Far East Energy Corporation
Far East Energy Corporation is focused on coal bed methane exploration and development in China, with offices based in Houston, Beijing, Kunming, and Taiyuan。
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Far East Energy rallies 6% on coalbed methane gas estimate
Texas-based Far East Energy (OTCBB: FEEC) said Thursday an independent engineering report concluded the total coalbed methane gas in the company's Shouyang Block in Shanxi Province, China was 7.0 trillion cubic feet, at a best estimate.
The report, which covers three target coal seams, also estimated that covering the 487,000 acres under the company's Shouyang production sharing contract, the original-gas-in-place was a high of 8.5 trillion cubic feet. The low estimate was 5.4 trillion cubic feet.
"This report is a clear indicator of increased potential of the Shouyang Block, and we are excited about the results," said CEO and president Michael R. McElwarth.
The company said a report covering SEC reserves in the Shouyang Block as of December 31, 2010 will follow next year, at which time gas sales are expected to begin.
"All of this comes at a time when, based on current exchange rates, the pricing of our natural gas in China is approximately $6.00 to $6.45 per Mcf, which includes enacted and announced government subsidies and compares quite favorably to the November 3 Henry Hub US natural gas price of $3.35 per Mcf," added McElwarth.
In 2003, Far East Energy received data from ConocoPhillips for the northern 204,000 acres of the Shouyang Block, estimating original-gas-in-place at a low of 3.9 trillion cubic feet, a median of 4.8 Tcf and a high of 6.1 Tcf.
The current report was conducted by Netherland, Sewell & Associates.
Far East Energy is focused on coalbed methane exploration and development in China, with offices in Beijing, Kunming, and Taiyuan City, and headquarters in Houston, Texas. The company was up more than 6% on Thursday morning, trading at $0.66 as of 9:35am EST.
