our transfer
agent, Pacific Corporate Trust Company, 625 Howe Street, 10th Floor, Vancouver,
British Columbia V6C 2T6, by the second business day preceding the meeting or
any adjournment. Your proxy may be revoked at any time before its exercise by
giving a notice of revocation, by delivering a subsequent proxy card or by
voting in person at the meeting.

Lexington, Kentucky By Order of the Board of Directors
April 28, 2005
William S. Daugherty
Chairman of the Board, President and
Chief Executive Officer

================================================================================

================================================================================
TABLE OF CONTENTS
PAGE
----
The Annual Meeting..................................................... 1
Proposal 1 - Fixing the Size of the Board.............................. 2
Proposal 2 - Election of Directors..................................... 3
Proposal 3- Ratification of Auditors................................... 4
Price Range of Common Stock............................................ 6
Management............................................................. 7
Security Ownership of Certain Beneficial Owners and
Related Shareholder Matters............................................ 11
Certain Relationships and Related Transactions......................... 12
Other Matters.......................................................... 13
Shareholder Proposals for 2006 Annual Meeting.......................... 13

================================================================================

NGAS RESOURCES, INC.
120 PROSPEROUS PLACE, SUITE 201
LEXINGTON, KENTUCKY 40509

----------------------------
PROXY STATEMENT
----------------------------

THE ANNUAL MEETING

GENERAL

This proxy statement is being furnished to our shareholders in
connection with the solicitation of proxies by our board of directors for use at
our annual general meeting to be held at 625 Howe Street, 10th Floor, Vancouver,
British Columbia, Canada V6C 2T6120 , at 2:00 p.m. (Vancouver, British Columbia
time) on June 9, 2005. The approximate date of mailing this proxy statement is
April 29, 2005. Along with this proxy statement, we are also mailing a copy of
our annual report for 2004 to holders of record of our common stock.

RECORD DATE

The board has set the close of business on April 22, 2005 as the record
date for the meeting. Registered holders of our common stock at the close of
business on the record date or their transferees who produce proper evidence of
ownership of the transferred shares at least 48 hours before the meeting will be
entitled to vote at the meeting.

QUORUM AND VOTING REQUIREMENTS

As of the record date, there were 15,990,971 shares of our common stock
issued and outstanding, and no shares of our preferred stock were outstanding.
Each share of common stock has the right to one vote on each matter that
properly comes before the meeting. The presence, in person or by proxy, of
holders of at least one-third of the outstanding shares of our common stock is
necessary to constitute a quorum at the meeting. We will hold the meeting on the
scheduled date as long as this quorum requirement is met. We will count your
shares toward the quorum requirement as long as we receive your signed proxy
card, even if you vote to abstain on the proposals or fail to vote.

Approval of the proposals for fixing the size of our board and
ratifying its selection of auditors require simple majority votes, and directors
are elected by plurality votes. If your shares are held in "street name" by a
broker, bank or other nominee, they should give you instructions for voting the
shares. Usually, they will vote the shares on your behalf and at your direction.
Your broker or other nominee may refrain from voting your shares held in its
street name if you do not tell the nominee how to vote those shares. In that
case, they will be treated as broker nonvotes. Any broker nonvotes will count
for the quorum requirement but not for approval of the proposals.

SOLICITATION AND REVOCATION OF PROXIES

To vote your shares at the meeting, you must attend the meeting or
appoint a proxy to vote on your behalf by completing and mailing your proxy
card. You will find a proxy card accompanying this proxy statement. For your
proxy to be valid and used at the meeting, it must be received by our stock
transfer agent, Pacific Corporate Trust Company, 625 Howe Street, 10th Floor,
Vancouver, British Columbia V6C 2T6, by the second business day preceding the
meeting or, if the meeting is adjourned or postponed, by the second business day
preceding the adjourned or postponed meeting.

All shares represented at the meeting by properly executed proxies will
be voted in accordance with the instructions specified on the proxy card. IF NO
SPECIFICATION IS MADE, IT WILL BE VOTED BY THE NAMED PROXY HOLDER IN FAVOR OF
EACH OF THE PROPOSALS. The accompanying proxy card, when properly signed,
confers discretionary authority to the named proxy holder on any other matters
that may properly be brought before the meeting. We are not aware that any
matters to be presented at the meeting other than the proposals in this proxy
statement. See "Other Matters."

Each shareholder may vote in person or by proxy. To be valid, a proxy
card must be signed by the shareholder or by the shareholder's attorney, duly
authorized in writing. A shareholder who has given a proxy may revoke it at any
time before its use by:

o completing, signing, dating and delivering a new proxy no
later than two business days before the meeting;

o personally attending the meeting and voting in person;

o sending an instrument in writing signed by the shareholder or
by his duly authorized attorney to Pacific Corporate Trust
Company, 625 Howe Street, 10th Floor, Vancouver, British
Columbia V6C 2T6, at least two business days before the date
of the meeting; or

o giving an instrument in writing signed by the shareholder or
his duly authorized attorney to the chairman of the meeting on
the day of the meeting or any adjournment.

PROXY MATERIALS

Upon request, additional proxy materials will be furnished without cost
to brokers and other nominees for forwarding to beneficial owners of shares held
in their names. We will also honor requests from nominees and shareholders for
additional copies of our annual report. Requests should be made in writing to
NGAS Resources, Inc., Shareholder Services, 120 Prosperous Place, Suite 201,
Lexington, Kentucky 40509, or by calling us at (859)
263-3948.

