Far East Energy Updates on Operations at Shouyang Block CBM Project

Far East Energy Corporation, Operator of the Shouyang Block Coalbed Methane (CBM) Production Sharing Contract (PSC) in Shanxi Province, People’s Republic of China, announced that an additional 21 wells have been commenced since July 31, bringing to 74 the total number of wells that have spud in 2013. Also, 32 additional wells have been fraced since July 31, bringing to 58 the number of wells fraced in 2013.

Of the 74 wells that have spud thus far in the 2013 drilling program, 47 are new production wells in the core 1H Production Area, and 27 are appraisal wells which have confirmed the lateral extension of the high-permeability and high gas content #15 coal seam across the Shouyang Block.

More importantly, in terms of making progress towards significant gas production from Shouyang, as of Oct. 29, of the 58 wells fraced this year, 51 have been production wells in the 1H Production Area, including 28 fraced since the end of July 2013. In addition, 7 appraisal wells have been fraced this year, including 4 since July 31. Twelve further wells are scheduled to be fraced over the next two to three weeks, ten of which are production wells.

Commenting, CEO Michael McElwrath said, “The 2013 drilling program has already more than doubled that of any prior year in terms of wells spudded and will soon more than double the number of production wells fraced in any previous year. But the true measure lies in water produced as we strive to reach critical desorption pressure (CDP) across a broad area thereby achieving a meaningful gas saturation and attendant gas production. And since mid-June when the first new wells began pumping, water production in the 1H Production Area has increased by 80 to 85 percent while the number of wells on pump to date has increased by approximately 30 percent and CDP is now beginning to be achieved in a number of discrete areas.”


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