Far East Energy to Submit Draft Development Plan for Shouyang Block Soon
Far East Energy Corporation (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, confirmed Thursday 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 11, production had reached 2,256,466 cubic feet per day (2,256 MMcf/d), following a period of expected steady production growth.
This is up 11 percent from the production figure released Feb. 12, and is over 3 times higher than the average 738 MMcf/d produced for the week ending Nov. 12, 2013. Water production for March 11 was 3,763 barrels per day, compared to 3,414 barrels of water per day on Nov. 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/MMcf gas price that we are now receiving.”
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.