"We are excited that the Netherland Sewell report has supported our conclusions as to high permeability and high gas content and that it further concludes that future wells drilled in an optimal pattern and benefiting from previous dewatering and enhanced drilling practices may be capable of producing 1 to 2 million cubic feet per day of gas," said Michael R. McElwrath, CEO and President of Far East. "This is great news."
The NSAI report also states in part that, "Due to the limited amount of production data currently available, the aforementioned production and reservoir characteristics, and the range of performances of other CBM basins, there is a wide range of potential individual well recoveries from Coal Seam 15 in the Shouyang Block. Our preliminary estimates of the range of gas recovery is 0.3 to 4.1 billion cubic feet (BCF) per well with a most likely and mean recovery estimate of 1.1 BCF and 1.8 BCF, respectively."
The full text of the Netherland, Sewell & Associates, Inc. report, which contains further information and qualifications, may be found on the website of Far East Energy at www.fareastenergy.com.
Far East Energy's operations include the Shouyang and Qinnan Blocks, which are part of its 1,057,650-acre (4,280 square kilometers) coalbed methane (CBM) project in Shanxi Province that Far East holds under farmouts from ConocoPhillips. Including its 264,863-acre (1,072 square kilometers) project in Yunnan Province, the CBM concessions of Far East Energy contain a land mass slightly larger than the State of Delaware. The Shanxi properties are strategically located next to China's two largest pipelines leading to the industrial centers of Shanghai and Beijing.
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 through its agreements with ConocoPhillips and China United Coalbed Methane Company, Ltd. (CUCBM).
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.
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