Exhibit 99.1

                                      NGSG
                        NATURAL GAS SERVICES GROUP, INC.






FOR IMMEDIATE RELEASE                       For More Information, Contact:
July 21, 2004                               Wallace Sparkman, CEO
                                            800-580-1828
                                            Jim Drewitz, Investor Relations
                                            972-355-6070


                      NATURAL GAS SERVICES GROUP ANNOUNCES
                        PRIVATE PLACEMENT FOR $5 MILLION

MIDLAND,  Texas, July 21, 2004 - Natural Gas Services Group, Inc. (AMEX:NGS),  a
leading  provider of equipment and services to the natural gas and oil industry,
announces  the Company has entered into a  definitive  agreement to sell 649,574
shares of its  restricted  common stock to an accredited  private  investor at a
price  slightly  below  market  value in a private  placement  that  will  raise
approximately $5 million in net proceeds to the Company.

The private placement includes  restricted common stock and does not include any
warrants.  These shares represent  approximately  11% of the outstanding  common
stock.  The  closing,  which is  subject to  customary  closing  conditions,  is
scheduled to occur on or before August 4, 2004.

NGS plans to use the net proceeds of the offering to further  advance the growth
of the Company's  rental fleet of natural gas  compressors,  working capital and
general  corporate  purposes,  including  possible  acquisition of strategically
located  compressor  companies.  The Company  has agreed to file a  registration
statement  with the SEC for the  resale of common  stock  within  the next sixty
days.

Wallace  Sparkman,  President and CEO said, "This is an outstanding  opportunity
with a private  investor we have a continuing  relationship  with. The placement
includes only  restricted  common stock and does not include any warrants or any
additional fees other than legal fees. This gives us additional  capital to meet
anticipated  needs resulting from future business  expansion and provide working
capital.   It  will   facilitate  our  ability  to  complete   future   business
opportunities as they become available."

About  Natural Gas Services  Group,  Inc NGS  manufactures,  fabricates,  sells,
leases and services  natural gas compressors  that enhance the production of oil
and gas wells.  The Company also  manufactures and sells flare systems and flare
ignition systems for plant and production facilities.

      For more information visit the Company's website at www.ngsgi.com .

Certain  statements  contained herein are "forward  looking"  statements as such
term is defined in the Private Securities Litigation Reform Act of 1995. Because
statements include risks and uncertainties, actual results may differ materially
from those  expressed  or implied and  include,  but are not  limited to,  those
discussed in filings by the Company with the Securities and Exchange Commission.
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