COST OF PROXY SOLICITATION

The cost of preparing and mailing this proxy statement to our
shareholders is estimated at approximately $125,000. In addition to the use of
the mails for distribution of this proxy statement, proxies for the meeting may
be solicited by our directors and officers, without additional compensation, by
personal interview, telephone or otherwise.

PROPOSAL 1 - FIXING THE SIZE OF THE BOARD

GENERAL

We are organized as a British Columbia corporation and are subject to
the British Columbia Business Corporations Act (the "BCCA"). The BCCA requires
the size of the board of directors of a British Columbia corporation to be fixed
by general resolution at the annual meeting of the corporation's shareholders.
Under the BCCA, the board can expand its size during the ensuring year by no
more than one-third. In April 2004, our board added a new member, increasing the
size of the board to four directors. See Proposal 2 - Election of Directors. The
board expects to maintain its current size for the ensuring year, subject to the
its authority under the BCCA to add one additional member prior to the next
annual general meeting of shareholders.

VOTE REQUIRED

Approval of the proposal to fix the size of the board of directors at
four members for the ensuring year requires the affirmative vote by holders of a
majority of our common shares voting on the proposal in person or by proxy. THE
BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL TO FIX THE SIZE OF
THE BOARD AT FOUR DIRECTORS.

PROPOSAL 2 - ELECTION OF DIRECTORS

GENERAL

The term of office for each of our incumbent directors expires at the
2005 annual general meeting. Each director elected at the meeting will hold
office until the next annual general meeting of shareholders or until his
successor is elected or appointed.

NOMINEES

The following incumbent directors have been nominated for reelection at
the meeting. A summary of their business experience and background is set forth
below.

WILLIAM S. DAUGHERTY, age 50, has served as the our President, Chief
Executive Officer and member of our board of directors since September 1993, as
well as our Chairman of the Board since 1995. He has also served as President of
our operating subsidiary, Daugherty Petroleum, Inc. ("DPI"), since 1984. Mr.
Daugherty currently serves as the Governor of Kentucky's Official Representative
to the Interstate Oil and Gas Compact Commission and as a member of the Board of
Directors of the Independent Petroleum Association of America. He is a past
president of the Kentucky Oil and Gas Association and the Kentucky Independent
Petroleum Producers Association. Mr. Daugherty holds a B.S. Degree from Berea
College, Berea, Kentucky.

JAMES K. KLYMAN, age 50, has served as a director of the Company since
May 1992. For the past ten years, he has worked in various executive capacities
with computer software firms specializing in digital media, computer and
electronic arts. Mr. Klyman received a B.A. Degree from York University in
Toronto, Canada.

CHARLES L. COTTERELL, age 80, has served as a member of our board of
directors since June 1994. Mr. Cotterell has been involved in the natural
resources industry and has participated in the natural gas and oil industries in
Western Canada and the United States, particularly in Kentucky, for over 40
years. He is a past Vice President of Konal Engineering Co., Ltd., a former
director of Mariner Mines, Ltd., Nordustrial, Ltd., Goliath Boat Co. and
Dominion Power Press Equipment Co., Ltd., as well as the past President of Smith
Press Automation Co., Ltd.

THOMAS F MILLER, age 59, was appointed as a director of the Company in
April 2004. In February 2003, he joined Rural Development and Finance
Corporation, a provider of housing development and community loans in the border
region of Texas and on Indian reservations in Montana, serving as Chief
Operating Officer since December 2003. Prior to joining that firm, he served for
two years, beginning in April 2001, as Senior Vice President of Low Income
Investment Fund, a provider of investment capital for affordable housing and
community facilities. From 1973 through 2001, Mr. Miller was engaged in various
economic development, job creation and poverty reduction projects, initially
with Kentucky Highland Investment Corporation, a development venture capital
group focused in Appalachian Kentucky, where he served as President for ten
years, followed by fifteen years of service with the Ford Foundation both in the
United States and East Africa. Before entering project finance, Mr. Miller was
employed by Arthur Andersen & Co. for five years, receiving his CPA certificate
in 1972. He holds a B.A. Degree from Marietta College, Marietta, Ohio.

ADDITIONAL INFORMATION ABOUT THE BOARD

Actions by the Board in 2004. During 2004, our board of directors took
action, either at meetings or by consent, on a total of 15 occasions. No
director attended or participated in fewer than 75% of those meetings or actions
by consent.

Independent Directors. As a listed issuer on the Nasdaq SmallCap
Market, we are subject to the Marketplace Rules of the Nasdaq Stock Market, Inc.
The Nasdaq Marketplace Rules require a majority of our board

and each committee of our board to qualify as independent directors. Charles L.
Cotterell, James K. Klyman and Thomas F. Miller comprise a majority of our board
and each committee on which they serve. Each of Messrs. Cotterell, Klyman and
Miller qualifies as an independent director under Nasdaq Marketplace Rule
4200(A)(15).

Nominating Committee. The nominating committee of our board of
directors is responsible for recommending nominees for election to the board by
our shareholders and candidates to fill any vacancies on the board between
annual meetings of shareholders. The committee is comprised of Charles L.
Cotterell, James K. Klyman and William S. Daugherty. During 2004, the nominating
committee held one meeting.

Audit Committee. The audit committee of our board of directors is
responsible for monitoring the Company's internal controls and financial
reporting process. During 2004, the audit committee held five meetings. The
committee is comprised of Charles L. Cotterell, James K. Klyman and Thomas F.
Miller. Mr. Miller serves as audit committee financial expect. The board has
determined that Mr. Miller meets the financial expert criteria adopted under the
Securities Exchange Act of 1934 (the "Exchange Act") for financial accounting
experience and expertise.

