Far East Energy Corp. (OTC: 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, has announced that as a result of negotiations concluded December 6, 2013 with its Chinese partner, China United Coalbed Methane Corp. (CUCBM), the parties have extended the exploration period of the portion of the Shouyang Block identified as "Area B" until June 30, 2016, and have agreed that Far East will drill at least 39 additional wells in Area B by June 30, 2016. The company also announced that there has been a large increase in gas production, with gas production now exceeding 1 million cubic feet per day.
The parties have agreed to revise certain related terms of the PSC to reflect this agreement and intend to do so within 90 days. Area B is significantly larger, at 1103.1 km2 (272,581.95 acres), than the company's 1H core production area which contains 64.7 km2 (15,987 acres).
Commenting, CEO Mike McElwrath said, "The primary impact of this extension is to allow additional time to establish Chinese resources, thereby providing further assurances of our ability to retain the acreage to the PSC's expiration in 2032."
As of December 12, 2013, gas production has risen to over 1 million cubic feet per day, and now stands at 1,034,038 cubic feet per day (1,034Mcf/pd). Average production for the seven days ending December 12, 2013 was 957.65 Mcf per day, representing a 30% increase over production for the week ended November 12, 2013, during which production averaged 738 Mcf/pd.
Far East is based in Houston.
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