Far East Energy Receives Netherland, Sewell & Associates, Inc. Report of 66% Increase in Net Contingent Gas Resources in the Shouyang Bloc
By Far East Energy Corporation, PRNEThursday, July 21, 2011
HOUSTON, July 22, 2011 -
Far East Energy Corporation (OTC BB: FEEC) today
announced the results of an independent report prepared by
Netherland, Sewell & Associates, Inc. (”NSAI”) evaluating, as
of June 30, 2011, the net contingent gas resources and Net Present
Value at 10% Discount (”NPV10″) of the net contingent cash flow for
the three target coal seams in Far East Energy’s 485,000 acre (1960
square kilometers) Shouyang Block, situated in Shanxi Province,
China.
The report, which is subject to certain limitations and
assumptions described therein, gives a Best Estimate of NPV10 of
$1.23 billion, which reflects a 66% increase over the previously
prepared NSAI report as of December 2010; a High Estimate of $2.11
billion, which reflects a 44% increase; and a Low Estimate of
$319.30 million, which reflects a 143% increase.
“Obviously, this is an exhilarating report. It reflects
the great potential of the Shouyang Block project,” said Michael R.
McElwrath, CEO and President of Far East. “These estimates not only
reinforce the belief we have had in this project since the
beginning, but it also better defines the economic potential of the
Shouyang Block. As you may recall when we released the
December 2010 NSAI report we stated that it was our hope and belief
that the numbers then reported by NSAI, were just the beginning
indicators of the Shouyang Block’s vast resource potential.
Now, with the receipt of the latest NSAI report, a mere six
months later, this is being borne out. As the Company
continues its development of the Shouyang Block project, with
operations now under the oversight of David Minor, Executive
Director of Operations, we believe we are well positioned to enter
the next development phase and expect to see increased well-by-well
gas rates coupled with sustainability.”
The full text of the NSAI Net Contingent Gas Resources and Net
Contingent Cash Flows report can be found on the Company’s website
at:
Information regarding the Operations Update Conference Call
which is scheduled for 11:00 a.m. EDT (10:00 a.m. CDT) can also be
found on the Company’s website.
Contingent resources do not constitute SEC reserves and are
defined as those quantities of petroleum which are estimated, as of
a given date, to be potentially recoverable from known
accumulations, but for which the applied project is not yet
considered mature enough for commercial development because of one
or more contingencies. The estimates in the NSAI report were
prepared in accordance with the definitions and guidelines set
forth in the 2007 Petroleum Resources Management System approved by
the Society of Professional Engineers. The resources shown in
the NSAI report are estimates only and should not be construed as
exact quantities. Readers are urged to read the report in its
entirety.
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.
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
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; the fracture stimulation program may not be successful in
increasing gas volumes; 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; additional wells may not be drilled, or if
drilled may not be timely; additional 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 our production sharing contracts (”PSCs”) on a timely
basis or at all, or, if so, on commercially advantageous terms; our
Chinese partner companies or the MOC may require certain changes to
the terms and conditions of our PSCs in conjunction with their
approval of any extension of our PSCs, including a reduction in
acreage; 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; proved reserves may not be reported in a timely manner or
at all and, if reported, may be smaller than anticipated; our
inability to extract or sell all or a substantial portion of our
estimated Contingent Resources; we may not satisfy requirements for
listing our securities on a securities exchange; 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 2010 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
Tags: China, Far East Energy Corporation, Houston, July 22, texas