Audit Committee Report. Prior to the filing of the annual report
accompanying this proxy statement, the audit committee of our board of directors
recommended to the board that our audited financial statements be included in
the report for filing with the SEC. The committee's recommendation was based on
its review and discussions with management and our independent auditors about
the financial statements as well as our internal controls and financial
reporting process. The committee also reviewed the written disclosures and
letter from the auditors required by Independence Standards Board Standard No.
1, and its discussions with our auditors included the matters required to be
covered under that Standard and by the Statement of Auditing Standards No. 61.

This report for the year ended December 31, 2004 has been approved by the
following members of the audit committee:
CHARLES L. COTTERELL JAMES K. KLYMAN THOMAS F. MILLER

Compensation Committee. The compensation committee of our board of
directors is responsible for recommending compensation levels for officers of
the Company. The committee is comprised of Charles L. Cotterell and James K.
Klyman. During 2004, the compensation committee held seven meetings.

Compensation of Directors. No cash fees were paid to our directors
during 2004. In lieu of cash fees, each of our outside directors received common
stock awards of 3,000 shares during 2004 with a market value of $11,340 on the
date of issuance. Our directors also received options during 2004 to purchase
10,000 common shares at an exercise price $4.09 per share and, in the case of
Messrs. Cotterell and Klyman, an additional 10,000 common shares at an exercise
price $4.03 per share. We also reimburse our outside directors for the expenses
they incur in attending meetings of the board or its committees.

VOTE REQUIRED

Under the BCCA, the four nominees for directors receiving the greatest
number of votes cast will be elected as directors. THE BOARD RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" THE NOMINEES.

PROPOSAL 3- RATIFICATION OF AUDITORS

GENERAL

Subject to ratification by our shareholders as required under the BCCA,
our board of directors has appointed Kraft, Berger, Grill, Schwartz, Cohen &
March, LLP ("Kraft Berger") as our auditors for 2005. Kraft Berger is a firm of
chartered accountants based in Toronto, Ontario, and we are required by the BCCA
to engage independent Canadian accountants to audit our financial statements.
Kraft Berger has served as the Company's independent public accountants since
1992.

AUDIT FEES AND SERVICES

The engagement of Kraft Berger for the audit of our consolidated
financial statements for 2005 was approved by the audit committee of our board
of directors, subject to ratification by our shareholders. The audit committee's
approval covered audit fees and tax fees we will incur for these services from
Kraft Berger for 2005. The following table shows the fees we were billed for
professional services rendered Kraft Berger for each of the last two years.
Kraft Berger did not provide any information technology or other products or
services to us in the last two years, and we did not incur any fees for any of
their products or services for those years except as listed below.

YEAR ENDED DECEMBER 31,
---------------------------
2004 2003
--------- ---------

Audit fees(1)........... $ 59,681 $ 49,628
Audit related fees(2)... -- --
Tax fees(3)............. 4,970 8,542

- ------------------

(1) Reflects professional fees billed for the audit of our consolidated
financial statements and review of our quarterly condensed consolidated
financial statements, but does not include additional fees of $56,800 for
2004 and $37,000 for 2003 billed by Hall, Kistler & Company LLP, certified
public accountants, for audits of our United States operations.

(2) Reflects fees, if any, for assurance and consulting services related to the
audit of our consolidated financial statements and reviews of our quarterly
condensed consolidated financial statements.

(3) Reflects tax compliance fees for the preparation of Canadian tax returns
and consulting fees for tax planning services.

PROCEDURES FOR APPROVAL OF AUDIT FEES AND SERVICES

The engagement of Kraft Berger for the audit of our consolidated
financial statements for 2004 was approved by the audit committee of our board
of directors and ratified by our shareholders at the 2004 annual meeting. The
audit committee's approval covered the audit fees and tax fees we incurred for
these services from Kraft Berger for 2004. A copy of our Audit Committee Charter
is available to anyone without charge upon written or oral request directed to
our Corporate Secretary at NGAS Resources, Inc., 120 Prosperous Place, Suite
201, Lexington, Kentucky 40509, telephone (859) 263-3948.

VOTE REQUIRED

Ratification of Kraft Berger as our independent public accountants for
2005 requires the affirmative vote by holders of a majority of our common shares
voting in person or by proxy at the meeting. THE BOARD RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" THE PROPOSAL TO RATIFY ITS ENGAGEMENT OF KRAFT BERGER TO
AUDIT OUR FINANCIAL STATEMENTS FOR 2005.

PRICE RANGE OF OUR COMMON STOCK

TRADING MARKET

Our common stock trades on the Nasdaq SmallCap Market in the United
States under the symbol "NGAS." There is no trading of the common stock in
Canada. The following table sets forth, for the periods indicated, the range of
high and low bid prices for the common stock and average daily trading volume as
reported on the Nasdaq SmallCap Market. These quotations represent inter-dealer
prices, without mark-ups or commissions, and they may not necessarily correspond
to actual sales prices.

BID PRICES
--------------------- AVERAGE DAILY
HIGH LOW VOLUME
------ ------ -------------

2003

First quarter $ 2.05 $ 0.99 31,510
Second quarter 6.72 1.26 243,045
Third quarter 5.49 3.55 213,821
Fourth quarter 6.14 3.75 183,446

2004

First quarter $ 7.00 $ 3.80 451,859
Second quarter 6.94 4.53 336,765
Third quarter 5.20 3.73 126,050
Fourth quarter 5.90 4.32 143,852

2005

First quarter $ 6.39 $ 4.17 249,765

SECURITY HOLDERS

As of April 22, 2005, there were 2,573 holders of record of our common
stock. We estimate there were approximately 5,000 beneficial owners of our
common stock as of that date.

