MEDIA RELEASE PR37684
Far East Energy Issues Update on Agreement With Arrow Energy
HOUSTON, Dec. 23 /PRNewswire-AsiaNet/ --
Far East Energy Corporation (OTC Bulletin Board: FEEC) through its wholly
owned subsidiary Far East Energy (Bermuda), Ltd. (FEEB), and Arrow Energy
International Pte Ltd (AEI), will continue until further notice their Farmout
Agreement whereby, subject to the satisfaction of certain conditions, Arrow
would farm-in to a 75.25% operating interest in FEEB's interest in the Qinnan
Coalbed Methane Production Sharing Contract, in Shanxi Province, China. In
March 2009, AEI invested US$10 million in FEEB, through an exchangeable note
investment, and simultaneously entered into the Farmout Agreement. Interest on
the note is accruing at a rate of 8% per annum, effective October 16, 2009, and
the note matures in mid-March 2011. The note remains exchangeable at AEI's
option at any time prior to maturity, based on a price of 47.5 cents (US) per
share of Far East Energy stock, although the warrant issued in connection with
the transaction has expired in accordance with its terms.
The Farmout Agreement may be terminated at any time by FEEB or AEI by
written notice to the other party. Neither FEEB nor Arrow has indicated any
intention of serving such notice, and the parties are in discussions as to
possible additional or alternative ways to cooperate.
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.
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: pipelines may not
be constructed or their routes may differ from those mentioned; pipeline and
local distribution/CNG companies may decline to purchase or take our gas; the
gas produced at our wells may not increase to commercially viable quantities
or may decrease; we may have insufficient capital to develop the Shouyang
field; weather may significantly delay the planned drilling program; wells
may be damaged or adversely impacted during the production process, resulting
in decreases in the amount of gas produced, or that can be produced; certain
proposed transactions with 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 transactions with Arrow may not be realized;
the final amounts received by us from Arrow may be different than
anticipated; Chinese Ministry of Commerce (MOFCOM) may not approve the
extensions of the Qinnan Production Sharing Contract (Qinnan PSC) on a timely
basis or at all; PetroChina or MOFCOM may require certain changes to the
terms and conditions of the Qinnan PSC in conjunction with their approval of
any extension; our lack of operating history; limited and potentially
inadequate management of our cash resources; risk and uncertainties
associated with exploration, development and production of CBM; 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
Annual Report on Form 10-K for2008 and subsequent filings with the Securities
and Exchange Commission.
SOURCE: Far East Energy Corporation
CONTACT: David Nahmias,
+1-901-218-7770, dnahmias@fareastenergy.com, or
Bruce Huff,
+1-832-598-0470, bhuff@fareastenergy.com, or
Catherine Gay,
+1-832-598-0470, cgay@fareastenergy.com,
all of Far East Energy Corporation
NEWS 
