Far East Energy Announces Registered Direct Placement

HOUSTON, August 20, 2010 - Far East Energy Corporation (OTC Bulletin Board: FEEC) announced today
that it has agreed to sell an aggregate of approximately 105.5 million shares
of its common stock at a price of US$0.33 per share for aggregate gross
proceeds of approximately US$34.8 million in a registered direct offering.

"We intend to use the net proceeds from the offering to continue the
drilling, completion and testing of our coalbed methane wells in China and
for general corporate purposes," said Michael R. McElwrath, Chief Executive
Officer of Far East. Mr. McElwrath added, "We are particularly pleased with
the quality of the investor group, which consists primarily of several large,
fundamental, long-only mutual funds, with exceptional reputations in the
investment and energy communities."

The offering is made pursuant to the Form S-3 shelf registration
statement declared effective by the SEC on November 4, 2009. A prospectus
supplement related to the public offering has been filed with the SEC. The
offering is expected to close on or about August 24, 2010, subject to the
satisfaction of customary closing conditions.

Macquarie Capital (USA), Inc. acted as Far East's placement agent in
connection with the offering.

This press release does not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of these
securities in any jurisdiction or to any person in which or to whom such
offer, solicitation or sale would be unlawful. Any offer will be made only by
means of a prospectus, including a prospectus supplement, forming a part of
the effective registration statement. Copies of the prospectus supplement
together with the accompanying prospectus can be obtained at the SEC's
website at www.sec.gov or from Macquarie Capital (USA) Inc., 125 West
55th Street, New York, NY 10019.

Far East Energy Corporation

Based in Houston, Texas, with offices in Beijing, Kunming, and Taiyuan
City, China, Far East Energy Corporation is focused on coal-bed 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; certain of the proposed transactions with Arrow Energy
International Pte Ltd ("Arrow") 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 Arrow may not be
realized; the final amounts received by us from Arrow may be different than
anticipated; Arrow 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; the pipelines currently under consideration
may not be constructed, or if constructed may not be timely, or their routes
may differ from those currently anticipated; the pipeline and local
distribution/compressed natural gas companies may decline to purchase or take
our gas, or the timing of any definitive agreement may take longer than
anticipated and the terms may not as advantageous as expected; risk and
uncertainties associated with exploration, development and production of
coalbed methane; expropriation and other risks associated with foreign
operations; disruptions in capital markets effecting 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
SEC.

David Nahmias, +1-901-218-7770, dnahmias 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