DIVIDEND POLICY

We have never paid cash dividends on our common stock. Our current
policy is to retain any future earnings to finance the acquisition and
development of additional oil and gas reserves. Any future determination about
the payment of dividends will be made at the discretion of our board of
directors and will depend on our operating results, financial condition, capital
requirements, restrictions in debt instruments, general business conditions and
other factors the board of directors deems relevant.

MANAGEMENT

EXECUTIVE OFFICERS

The following table lists our executive officers, together with their
ages as of the date of this proxy statement and their tenure with the Company.

OFFICER OR
DIRECTOR
NAME AGE POSITION SINCE
---- --- -------- ----------

William S. Daugherty..... 50 Chairman of the Board, President and
Chief Executive Officer 1993
D. Michael Wallen........ 50 Vice President - Engineering and Secretary 1995
William G. Barr III...... 55 Vice President - Acquisitions and Legal Affairs 2004
Michael P. Windisch...... 30 Chief Financial Officer 2002

Information about Mr. Daugherty is provided above under the caption
"Proposal 2 - Election of Directors." A summary of the business experience and
background of our other executive officers is set forth below.

D. Michael Wallen joined DPI in March 1995 as Vice President of
Engineering and has served as a Vice President and Secretary of the Company
since March 1997. For six years before joining DPI, he served as the Director of
the Kentucky Division of Oil and Gas, prior to which he was employed by various
operating companies in the Appalachian Basin as a well drilling and completion
specialist and as a gas production engineer. Mr. Wallen recently served as
President of the Kentucky Oil and Gas Association. ("KOGA"). He holds a B.S.
Degree from Morehead State University, Morehead, Kentucky.

William G. Barr III has served as the our Vice President - Acquisitions
and Legal Affairs since 2004 and he has served in that position with DPI since
1993. He received a Juris Doctorate from the University of Kentucky in 1975. Mr.
Barr has more than 25 years' experience in the corporate and legal sectors of
the oil and gas industry, having served in senior management positions in oil
and gas exploration and production companies and as an attorney with a
significant natural resource law practice. Mr. Barr currently serves as
Governing Member Trustee for the Energy & Mineral Law Foundation. He also serves
on the Board of Directors of the KOGA and as Chairman of its Legislative
committee. He was Vice President of KOGA from 1988 to 1992.

Michael P. Windisch joined the Company in September 2003 as Chief
Financial Officer. Prior to that time, he was employed by PricewaterhouseCoopers
LLP, participating for five years in the firms' audit practice. Mr. Windisch is
a member of the American Institute of Certified Public Accountants and the
Kentucky Society of Certified Public Accountants. He holds a B.S. Degree from
Miami University, Oxford, Ohio.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Based on a review of reporting forms filed with the SEC to disclose
changes in beneficial ownership of our common stock, none of our officers or
directors failed to file any required reports on a timely basis during 2004.

CODE OF ETHICS

In accordance with requirements under the Exchange Act, we have a
written code of ethics that applies to our Chief Executive Officer, Chief
Financial Officer and any other officer performing similar functions or
functions of a chief accounting officer or controller. A copy of our code of
ethics is available to anyone without charge upon written or oral request
directed to our Corporate Secretary at NGAS Resources, Inc., 120 Prosperous
Place, Suite 201, Lexington, Kentucky 40509, telephone (859) 263-3948.

EXECUTIVE COMPENSATION

The following table sets forth the total remuneration paid during the
last three years to our executive officers who earned over $100,000 in any of
those years. None of the named executive officers received perquisites with a
value exceeding 10% of their salary and bonus during any of the last three
years.

SUMMARY COMPENSATION TABLE

LONG TERM COMPENSATION
ANNUAL COMPENSATION RESTRICTED SECURITIES (#)
NAME AND ---------------------------------------- STOCK UNDERLYING
PRINCIPAL POSITION YEAR SALARY BONUS OTHER(1) AWARDS(2) OPTION/SARS(3)
- ------------------ ----- ---------- ---------- ----- ----------- -----------

William S. Daugherty 2004....... $ 258,175 $ 275,000 $ 4,231 25,000 500,000
President and CEO 2003....... 185,385 90,000 4,231 110,000 100,000
2002....... 144,616 -- 3,890 20,000 --

D. Michael Wallen 2004....... 207,692 275,000 1,330 25,000 500,000
Vice President and 2003....... 135,385 90,000 1,330 110,000 100,000
Secretary 2002....... 100,000 -- 1,211 20,000 --

William G. Barr III 2004....... 180,960 275,000 2,582 25,000 500,000
Vice President 2003....... 111,385 90,000 2,582 50,000 100,000
2002....... 76,000 -- 2,131 75,000 --

Michael P. Windisch 2004....... 95,096 55,000 -- 17,500 375,000
Chief Financial Officer 2003....... 67,500 15,000 -- 25,000 50,000
2002....... 15,777(4) -- -- -- --

- -----------------

(1) Represents assumed interest at a market rate of 4.75% per annum on
unsecured, non-interest bearing loans. See "Certain Relationships and
Related Transactions."

(2) Valued at (i) $4.48 per share for awards on December 20, 2004, (ii) $1.26
per share for awards of 60,000 shares to Messrs. Daugherty and Wallen on
April 2, 2003 (iii) $1.02 per share for awards of 50,000 shares to Messrs.
Daugherty, Wallen and Barr and 25,000 shares to Mr. Windisch on January 2,
2003 and (iv) $0.63 per share for awards in 2002.

