Far East Energy Announces Gas Production Surpasses 2.25 Million Per Day, ODP Progress
HOUSTON, March 13, 2014 /PRNewswire/ -- Far East Energy Corporation (OTCBB:FEEC), the U.S. listed company that operates the Shouyang Block Coalbed Methane (CBM) Production Sharing Contract (PSC) in Shanxi Province, People's Republic of China, confirms an ongoing increase in gas production from the Shouyang Block. Submission of the draft Overall Development Plan (ODP) for the core production area at Shouyang is also expected in the near future.
Management is pleased to announce that, as of March 11th, production had reached 2,256,466 cubic feet per day (2,256 Mcf/d), following a period of expected steady production growth.
This is up 11% from the production figure released February 12th, and is over 3 times higher than the average 738 Mcf/d produced for the week ending November 12, 2013. Water production for March 11th was 3,763 barrels per day, compared to 3,414 barrels of water per day on November 12, 2013.
Commenting, CEO Michael McElwrath said, "We continue to take a conservative approach to the rate of increase of production from Shouyang and are gradually allowing gas production to rise, while optimizing continued water production – a classic approach to CBM production; and thus we are very pleased that we have nevertheless seen a tripling in gas production in the past 4 months."
In addition, following completion of the key documentation by FEEC, management expects the draft ODP for the acreage encompassing the 1H Production Area to be submitted to the National Development and Reform Commission (NDRC) within a matter of weeks. This would be the prelude to the award of a "Road Pass" ODP potentially by as early as mid-summer, prior to eventual formal ODP approval.
McElwrath continued, "We look forward to completion of the ODP process, but would also note that we have been producing and selling gas on a pre-ODP basis since 2011 and are already seeing the combined benefits of higher gas production and approximately $9/Mcf gas price that we are now receiving."
Far East Energy Corporation
Based in Houston, Texas, with offices in Beijing, 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, estimates, 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, including that the amendment to the PSC may not be entered into or if entered into may not be on the same terms as originally agreed upon by the parties. 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: the preliminary nature of well data, including permeability and gas content; there can be no assurance as to the volume of gas that is ultimately produced or sold from our wells; the fracture stimulation and drilling programs 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, 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; 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; our inability to extract or sell all or a substantial portion of our reserves and other 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 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and subsequent filings with the Securities and Exchange Commission.
SOURCE Far East Energy Corporation