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Far East Energy Corp. announces huge rise in revenues

World Coal,

Far East Energy Corp., a US company that operates the Shoyang coalbed methane (CBM) production sharing contract in Shanxi Province, China, has announced its financial results for Q1 2014.

The results show a huge rise in revenue, on the back of its Chinese CBM operations.

CBM gas sales volumes in Q1 increased 73% from Q1 2013, following the multi-well drilling and hydraulic fracturing programme completed over the course of last year. At the same time, the gas contract price for 2014 has increased following negotiation with the company’s off-take partner, Shanxi Provincial Guoxin.  For Q1 2014, the company received a gas price averaging the equivalent of US$ 8.90 per million ft3, up 38% from the same period in 2013.  The actual base price paid for the company’s gas (before subsidies) increased by 42% from 1.2 RMB/m3 to 1.7 RMB/m3 As a result of these two factors, operating revenue in Q1 2014 was up 138% compared to the same period in 2013.

Commenting, CEO and President Michael McElwrath said, “It’s rewarding to see that the work put into the Shouyang Block in 2013 drilling and fracing new wells has resulted in a significant increase in production and revenues during the first quarter of 2014.”

The company has also announced the release of an updated independent engineering report prepared by Resource Investment Strategy Consultants (RISC), as of December 31, 2013.  The reserves estimates in the updated RISC report were prepared in accordance with the standards recognised by the Society of Petroleum Engineers (SPE) in the Petroleum Resources Management System (PRMS).

Adapted from press release by Sam Dodson

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