(PEIX) Enters Into Merger Agreement With Aventine

Merger Connects Destination and Origin Market Strategies, Providing Synergies in
Ethanol Production and Marketing –

– Annual Combined Production Capacity of 515 Million Gallons –

– Combined Annual Ethanol Marketing Volume of Over 800 Million Gallons –

– Transaction Expected to Close in Q2 2015 –

– Conference Call to Discuss Transaction on Wednesday, January 7^th at 1:30 p.m. PT –

SACRAMENTO, Calif., Dec. 31, 2014  — Pacific Ethanol, Inc. (Nasdaq:PEIX), the leading producer and marketer of low-carbon renewable fuels in the Western United States, and Aventine Renewable Energy Holdings, Inc. (“Aventine”), a Midwest-based producer of ethanol and related co-products, announced they have entered into a definitive merger agreement under which Pacific Ethanol will acquire all of Aventine’s outstanding shares in a stock-for-stock merger transaction.

“With this transaction, Pacific Ethanol strengthens its unique production and marketing advantages by diversifying into two additional discrete markets and connecting its Western markets with Aventine’s Midwest and Eastern markets for low-carbon renewable fuels,” said Neil Koehler, CEO of Pacific Ethanol. “The merger offers a rare opportunity to combine the experience, market presence and diversification that Aventine brings with our industry leadership in Western US markets. It will complement our existing business as we balance assets across new regional markets, expand our footprint for the production and marketing of low-carbon renewable fuels, diversify our technology and increase our mix of co-products.”

“This transaction will more than double our annual ethanol production capacity, and it will establish Pacific Ethanol as the fifth largest producer and marketer of ethanol in the United States. Once closed, we expect the transaction to be immediately accretive to earnings with expected operational synergies and the expansion of our ethanol and co-product marketing business. We are impressed with the both the quality of Aventine’s assets and the seasoned employees operating the business, and we look forward to integrating our teams,” concluded Koehler.

“In late 2012, the new Aventine management team defined a very aggressive turnaround strategy,” stated Mark Beemer, CEO of Aventine. “Our mission has been accomplished with our plants achieving five new production records; over $30 million invested in the Pekin facilities, including coal-to-natural gas conversion; and additional capital investments in our Nebraska facilities. In 2014, Aventine achieved record earnings and successfully restarted its 155 million gallons of ethanol production in Nebraska. We look forward to making a successful transition of the business to Pacific Ethanol and bringing the combined strength of the two companies to the market.”

Under the terms of the merger agreement, Pacific Ethanol expects to issue approximately 17.75 million shares of its common stock upon closing in exchange for all of the issued and outstanding shares of Aventine’s common stock. Upon completion, existing Pacific Ethanol shareholders will own approximately 58% of the issued and outstanding shares of common stock of the combined entity, and Aventine will nominate two representatives to be named later to Pacific Ethanol’s board of directors, increasing the total board count to nine.

Aventine will be operated as Pacific Ethanol’s wholly-owned subsidiary. Aventine currently has $135 million in term loan debt.

Aventine’s ethanol production assets include its 100 million gallon per year wet mill and 60 million gallon per year dry mill located in Pekin, Illinois, and its 110 million gallon per year and 45 million gallon per year dry mills in Aurora, Nebraska. Combined with Pacific Ethanol’s current ethanol production capacity of 200 million gallons per year, the combined company will have a total ethanol production capacity of 515 million gallons per year, and together with Pacific Ethanol’s marketing business will sell over 800 million gallons of ethanol annually.

The closing of the transaction, which is expected to occur during the second quarter of 2015, is subject to customary and other closing conditions and regulatory approvals, as well as the approval of Pacific Ethanol’s and Aventine’s shareholders.

For Pacific Ethanol, Troutman Sanders LLP served as legal advisors and Craig-Hallum Capital Group LLC provided a fairness opinion to the Board of Directors of Pacific Ethanol. For Aventine, Akin Gump Strauss Hauer & Feld LLP served as legal advisors and RPA Advisors, LLC served as financial advisors.

Conference Call

The Company will host a conference call and live webcast on Wednesday, January 7^th at 1:30 p.m. Pacific Time to discuss the merger. To participate, interested parties should dial 1-877-847-6066 in the United States or 1-970-315-0267 from international locations, conference ID 60307901. A webcast of the conference call will be available at http://www.pacificethanol.net/investors with an accompanying slide presentation that may be accessed on that page and through the webcast link.