(3) Reflects grants on (i) August 30, 2004, exercisable at $4.09 per share,
(ii) February 25, 2004, exercisable at $4.03 per share, and (iii) January
2, 2003, exercisable at $1.02 per share, subject in each case to vesting
conditions.

(4) Reflects salary from September 23, 2002, when Mr. Windisch commenced
employment.

STOCK AWARDS AND OPTIONS

We maintain three stock plans for the benefit of our directors,
officers, employees and, in the case of the second and third plans, certain
consultants and advisors. The first plan, adopted in 1997, provides for the
grant of options to purchase up to 600,000 common shares at prevailing market
prices, vesting over a period of up to five years and expiring no later than six
years from the date of grant. The second plan, adopted in 2001, provides for the
grant of options to purchase up to 3,000,000 common shares at prevailing market
prices, expiring no later than ten years from the date of grant. The third plan,
adopted in 2003, provides for the grant of stock awards and stock options for an
aggregate of up to 4,000,000 common shares. Stock awards may be subject to
vesting conditions and trading restrictions specified at the time of grant.
Option grants must be at prevailing market prices and may be subject to vesting
requirements over a period of up to ten years from the date of grant.

The following tables provides information about stock options granted
to our named executive officers during 2004 and their exercise of any stock
options during the year.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

INDIVIDUAL GRANTS
-----------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS EXERCISE
UNDERLYING GRANTED TO OR BASE
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED(1) FISCAL YEAR ($/SH) DATE
- ---- ------------ ------------ ---------- -----------

William S. Daugherty........... 150,000 7.6% $ 4.03 02/25/09
200,000 10.2 4.03 02/25/10
150,000 7.6 4.09 08/30/09
D. Michael Wallen.............. 150,000 7.6 4.03 02/25/09
200,000 10.2 4.03 02/25/10
150,000 7.6 4.09 08/30/09
William G. Barr III............ 150,000 7.6 4.03 02/25/09
200,000 10.2 4.03 02/25/10
150,000 7.6 4.09 08/30/09
Michael P. Windisch............ 75,000 3.8 4.03 02/25/09
200,000 10.2 4.03 02/25/10
100,000 5.1 4.09 08/30/09

- ---------------------

(1) Reflects (i) options granted in February 2004 and vesting 25% after one
year, 50% after two years and 100% after three years from the grant date,
(ii) options issued in February 2004 under long term incentive agreements
and vesting five years from the grant date and (iii) options granted in
August 2004 and vesting 50% after one year and 100% after two years from
the grant date. See "Management Agreements" below.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES

NUMBER OF VALUE OF
SHARES UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
ACQUIRED YEAR END (#) YEAR END ($)
UPON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE(1)
- ---- -------- ---------- ----------------- -------------

William S. Daugherty..................... -- -- 100,000 $ 355,000
500,000 261,000

D. Michael Wallen........................ -- -- 100,000 355,000
500,000 261,000

William G. Barr III...................... -- -- 100,000 355,000
500,000 261,000

Michael P. Windisch...................... -- -- 45,000 159,750
375,000 196,500

- ---------------------

(1) Based on the closing price of $4.57 for our common stock on the Nasdaq
SmallCap Market on December 31, 2004.

MANAGEMENT AGREEMENTS

General. During 2004, the Company entered into change of control
agreements, long term incentive agreements and indemnification agreements with
Messrs. Daugherty, Wallen, Barr and Windisch. The three types of agreement are
summarized separately below.

Change of Control Agreements. The change of control agreements entitle
our named executive officers to severance benefits if their employment is
terminated without cause or they resign for good reason following a

change of control. For this purpose, a change of control is generally defined as
the acquisition of 20% or more of our voting stock by any person or group, the
sale or lease of all or substantially all our assets to any person other than a
subsidiary or the reconstitution of our board of directors during any period of
12 consecutive months with individuals who were not directors at the beginning
of that period or whose nomination was not approved by a majority of the
directors in office at the beginning of that period. Cause is defined in the
agreements as conviction of a felony of any nature or a misdemeanor involving
embezzlement of corporate property. Good reason is generally defined as
diminution of the officer's authority, reduction of his compensation or failure
to grant salary increases at least substantially comparable with our other
senior executives. The severance benefits amount to four times the officer's
annual compensation, payable in a lump sum or installments at the officer's
election.

Long Term Incentive Agreements. The long term incentive agreements
entitle our named executive officers to incentive awards if they continue to
serve as executive officers of the Company until February 25, 2009 or until
their employment is terminated without cause or they resign for good reason
following a change of control. For this purpose, a change of control, a
termination without cause or a resignation for good reason have the same
definitions used in their change of control agreements described above. The long
term incentive awards amount to a cash bonus of one times the officer's annual
compensation, payable in a lump sum or installments at his election, and vesting
of options issued to each officer under our 2001 stock option plan, covering
200,000 common shares at an exercise price of $4.03 per share, representing the
closing price of our common stock on the date of the long term incentive
agreements. See "Stock Options" above.

Indemnification Agreements. The indemnification agreements entitle our
named executive officers to advancement or reimbursement of their legal
expenses, to the fullest extent permitted by law, if they are involved in
litigation as a result of performing services for the Company or other
enterprise at its request. The right to indemnification under the agreements is
conditioned on the meeting a specified standard of care, generally requiring the
officer to have acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the Company.

