SOURCE: Far East Energy

June 06, 2007 06:00 ET

Far East Energy Receives Favorable Independent Engineering Report

HOUSTON, TX--(Marketwire - June 6, 2007) - Far East Energy Corporation (OTCBB: FEEC) announced the results of an independent review by Netherland, Sewell & Associates, Inc. (NSAI) of Far East Energy Corporation's coalbed methane (CBM) properties in its Shouyang Block in Shanxi Province, China, with approximately 500,000 acres (2000 square kilometers). NSAI has concluded that the No. 15 coal seam contains high permeability of 100 millidarcies, the gas content of the Shouyang Block is on the high end of CBM fields, and that potential gas rates of 1 million to 2 million cubic feet per day are possible in future horizontal wells.

"We are excited that the Netherland Sewell report has supported our conclusions as to high permeability and high gas content and that it further concludes that future wells drilled in an optimal pattern and benefiting from previous dewatering and enhanced drilling practices may be capable of producing 1 to 2 million cubic feet per day of gas," said Michael R. McElwrath, CEO and President of Far East. "This is great news."

The NSAI report also states in part that, "Due to the limited amount of production data currently available, the aforementioned production and reservoir characteristics, and the range of performances of other CBM basins, there is a wide range of potential individual well recoveries from Coal Seam 15 in the Shouyang Block. Our preliminary estimates of the range of gas recovery is 0.3 to 4.1 billion cubic feet (BCF) per well with a most likely and mean recovery estimate of 1.1 BCF and 1.8 BCF, respectively."

The full text of the Netherland, Sewell & Associates, Inc. report, which contains further information and qualifications, may be found on the website of Far East Energy at www.fareastenergy.com.

Far East Energy's operations include the Shouyang and Qinnan Blocks, which are part of its 1,057,650 acre (4,280 square kilometers) coalbed methane (CBM) project in Shanxi Province that Far East holds under farmouts from ConocoPhillips. Including its 264,863 acre (1,072 square kilometers) project in Yunnan Province, the CBM concessions of Far East Energy contain a land mass slightly larger than the State of Delaware. The Shanxi properties are strategically located next to China's two largest pipelines leading to the industrial centers of Shanghai and Beijing.

About Far East Energy Corporation

Based in Houston, Texas, with offices in Beijing, Kunming, and Taiyuan City, China, Far East Energy Corporation is focused on CBM exploration and development in China through its agreements with ConocoPhillips and China United Coalbed Methane Company, Ltd. (CUCBM).

About Netherland, Sewell & Associates

Netherland, Sewell & Associates, Inc. provides integrated consulting services encompassing geophysics, geology, petrophysics, engineering, reservoir modeling and economics. NSAI has performed geophysical, geologic and engineering studies of reservoirs around the globe -- from the North Sea to South America, from the North Slope to South Florida, and from West Africa to the Middle East and Indonesia -- for leading major integrated petroleum companies, both small and large independent oil and gas companies, and various financial institutions and government agencies. For more information about NSAI, please visit their website at www.netherlandsewell.com.

Statements contained in this press release that state the intentions, hopes, beliefs, anticipations, expectations or predictions of the future of Far East Energy Corporation and its management are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. It is important to note that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties. Actual results could differ materially from those projected in such forward-looking statements. Factors that could cause actual results to differ materially from those projected in such forward-looking statements include: the preliminary nature of well data, including permeability and gas content, and commercial viability of the wells; risk and uncertainties associated with exploration, development and production of oil and gas; drilling and production risks; our lack of operating history; limited and potentially inadequate cash resources; expropriation and other risks associated with foreign operations; anticipated pipeline construction and transportation of gas; matters affecting the oil and gas industry generally; lack of availability of oil and gas field goods and services; environmental risks; changes in laws or regulations affecting our operations, as well as other risks described in our Annual Report on Form 10-K and subsequent filings with the Securities and Exchange Commission.

Contact Information

  • Contact:
    David Nahmias
    Far East Energy Investor Relations
    901-218-7770
    Email Contact

    Warren Laird
    Vice President
    Email Contact
    CTA Integrated Communications
    303-665-4200