A playback of the call will be available until January 14^th by dialing 1-855-859-2056 within the United States or 1-404-537-3406 from international locations, passcode 60307901.

About Pacific Ethanol, Inc.

Pacific Ethanol, Inc. (PEIX) is the leading producer and marketer of low-carbon renewable fuels in the Western United States. Pacific Ethanol also sells co-products, including wet distillers grain (“WDG”), a nutritional animal feed. Serving integrated oil companies and gasoline marketers who blend ethanol into gasoline, Pacific Ethanol provides transportation, storage and delivery of ethanol through third-party service providers in the Western United States, primarily in California, Arizona, Nevada, Utah, Oregon, Idaho and Washington. Pacific Ethanol has a 96% ownership interest in PE Op Co., the owner of four ethanol production facilities. Pacific Ethanol operates and manages the four ethanol production facilities, which have a combined annual production capacity of 200 million gallons. These operating facilities are located in Boardman, Oregon, Burley, Idaho, Stockton, California and Madera, California. The facilities are near their respective fuel and feed customers, offering significant timing, transportation cost and logistical advantages. Pacific Ethanol’s subsidiary, Kinergy Marketing LLC, markets ethanol from Pacific Ethanol’s managed plants and from other third-party production facilities, and another subsidiary, Pacific Ag. Products, LLC, markets WDG. For more information please visit www.pacificethanol.com.

Cautionary Statement Regarding Forward-Looking Statements

Statements contained in this communication that refer to Pacific Ethanol’s estimated or anticipated future results, including estimated synergies, or other non-historical expressions of fact are forward-looking statements that reflect Pacific Ethanol’s current perspective of existing trends and information as of the date of this communication. Forward looking statements generally will be accompanied by words such as “anticipate,” “believe,” “plan,” “could,” “should,” “estimate,” “expect,” “forecast,” “outlook,” “guidance,” “intend,” “may,” “might,” “will,” “possible,” “potential,” “predict,” “project,” or other similar words, phrases or expressions. Such forward-looking statements include, but are not limited to, statements about the benefits of the acquisition of Aventine, including future financial and operating results, Pacific Ethanol’s or Aventine’s plans, objectives, expectations and intentions and the expected timing of completion of the transaction. It is important to note that Pacific Ethanol’s goals and expectations are not predictions of actual performance. Actual results may differ materially from Pacific Ethanol’s current expectations depending upon a number of factors affecting Pacific Ethanol’s business, Aventine’s business and risks associated with acquisition transactions. These factors include, among others, the inherent uncertainty associated with financial projections; restructuring in connection with, and successful closing of, the Aventine acquisition; subsequent integration of the Aventine acquisition and the ability to recognize the anticipated synergies and benefits of the Aventine acquisition; the ability to obtain required regulatory approvals for the transaction (including the approval of antitrust authorities necessary to complete the acquisition), the timing of obtaining such approvals and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction; the ability to obtain the requisite Pacific Ethanol and Aventine stockholder approvals; the risk that a condition to closing of the Aventine acquisition may not be satisfied on a timely basis or at all; the failure of the proposed transaction to close for any other reason; risks relating to the value of the Pacific Ethanol shares to be issued in the transaction; the anticipated size of the markets and continued demand for Pacific Ethanol’s and Aventine’s products; the impact of competitive products and pricing; the risks and uncertainties normally incident to the ethanol production and marketing industries; the difficulty of predicting the timing or outcome of pending or future litigation or government investigations; changes in generally accepted accounting principles; costs and efforts to defend or enforce intellectual property rights; successful compliance with governmental regulations applicable to Pacific Ethanol’s and Aventine’s facilities, products and/or businesses; changes in the laws and regulations; changes in tax laws or interpretations that could increase Pacific Ethanol’s consolidated tax liabilities; the loss of key senior management or staff; and such other risks and uncertainties detailed in Pacific Ethanol’s periodic public filings with the Securities and Exchange Commission, including but not limited to Pacific Ethanol’s “Risk Factors” section contained in Pacific Ethanol’s Form 10-Q filed with the Securities and Exchange Commission on November 12, 2014 and from time to time in Pacific Ethanol’s other investor communications. Except as expressly required by law, Pacific Ethanol disclaims any intent or obligation to update or revise these forward-looking statements.