COMPENSATION COMMITTEE REPORT

The Company's executive compensation reflects market levels of cash
compensation, augmented with equity incentives designed to attract and retain
qualified executives with interests, as co-owners, identical to those of our
unaffiliated shareholders. The board's objective, reflected in recommendations
by the compensation committee, is to match these compensation components with
the achievements of the individual executives and their contributions to the
annual performance and strategic advances of the Company. In this way, the
committee believes that our compensation program enables us to balance the
relationship between compensation and performance in the best interests of the
shareholders.

The compensation committee based its recommendations for 2004
compensation on the substantial growth achieved by the Company in the last two
years across a broad range of performance scales. The committee considered that
during 2003, we increased our production by 51% and our total revenues by 227%
over the prior year, while adding 9,854 Mmcfe to our estimated proved reserves.
To support our growth, we doubled our capital base during 2003, while earning
$0.46 per weighted average basic share outstanding for the year. At the time of
its deliberations, the committee also considered substantial additional strides
already attained by the middle of 2004. These included pending initiatives that
ultimately added 34,703 Mmcfe to our estimated proved reserves, both through
accelerated drilling and strategic acquisitions covering approximately 90,000
acres near our core operating areas in the Appalachian Basin.

The committee recommended that the board recognize the contributions by
our executive officers with cash bonuses, stock awards and option grants to
supplement their base salaries. Although equity based awards provide a means of
reducing the Company's cash compensation expenses and increasing our executives'
proprietary interests in the Company, they also involve adverse tax consequences
for our executives. For that reason, the committee recommended greater reliance
on cash bonuses in compensation packages for 2004. Our chief executive officer
and other two senior officers each received a cash bonus of $275,000 in 2004,
along with stock awards totaling 25,000 common shares and five-year options to
purchase 300,000 common shares at exercise process ranging from $4.03 to $4.09
per share, reflecting the market price of our common stock at the time of the
grants. See "Summary Compensation Table" and "Stock Awards and Options" above.
The committee also recommended approval of the

long term incentive management agreements entered with our named executive
officers in February 2004. See "Management Agreements" above.

The committee believes that the executive compensation policies
implemented for 2004 through its recommendations serve the best interests of the
Company's shareholders and the long range goals of the Company.

This report has been approved by the following members of the compensation
committee:
JAMES K. KLYMAN CHARLES L. COTTERELL

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED SHAREHOLDER MATTERS

5% BENEFICIAL OWNERS AND MANAGEMENT OWNERSHIP

The following table shows the amount of our common stock beneficially
owned as of April 22, 2005 by each person known to beneficially own more than 5%
of our common shares, each of our directors and named executive officer and the
directors and named executive officers as a group. Each of our directors and
named executive officers listed below has an address c/o NGAS Resources, Inc.,
120 Prosperous Place, Suite 201, Lexington, KY 40509.

COMMON STOCK
BENEFICIALLY PERCENTAGE
5% BENEFICIAL OWNER OWNED OF CLASS
- ------------------- ------------ ----------

Wellington Management Company, LLP........................... 1,350,600(1) 8.45%
75 State Street, Boston, MA 02109

NAMED EXECUTIVE OFFICERS AND DIRECTOR
- -------------------------------------
William S. Daugherty......................................... 704,807(2) 4.37%
D. Michael Wallen............................................ 395,807(2) 2.45
William G. Barr III.......................................... 217,356(2) 1.35
Michael P. Windisch.......................................... 119,750(3) 0.75
Charles L. Cotterell......................................... 50,500(4) 0.32
James K. Klyman.............................................. 2,500(4) 0.02
Thomas F. Miller............................................. 3,000 0.02
All named executive officers and directors
as a group (7 persons)..................................... 1,493,720(5) 9.07

- ---------------------
(1) Based on a Schedule 13G filed with the SEC under the Exchange Act, the
reported shares are held of record by clients of Wellington Management
Company, LLP, which may be may be deemed to beneficially own the shares in
its capacity as investment adviser.

(2) Includes 137,500 shares issuable upon the exercise of vested stock options.

(3) Includes 63,750 shares issuable upon the exercise of vested stock options
and 5,000 shares issuable upon conversion of 10% convertible notes due May
1, 2007.

(4) Includes 2,500 shares issuable upon the exercise of vested stock options.

(5) Includes 481,250 shares issuable upon the exercise of vested stock options
and 5,000 shares issuable upon conversion of 10% convertible notes due May
1, 2007.

COMMON SHARES ISSUABLE UNDER PLANS OR ARRANGEMENTS

The following table shows the amount of our common stock issuable as of
December 31, 2004 under our equity compensation plans. For purposes of this
table, equity compensation plans are broadly defined to include stock award and
option plans, individual compensation arrangements and obligations under
warrants or options issued in financing transactions and property acquisitions.

EQUITY COMPENSATION PLAN INFORMATION

(C)
(A) NUMBER OF SECURITIES
NUMBER OF SECURITIES (B) REMAINING AVAILABLE
TO BE ISSUED WEIGHTED AVERAGE FOR FUTURE ISSUANCE
UPON EXERCISE OF EXERCISE PRICE OF UNDER EQUITY
OUTSTANDING OUTSTANDING COMPENSATION PLANS
OPTIONS, WARRANTS OPTIONS, WARRANTS (EXCLUDING SECURITIES
PLAN CATEGORY AND RIGHTS AND RIGHTS REFLECTED IN COLUMN [A])
- ------------------------------- -------------------- ----------------- ------------------------

Equity Compensation Plans
Approved by Shareholders(1)................. 2,385,000 $ 3.58 3,660,311

Equity Compensation Plans
Not Approved by Shareholders(2)............. 2,421,465 4.96 --
---------- ------- ----------

Total.................................... 4,806,465 $ 4.28 3,660,311
========== ======= ==========

- -------------------

(1) We have three equity compensation plans approved by our shareholders. Two
are stock option plans and the third is a stock award and stock option plan
for the benefit of our directors, officers, employees and, in the case of
the second and third plans, certain of our consultants and advisors. See
"Executive Compensation - Stock Awards and Options."
(2) These arrangements consist of warrants outstanding at December 31, 2004,
issued to institutional investors and investment bankers in our convertible
note and equity financings, unaffiliated consultants in consideration for
various services and counterparties in property acquisitions in
consideration for their interests in those properties.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

As of December 31, 2004, current and former directors, officers and
employees were indebted to the Company in the aggregate amount of $392,797. The
following table shows the amount of the indebtedness from our named executive
officers.

