Far East Energy Announces Completion of Gathering System, Nomination of First Gas Sales, and Anticipated Payment Before December 31

HOUSTON, December 21, 2010 - Far East Energy Corporation (OTC Bulletin Board: FEEC) today announced
that the Company and its Chinese partner, CUCBM, have initiated the process
for nomination of initial gas for sales, with delivery to occur between late
December and January 20, 2011. In accordance with the Gas Sales Agreement,
Shanxi Guoxin Energy Development Group, the Purchaser, will prepay for gas
volumes each month when volumes are nominated. Thus, it is anticipated that
first payment will occur before December 31, as previously projected by Far
East. The initial nomination of gas covers gas produced from wells that will
be connected to the gathering system before year-end.

FEEC also stated that the second-stage compressor has arrived on site for
immediate installation. Delivery of the first-stage compressors will be
accepted before year-end. Final commissioning and initial delivery of gas is
scheduled to occur between January 15 and January 20, although some gas may
be delivered directly to second stage compression before December 31.

FEEC also reported that it has drilled 9 additional wells since August
31, 2010; is currently drilling seven more wells, one of which is a parameter
well approximately 20 kilometers to the south of the 1H Pilot Area; and is in
the process of completing fracture stimulation operations on a total of 11
wells.

In addition to the Pilot Area extension wells, the SYS-02 parameter well,
being drilled 20 kilometers south of the 1H Pilot Area will test the
southward extension of the high permeability the company has discovered in
the northern part of the Shouyang Block. This well has just spudded and
should be testing the #15 coal seam in early January 2011. Far East has
previously drilled a series of parameter wells to the west and southwest of
its Pilot Area with permeability in the P7 parameter well, some 22 kilometers
to the west, testing at approximately 100 millidarcies.

Michael R. McElwrath, Far East CEO and President said, "Clearly the
Company is pleased to report that in the 3.5 months since its 2010/2011
drilling program raise, 16 of the 60 wells planned at that time have either
been drilled and are being fraced, or are currently underway, keeping us
precisely on schedule. However, the biggest news of all is that the gas
nomination process has commenced, and first payment for gas should be
forthcoming before year-end." McElwrath added, "FEEC continues to check off
major milestones according to projections, and we wish to thank all of our
investors for their support."

Far East Energy Corporation

Based in Houston, Texas, with offices in Beijing, Kunming, and Taiyuan
City, China, Far East Energy Corporation is focused on coalbed methane
exploration and development in China.

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: there can be no
assurance as to the volume of gas that is ultimately produced or sold from
our wells; due to limitations under Chinese law, we may have only limited
rights to enforce the gas sales agreement between Shanxi Province Guoxin
Energy Development Group Limited and China United Coalbed Methane
Corporation, Ltd., to which we are an express beneficiary; pipelines and
gathering systems needed to transport our gas may not be constructed, or if
constructed may not be timely, or their routes may differ from those
anticipated; the pipeline and local distribution/compressed natural gas
companies may decline to purchase or take our gas, or we may not be able to
enforce our rights under definitive agreements with pipelines; conflicts with
coal mining operations or coordination of our exploration and production
activities with mining activities could adversely impact or add significant
costs to our operations; certain of the proposed transactions with Dart
Energy (formerly Arrow Energy) may not close on a timely basis or at all,
including due to a failure to satisfy closing conditions or otherwise; the
anticipated benefits to us of the transactions with Dart Energy may not be
realized; the final amounts received by us from Dart Energy may be different
than anticipated; Dart Energy may exercise its right to terminate the Farmout
Agreement at any time; the Chinese Ministry of Commerce ("MOC") may not
approve the extension of the Qinnan PSC on a timely basis or at all; our
Chinese partner companies or the MOC may require certain changes to the terms
and conditions of our PSC in conjunction with their approval of any extension
of the Qinnan PSC; our lack of operating history; limited and potentially
inadequate management of our cash resources; risk and uncertainties
associated with exploration, development and production of coalbed methane;
expropriation and other risks associated with foreign operations; disruptions
in capital markets affecting fundraising; matters affecting the energy
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 2009 Annual Report and subsequent filings with the Securities and
Exchange Commission.

Investor Relations, +1-281-606-1600, Investorrelations at fareastenergy.com, or Bruce Huff, +1-832-598-0470, bhuff at fareastenergy.com, or Catherine Gay, +1-832-598-0470, cgay at fareastenergy.com, all of Far East Energy Corporation