Important Information for Investors and Stockholders

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. In connection with the proposed merger between Pacific Ethanol and Aventine, Pacific Ethanol will file with the Securities and Exchange Commission a registration statement on Form S-4 that will include a joint proxy statement of Pacific Ethanol and Aventine that also constitutes a prospectus of Pacific Ethanol. The definitive joint proxy statement/prospectus will be delivered to Pacific Ethanol’s and Aventine’s stockholders. INVESTORS AND SECURITY HOLDERS OF PACIFIC ETHANOL AND AVENTINE ARE URGED TO READ THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT WILL BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders will be able to obtain free copies of the registration statement and the definitive joint proxy statement/prospectus (when available) and other documents filed with the Securities and Exchange Commission by Pacific Ethanol through the website maintained by the Securities and Exchange Commission at http://www.sec.gov. Copies of the documents filed with the Securities and Exchange Commission by Pacific Ethanol will be available free of charge on Pacific Ethanol’s internet website at www.pacificethanol.net or by contacting Pacific Ethanol’s investor relations agency, LHA, at (415) 433-3777.

Participants in the Merger Solicitation

Pacific Ethanol, Aventine, their respective directors and certain of their executive officers and employees may be considered participants in the solicitation of proxies in connection with the proposed transaction. Information regarding the persons who may, under the rules of the Securities and Exchange Commission, be deemed participants in the solicitation of the Pacific Ethanol and Aventine stockholders in connection with the proposed merger will be set forth in the joint proxy statement/prospectus when it is filed with the Securities and Exchange Commission. Information about the directors and executive officers of Pacific Ethanol is set forth in its proxy statement for its 2014 annual meeting of stockholders, which was filed with the Securities and Exchange Commission on April 28, 2014. Information about the executive officers of Aventine is set forth in www.aventinerei.com. Additional information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus filed with the above-referenced registration statement on Form S-4 and other relevant materials to be filed with the Securities and Exchange Commission when they become available.

CONTACT: Company IR Contact:
         Pacific Ethanol, Inc.
         916-403-2755
         866-508-4969
         Investorrelations@pacificethanol.com

         IR Agency Contact:
         Becky Herrick
         LHA
         415-433-3777

         Media Contact:
         Paul Koehler
         Pacific Ethanol, Inc.
         916-403-2790
         paulk@pacificethanol.com

(LINE) 2015 Oil and Gas Capital Budget; Reduces Annual Distribution to $1.25 Per Unit

Reduces Oil and Gas Capital by Over 50%

Announces Strategic Alliance with GSO Capital Partners

Declares Monthly Distribution and Dividend of $0.1042 per Unit or Share

HOUSTON, Jan. 2, 2015  — LINN Energy, LLC (Nasdaq:LINE) (“LINN” or the “Company”) and LinnCo, LLC (Nasdaq:LNCO) (“LinnCo”) announced today that LINN’s Board of Directors has approved a 2015 budget which includes a 53% reduction in oil and natural gas capital expenditures to $730 million, from approximately $1.55 billion in 2014, and a reduction of the LINN distribution and LinnCo dividend to $1.25 per unit or share, from the previous level of $2.90 per unit or share, on an annualized basis. LINN expects to fund its total 2015 oil and natural gas capital program, along with the distribution, from internally generated cash flow.

“After careful consideration, LINN’s senior management proposed and the Board of Directors approved a 2015 budget that contemplates a significantly lower current crude oil price than in 2014. In order to solidify the Company’s financial position and regain a useful cost of capital, we have reduced the oil and natural gas capital budget and distribution while balancing cash flow and spending,” said Mark E. Ellis, Chairman, President and Chief Executive Officer.

Alliance with GSO Capital Partners

In addition, LINN announced that it has signed a non-binding letter of intent with private capital investor GSO Capital Partners LP (“GSO”), the credit platform of The Blackstone Group L.P. (NYSE:BX) (“Blackstone”), to fund oil and natural gas development (the “DrillCo Agreement”). Subject to final documentation, funds managed by GSO and its affiliates have agreed to commit up to $500 million with 5-year availability to fund drilling programs on locations provided by LINN. Subject to adjustments depending on asset characteristics and return expectations, GSO will fund 100% of the costs associated with new wells drilled under the DrillCo Agreement and is expected to receive an 85% working interest in these wells until it achieves a 15% internal rate of return on annual groupings of wells, while LINN is expected to receive a 15% carried working interest during this period. Upon reaching the internal rate of return target, GSO’s interest will be reduced to 5%, while LINN’s will increase to 95%.