INVOLVEMENT OF LARGEST AMOUNT AMOUNT OUTSTANDING AT
NAME AND PRINCIPAL POSITION ISSUER OR SUBSIDIARY OUTSTANDING IN 2004(1) AT DECEMBER 31, 2004(1)
- --------------------------- ---------------------- ---------------------- -----------------------

William S. Daugherty Lender $ 205,559 157,262
Chairman, President and CEO

D. Michael Wallen Lender 138,395 90,659
Vice President

William G. Barr III Lender 164,760 117,024
Vice President

- ------------------

(1) Represents the unpaid balance of (i) five loans from 1998 through 2002,
bearing interest at 6% per annum and secured by the named executive
officers' interests in Drilling Programs, and (ii) non-interest bearing,
unsecured loans made throughout the course of their employment. See
"Executive Compensation - Summary Compensation Table."

SHAREHOLDER PROPOSALS FOR 2006 ANNUAL MEETING

Any proposal that a shareholder wishes to present for consideration at
our 2006 annual general meeting must be received by the Company at its principal
executive offices no later than March 1, 2006. This date will provide sufficient
time for consideration of the proposal for inclusion in our 2006 proxy
materials.

OTHER MATTERS

The board of directors has approved this proxy statement and the
accompany proxy card for solicitation of shareholder approval of the proposals
presented in these materials at our 2005 annual general meeting. The board knows
of no other matters to be presented at the meeting. If any additional matter
should be presented properly, it is intended that proxies will be voted in
accordance with the discretion of the named proxy holder.

Lexington, Kentucky By Order of the Board of Directors
April 28, 2005

William S. Daugherty
Chairman of the Board, President and
Chief Executive Officer

Form of Proxy

GENERAL MEETING OF SHAREHOLDERS OF

NGAS RESOURCES, INC.
(Name of Company)

TO BE HELD AT 625 Howe Street, Suite 700, Vancouver, British Columbia, Canada
V6C 2T6
(Location of Meeting)

ON Thursday; June 9, 2005 AT 2:00 PM (Pacific Time)
(Day of week) (Month/day/Year) (Time of Meeting)

The undersigned hereby appoints and directs William S. Daugherty (or,
alternatively, the following nominee of the undersigned: _____________________)
as proxy holder to vote the common shares held by the undersigned in NGAS
Resources at its 2005 annual general meeting, and any adjournment, on the
matters set forth, as follows:

This Proxy will be voted as specified. If no
specification is made, it will be voted FOR the proposals and at the discretion
of the proxy holder if any other business is properly brought before the
meeting.

- ------------------------------------------------------------------------------

Resolutions (For full details of each item, please see the enclosed Notice of
Meeting and Information Circular)

- --------------------------------------------------------------------------------------------------
For Against Withhold

1. Fixing the size of the Board of Directors at four:
- --------------------------------------------------------------------------------------------------
2. Election of Directors: Charles C. Cotterell,
William S. Daugherty, James K. Klyman and
Thomas F. Miller
- --------------------------------------------------------------------------------------------------
3. Ratification of Auditors: Kraft, Berger, Grill,
Schwartz, Cohen & March LLP
- --------------------------------------------------------------------------------------------------
4.
- --------------------------------------------------------------------------------------------------
5.
- --------------------------------------------------------------------------------------------------
6.
- --------------------------------------------------------------------------------------------------
7.
- --------------------------------------------------------------------------------------------------
8.
- --------------------------------------------------------------------------------------------------
9.
- --------------------------------------------------------------------------------------------------
10.
- --------------------------------------------------------------------------------------------------
11.
- --------------------------------------------------------------------------------------------------
12.
- --------------------------------------------------------------------------------------------------
13.
- --------------------------------------------------------------------------------------------------
14.
- --------------------------------------------------------------------------------------------------
15.
- --------------------------------------------------------------------------------------------------
16.
- --------------------------------------------------------------------------------------------------
17.
- --------------------------------------------------------------------------------------------------
18.
- --------------------------------------------------------------------------------------------------
19.
- --------------------------------------------------------------------------------------------------
20.
- --------------------------------------------------------------------------------------------------
21.
- --------------------------------------------------------------------------------------------------
22.
- --------------------------------------------------------------------------------------------------

SHAREHOLDER SIGN HERE:
-------------------------------------------------------

DATE SIGNED:
-----------------------------------------------------------------

THIS FORM MUST BE SIGNED AND DATED.
SEE IMPORTANT INSTRUCTIONS ON REVERSE.

INSTRUCTIONS FOR COMPLETION OF PROXY

1. This Proxy is solicited by the Management of the Company.

2. This form of proxy ("Instrument of Proxy") must be signed by you, the
Registered Shareholder, or by your attorney duly authorized by you in
writing, or, in the case of a corporation, by a duly authorized officer or
representative of the corporation; and if executed by an attorney, officer,
or other duly appointed representative, the original or a notarial copy of
the instrument so empowering such person, or such other documentation in
support as shall be acceptable to the Chairman of the Meeting, must
accompany the Instrument of Proxy.

