SOURCE: Far East Energy

August 10, 2005 06:00 ET

Far East Energy Updates Progress on Its First Horizontal Wells in China

HOUSTON, TX -- (MARKET WIRE) -- August 10, 2005 -- Far East Energy Corporation (OTC BB: FEEC) announced that it has completed the vertical components of its two-well, multilateral horizontal coalbed methane well program in the Shouyang Block of Shanxi Province, China. The block is part of the 4,280 square kilometer (1,057,650 acres) coalbed methane (CBM) project in Shanxi Province that Far East holds under farmouts from ConocoPhillips.

The vertical drilling in the FCC HZ01 and FCC HZ02 wells has been completed to a targeted vertical depth of 563 meters (1,847 feet) and 675 meters (2,214 feet), respectively. Far East has taken core samples from both the #3 and #15 coal seams for both wells. Based on the results of the core analyses, Far East Energy has begun the horizontal drilling portion of the well program and is targeting the #15 coal seam since the core samples reflected greater stability in that seam. The drilling and wireline logging indicated a coal seam thickness of 2.4 meters (7.8 feet) and 4.0 meters (13.1 feet), for the #3 coal seam on the FCC HZ01 and FCC HZ02 wells, respectively. Additionally, the analysis indicated a thickness of 4.7 meters (15.4 feet) and 4.2 meters (13.8 feet), for the #15 coal seam on the FCC HZ01 and FCC HZ02 wells, respectively. The desorption analysis is in progress and will take about two months to complete.

Far East is now drilling horizontally with a goal of completing over 4,000 meters (13,100 feet) of horizontal drilling in the #15 coal seam in each well. Far East Energy anticipates that the first well (FCC HZ01) will require an additional 30 to 40 days to complete with additional time required to dewater and test the well for sustainable production of CBM. The second well project (FCC HZ02) will require an additional 30 to 45 days to complete the drilling after the FCC HZ01 well is complete.

"We are very pleased with the progress in the drilling operations for our first horizontal wells in Shanxi Province," said Michael R. McElwrath, CEO and President of Far East Energy. "In the next month or two, at most, we should begin to get a read on the commercial potential of these wells."

Based in Houston, Texas, with offices in Beijing, Kunming, and Taiyuan City, China, Far East Energy Corporation is focused on the acquisition of, and exploration for, coalbed methane through its agreements with ConocoPhillips and China United Coalbed Methane Company (CUCBM).

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 1993, 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: our lack of operating history; limited and potentially inadequate cash resources; risk and uncertainties associated with exploration, development and production of oil and gas; expropriation and other risks associated with foreign operations; matters affecting the oil and gas industry generally; lack of availability of oil and gas field goods and services; environmental risks; drilling and production 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.

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    Release No. 05-10