“We are extremely pleased to announce a new strategic initiative today designed to allow LINN to be an active developer of assets with growth capital funded from a new financial partnership with GSO,” said Mr. Ellis. “This agreement creates a dynamic alliance, combining world-class expertise from a highly respected investor with LINN’s ability to acquire and develop oil and natural gas assets.”

Dwight Scott, Senior Managing Director of GSO Capital, commented, “We are excited to partner with LINN as it continues to grow its business. LINN is a leading operator with an exceptional undeveloped asset base, which is expected to generate significant value for the partnership.”

Strategic advantages for LINN:

• Allows LINN to develop assets without increasing capital intensity;
• Potential to add a steady and growing cash flow stream with no capital requirement;
• Increases LINN’s long term ability to fund all oil and natural gas development capital and the distribution from internally generated cash flow;
• Mitigates drilling risk;
• Potentially broadens acquisition universe; and
• Upon meeting the return hurdle, provides incremental low decline production growth for LINN.

2015 Oil and Natural Gas Capital Budget

LINN has approved a budget for 2015 which includes a 53% reduction in oil and natural gas capital expenditures to $730 million, from approximately $1.55 billion in 2014. The Company expects to fund its 2015 oil and natural gas capital program, along with the distribution, from internally generated cash flow. Key 2015 budget assumptions include:

• Average annual production of 1,110 – 1,235 MMcfe/d
  • 54% natural gas;
  • 32% oil;
  • 14% NGL;
• Overall decline rate of ~15%;
• Unhedged NYMEX oil price of $60 per Bbl;
• Unhedged NYMEX natural gas price of $3.50 per Mcf;
• NGL realization of 39% of NYMEX oil price, or approximately $23.40 per Bbl;
• Annualized distribution of $1.25 per unit;
• Does not consider potential upside associated with capital cost improvement as a result of low commodity prices;
• No assumed positive impact from acquisitions or the DrillCo Agreement; and
• Expected coverage ratio of 1.18x. LINN defines coverage ratio as net cash provided by operating activities after discretionary adjustments considered by the Board of Directors, divided by total distributions to unitholders.

“After transforming the Company’s asset base in 2014 toward a significantly lower overall decline rate, we were able to materially reduce capital in a lower commodity price environment but still expect projected cash flow to increase quarter over quarter during the course of 2015. Our budget projects a 1.18x coverage ratio at the new annualized distribution rate of $1.25 per unit with $730 million of oil and natural gas capital,” said Mr. Ellis.

The Company’s decrease in oil and natural gas capital is approximately half in response to lower commodity prices and half as a result of the divestiture of its higher decline Granite Wash assets and the majority of its Midland Basin assets in the Permian Basin, as well as reduced investment in other areas across its portfolio. Capital will be focused on lower-risk development and optimization projects including steam flood enhancement and expansions in California, natural gas drilling in the Jonah Field, Hugoton Basin and Piceance Basin, non-operated drilling in the Williston Basin, as well as Cotton Valley and Bossier development in East Texas and North Louisiana. A significant portion of LINN’s 2015 capital budget is dedicated to efficient and lower-risk optimization, workover and recompletion opportunities on existing oil and natural gas wells. Discretionary reductions for a portion of oil and natural gas development costs are estimated to be approximately $640 million, or 88%, of LINN’s 2015 oil and natural gas capital budget.

Hedging Update

The Company is hedged approximately 100 percent on expected natural gas production in 2015, 2016 and 2017, net of expected natural gas consumption related to its heavy oil operations in California. For expected oil production, LINN is hedged approximately 70 percent in 2015 and approximately 65 percent in 2016. The Company has hedged natural gas differentials in certain producing regions but has not hedged any of its exposure to oil differentials. The Company does not directly hedge NGL volumes. As of year-end 2014, LINN’s hedge book had an estimated mark-to-market value of approximately $2 billion.