3. If this Instrument of Proxy is not dated in the space provided, authority
is hereby given by you, the Registered Shareholder, for the proxyholder to
date this proxy seven (7) calendar days after the date on which it was
mailed to you, the Registered Shareholder, by Pacific Corporate Trust
Company.

4. A Registered Shareholder who wishes to attend the Meeting and vote on the
resolutions in person, may simply register with the scrutineers before the
Meeting begins. 5. A Registered Shareholder who is not able to attend the
Meeting in person but wishes to vote on the resolutions, may do the
following: (a) appoint one of the management proxyholders named on the
Instrument of Proxy, by leaving the wording appointing a nominee as is
(i.e. do not strike out the management proxyholders shown and do not
complete the blank space provided for the appointment of an alternate
proxyholder). Where no choice is specified by a Registered Shareholder with
respect to a resolution set out in the Instrument of Proxy, a management
appointee acting as a proxyholder will vote the resolution as if the
Registered Shareholder had specified an affirmative vote;

(b) appoint another proxyholder, who need not be a Registered Shareholder
of the Company, to vote according to the Registered Shareholder's
instructions, by striking out the management proxyholder names shown and
inserting the name of the person you wish to represent you at the meeting
in the space provided for an alternate proxyholder. If no choice is
specified, the proxyholder has discretionary authority to vote as the
proxyholder sees fit.

6. The securities represented by this Instrument of Proxy will be voted or
withheld from voting in accordance with the instructions of the Registered
Shareholder on any poll of a resolution that may be called for and, if the
Registered Shareholder specifies a choice with respect to any matter to be
acted upon, the securities will be voted accordingly. Further, if so
authorized by this Instrument of Proxy, the securities will be voted by the
appointed proxyholder with respect to any amendments or variations of any
of the resolutions set out on the Instrument of Proxy or matters which may
properly come before the Meeting as the proxyholder in its sole discretion
sees fit.

7. If a Registered Shareholder has submitted an Instrument of Proxy, the
Registered Shareholder may still attend the Meeting and may vote in person.
To do so, the Registered Shareholder must record his/her attendance with
the scrutineers before the commencement of the Meeting and revoke, in
writing, the prior votes.

To be represented at the Meeting, voting instructions must be DEPOSITED at the
office of "PACIFIC CORPORATE TRUST COMPANY" no later than forty eight ("48")
hours (excluding Saturdays, Sundays and holidays) prior to the time of the
Meeting, or adjournment thereof.

The mailing address of Pacific Corporate Trust Company is 625 Howe Street,
10(th) Floor, Vancouver, British Columbia, V6C 3B8,
and its fax number is (604) 689-8144.

IF A SHAREHOLDER I.D. AND SHAREHOLDER CODE APPEAR ON THE FACE OF
THIS PROXY IN THE ADDRESS BOX

REGISTERED HOLDERS ARE ABLE TO COMPLETE TELEPHONE VOTING AT
1-888-Tel-Vote (1-888-835-8683) OR

INTERNET VOTING AT http://www.stocktronics.com/webvote

SHAREHOLDER INFORMATION

ANNUAL MEETING LOCATION
700 Standard Life Building
625 Howe Street, Suite 700
Vancouver, British Columbia
Canada V6C 2T6

CORPORATE OFFICES
NGAS Resources, Inc.
120 Prosperous Place, Suite 201
Lexington, Kentucky 40509
Tel: (859) 263-3948
Fax: (859) 263-4228
Email: ngas@ngas.com
Web: www.ngas.com
Hours: 8 a.m. - 5:30 p.m. (Eastern) Mon. - Fri.

TRANSFER AGENT AND REGISTRAR
Pacific Corporate Trust Company
625 Howe Street, 10th Floor
Vancouver, British Columbia
Canada V6C 2T6
Tel: (604) 689-9853
Fax: (604) 689-8144
Email: pacific@pctc.com
Web: www.pctc.com
Hours: 8 a.m. - 4:00 p.m. (Pacific) Mon. - Fri.

ANALYST INQUIRIES
Michael P. Windisch
NGAS Resources, Inc.
120 Prosperous Place, Suite 201
Lexington, Kentucky 40509
Tel: (859) 263-3948
Fax: (859) 263-4228
Email: ngas@ngas.com

COMMON STOCK LISTING
Nasdaq SmallCap Market
Trading Symbol: NGAS
Newspaper Listing: NGAS

REGISTERED AND RECORDS OFFICE
Maitland & Company
700 Standard Life Building
625 Howe Street, Suite 700
Vancouver, British Columbia
Canada V6C 2T6
Tel: (604) 681-7474
Fax: (604) 681-3896

CANADIAN COUNSEL
Ronald Paton, Barrister & Solicitor
Maitland & Company
700 Standard Life Building
625 Howe Street, Suite 700
Vancouver, British Columbia
Canada V6C 2T6
Tel: (604) 681-7474
Fax: (604) 681-3896

U.S. COUNSEL
Stahl & Zelmanovitz
767 Third Avenue, 14th Floor
New York, New York 10017
Tel: (212) 826-6363
Fax: (212) 826-6402

SHAREHOLDER INQUIRIES
Shareholder Administration
NGAS Resources, Inc.
120 Prosperous Place, Suite 201
Lexington, Kentucky 40509 USA
Tel: (859) 263-3948
Fax: (859) 263-4228
Email: ngas@ngas.com
Web: www.ngas.com

PROXY