Liquidity Update

LINN has current liquidity of approximately $2.2 billion. In December 2014, LINN and its wholly owned subsidiary Berry Petroleum Company, LLC (“Berry”) received unanimous approval from a combined total of 45 lenders to increase LINN’s borrowing base to $4.5 billion and reaffirm Berry’s borrowing base at $1.4 billion. The maximum credit amount under LINN’s credit facility is $4.0 billion and the commitment amount under Berry’s credit facility is $1.2 billion. The maturity date for the LINN and Berry credit facilities, along with LINN’s outstanding $500 million term loan, is April 2019.

Outlook for 2015

LINN believes its decreased 2015 capital budget, reduced distribution and conservative projected coverage ratio, along with its significant hedge portfolio, approximately $2.2 billion of liquidity and proposed strategic alliance with GSO position the Company to regain its cost of capital advantage in the marketplace. “Despite today’s challenging commodity price environment, we believe we are prepared to continue growing throughout 2015 and will look to take advantage of acquisition opportunities in the current market,” said Mr. Ellis. “In addition, we are also in the process of potentially forming an additional alliance with private capital sources similar to the DrillCo Agreement with GSO but focused on acquisition funding. This potential new partnership would give us access to acquisition funding in down markets and diversify LINN away from traditional debt and equity capital markets.”

Today’s announcement should position LINN to deliver an attractive yield given the current unit price and also position the Company for growth. The variables listed below demonstrate the potential coverage ratio upside and downside protection from the budgeted level of 1.18x given various scenarios:

• Oil prices between $50 – $95 produce coverage ratios between 0.95x – 1.98x
• NGL prices between $20 – $40 produce coverage ratios between 1.11x – 1.55x
• A 5% increase in production volumes produces a coverage ratio of 1.43x
• A 5% decrease in LOE and transportation expenses produces a coverage ratio of 1.31x
• A 5% decrease in capital costs produces a coverage ratio of 1.27x

Conference Call and Webcast

Management will host a conference call on Monday, January 5, 2015, at 10 a.m. Central (11 a.m. Eastern) to discuss today’s announcements and its outlook for 2015. Prepared remarks by Mark E. Ellis, Chairman, President and Chief Executive Officer, and Kolja Rockov, Executive Vice President and Chief Financial Officer, will be followed by a question and answer session. Supplemental slides have been posted to LINN’s website at www.linnenergy.com.

Investors and analysts are invited to participate in the call by dialing (855) 319-4076, or (631) 887-3945 for international calls, using Conference ID: 60430279. Interested parties may also listen over the Internet at www.linnenergy.com.

A replay of the call will be available on the Company’s website or by phone until 4:00 p.m. Central (5 p.m. Eastern), January 19, 2015. The number for the replay is (855) 859-2056, or (404) 537-3406 for international calls, using Conference ID: 60430279.

Monthly Distribution and Dividend

LINN declared a monthly cash distribution of $0.1042 per unit, or $1.25 per unit on an annualized basis, for all of its outstanding units. The distribution will be payable January 15, 2015, to unitholders of record as of the close of business on January 12, 2015.

LinnCo declared a monthly cash dividend of $0.1042 per common share, or $1.25 per share on an annualized basis, for all of its outstanding common shares. The dividend will be payable January 16, 2015, to shareholders of record as of the close of business on January 12, 2015.

Financial Advisor

Jefferies LLC acted as financial advisor to LINN for the DrillCo Agreement.

ABOUT LINN ENERGY

LINN Energy’s mission is to acquire, develop and maximize cash flow from a growing portfolio of long-life oil and natural gas assets. LINN Energy is a top-15 U.S. independent oil and natural gas development company, with approximately 7.8 Tcfe of proved reserves (pro forma for announced 2014 trades, acquisitions and divestitures) in producing U.S. basins as of December 31, 2013. More information about LINN Energy is available at www.linnenergy.com.

ABOUT LINNCO

LinnCo was created to enhance LINN Energy’s ability to raise additional equity capital to execute on its acquisition and growth strategy. LinnCo is a Delaware limited liability company that has elected to be taxed as a corporation for United States federal income tax purposes, and accordingly its shareholders will receive a Form 1099 in respect of any dividends paid by LinnCo. More information about LinnCo is available at www.linnco.com.

ABOUT BLACKSTONE AND GSO

Blackstone is one of the world’s leading investment and advisory firms with approximately $284 billion in assets under management as of September 30, 2014. It seeks to create positive economic impact and long-term value for investors, the companies it invests in, the companies it advises and the broader global economy. Blackstone does this through the commitment of extraordinary people and flexible capital. Blackstone’s alternative asset management businesses include the management of private equity funds, real estate funds, hedge fund solutions, credit-focused funds and closed-end funds. GSO, a division of Blackstone, is a leading credit-focused alternative asset manager, with approximately $70 billion of assets under management as of September 30, 2014. GSO has a global footprint with approximately 250 professionals among its offices in New York, Dublin, London and Houston. Further information is available at www.blackstone.com. Follow on Twitter @Blackstone.

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS

This press release includes “forward-looking statements.” All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the company expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements include, but are not limited to forward-looking statements about acquisitions, divestitures and trades, potential strategic alliances, timing and payment of distributions, and the expectations of plans, strategies, objectives and anticipated financial and operating results of the company, including the company’s drilling program, production, hedging activities, capital expenditure levels and other guidance included in this press release. These statements are based on certain assumptions made by the company based on management’s experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include risks relating to the company’s financial performance and results, availability of sufficient cash flow to pay distributions and execute its business plan, prices and demand for oil, natural gas and natural gas liquids, the ability to replace reserves and efficiently develop current reserves and other important factors that could cause actual results to differ materially from those projected as described in the company’s reports filed with the Securities and Exchange Commission. See “Risk Factors” in the company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases.

Any forward-looking statement speaks only as of the date on which such statement is made and the company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.

CONTACT: LINN ENERGY, LLC

         Investors & Media:

         Clay Jeansonne, Vice President - Investor Relations
         (281) 840-4193

         Zach Dailey, Director - Investor Relations
         (713) 904-6547

         Sarah Nordin, Public Relations & Media
         (713) 904-6605

(PWRD) “Going Private” Proposal at $20.00 per ADS

BEIJING, Jan. 2, 2015  — Perfect World Co., Ltd. (NASDAQ: PWRD) (“Perfect World” or the “Company”), a leading online game developer and operator based in China, today announced that its board of directors (the “Board”) has received a preliminary non-binding proposal letter dated December 31, 2014 from its founder and chairman of the Board, Mr. Michael Yufeng Chi, to acquire all of the outstanding shares of Perfect World not currently owned by him in a going private transaction for $20.00 per American Depositary Share (“ADS”) or $4.00 per ordinary share in cash. A copy of the proposal letter is attached hereto as Annex A.

Perfect World’s Board has formed a special committee of independent directors (the “Independent Committee”) consisting of three independent directors, Mr. Daniel Dong Yang, Dr. Bing Xiang and Mr. Han Zhang, to consider this proposal. The Independent Committee intends to retain a financial advisor and legal counsel to assist it in its work. The Board cautions the Company’s shareholders and others considering trading in its securities that the Board just received the preliminary non-binding proposal from Mr. Chi and no decisions have been made by the Independent Committee with respect to Perfect World’s response to the proposal. There can be no assurance that any definitive offer will be made, that any agreement will be executed or that this or any other transaction will be approved or consummated.

About Perfect World Co., Ltd. (http://www.pwrd.com)

Perfect World Co., Ltd. (NASDAQ: PWRD) is a leading online game developer and operator based in China.  Perfect World primarily develops online games based on proprietary game engines and game development platforms.  Perfect World’s strong technology and creative game design capabilities, combined with extensive knowledge and experiences in the online game market, enable it to frequently and promptly introduce popular games designed to cater changing customer preferences and market trends.  Perfect World’s current portfolio of self-developed online games includes massively multiplayer online role playing games (“MMORPGs”): “Perfect World,” “Legend of Martial Arts,” “Perfect World II,” “Zhu Xian,” “Chi Bi,” “Pocketpet Journey West,” “Battle of the Immortals,” “Fantasy Zhu Xian,” “Forsaken World,” “Empire of the Immortals,” “Return of the Condor Heroes,” “Saint Seiya Online,” “Swordsman Online,” “Holy King” and “Legend of the Condor Heroes;” an online casual game: “Hot Dance Party;” and a number of web games and mobile games.  While a majority of the revenues are generated in China, Perfect World operates its games in North America, Europe, Japan, Korea and Southeast Asia through its own subsidiaries.  Perfect World’s games have also been licensed to leading game operators in a number of countries and regions in Asia, Latin America, and the Russian Federation and other Russian speaking territories.  Perfect World intends to continue to explore new and innovative business models and is committed to maximizing shareholder value over time.

Safe Harbor Statements

Certain statements contained in this announcement may be viewed as “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual performance, financial condition or results of operations of the Company to be materially different from any future performance, financial condition or results of operations implied by such forward-looking statements. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. The Company undertakes no ongoing obligation, other than that imposed by law, to update these statements.

For further information, please contact

Perfect World Co., Ltd.
Vivien Wang – Vice President, Capital Market & Corporate Communications
Tel: +86-10-5780-5700
Fax: +86-10-5780-5713
Email: ir@pwrd.com
http://www.pwrd.com

Christensen Investor Relations
Patty Bruner
Tel: +1-480-614-3036
Fax: +1-480-614-3033
Email: pbruner@christensenir.com

Jung Chang
Tel: +852-2117-0861
Fax: +852-2117-0869
Email: jchang@christensenir.com

Annex A

Proposal Letter

December 31, 2014

The Board of Directors
Perfect World Co., Ltd.
Perfect World Plaza, Tower 306
86 Beiyuan Road, Chaoyang District
Beijing 100101, People’s Republic of China

Dear Sirs:

I, Michael Yufeng Chi, am pleased to submit this preliminary non-binding proposal to acquire all the outstanding ordinary shares of Perfect World Co., Ltd. (the “Company”) that are not already directly or indirectly beneficially owned by me in a going private transaction (the “Transaction”).

I believe that my proposal provides a very attractive opportunity to the Company’s shareholders. The proposal represents a premium of 25.7% to the Company’s closing price on December 30, 2014.

1. Buyer. I intend to form a transaction vehicle (“Buyer”) for the purpose of pursuing the Transaction.
2. Purchase Price. The consideration payable for each American Depositary Share (“ADSs,” each ADS representing five Class B ordinary shares of the Company) of the Company will be $20 in cash, or $4 in cash per ordinary share (in each case other than those ADSs or ordinary shares directly or indirectly held by myself that may be rolled over in the Transaction).
3. Funding. I intend to finance the Transaction with a combination of debt and equity capital. I expect commitments for the debt financing, subject to the terms and conditions set forth therein, to be in place when the Definitive Agreements (as defined below) are executed.
4. Due Diligence. I have engaged Orrick, Herrington & Sutcliffe LLP as international legal counsel. I believe that we will be in a position to complete customary legal, financial and accounting due diligence for the Transaction in a timely manner and in parallel with discussions on the definitive agreements.
5. Definitive Agreements. I am prepared to promptly negotiate and finalize definitive agreements (the “Definitive Agreements”) providing for the Transaction and related transactions. These documents will provide for representations, warranties, covenants and conditions which are typical, customary and appropriate for transactions of this type.
6. Process. I believe that the Transaction will provide superior value to the Company’s shareholders. I recognize that the Company’s Board of Directors (the “Board”) will evaluate the Transaction independently before it can make its determination to endorse it. Given the involvement of myself in the Transaction, I appreciate that the independent members of the Board will proceed to consider the proposed Transaction and that I will recuse myself from participating in any Board deliberations and decisions related to the Transaction.
7. In considering my offer, you should be aware that I am interested only in acquiring the outstanding shares of the Company that I do not already own, and that I do not intend to sell my stake in the Company to a third party.
8. Confidentiality. I will, as required by law, promptly file an amendment to Schedule 13D to disclose this letter. However, I am sure you will agree that it is in all of our interests to ensure that we proceed in a strictly confidential manner, unless otherwise required by law, until we have executed Definitive Agreements or terminated our discussions.
9. No Binding Commitment. This letter constitutes only a preliminary indication of my interest, and does not constitute any binding commitment with respect to the Transaction. A binding commitment will result only from the execution of Definitive Agreements, and then will be on terms and conditions provided in such documentation.

In closing, I would like to express my commitment to working together to bring this Transaction to a successful and timely conclusion. Should you have any questions regarding this proposal, please do not hesitate to contact me. Look forward to hearing from you.

Sincerely,

/s/ Michael Yufeng Chi
Michael Yufeng Chi