for Far East common stock at an exchange price of US $0.475 per share - 500 Beiträge pro Seite

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FEN

Additionally, as part of the strategic alliance, Arrow will immediately acquire
an exchangeable note from Far East for US $10 million, which will automatically
be exchanged for Far East common stock at an exchange price of US $0.475 per share


soeben

(PR NEWSWIRE) Far East Energy Announces Strategic Relationship and Total Fundin
g of up to $63 Million
Far East Energy Announces Strategic Relationship and Total Funding of up to $63
Million

HOUSTON, March 16 /PRNewswire-FirstCall/ -- Far East Energy Corporation (OTC Bu
lletin Board: FEEC) announced the formation of a strategic alliance with Arrow E
nergy International Pte Ltd. ("Arrow"), the Singapore-based international arm of
Arrow Energy Ltd., a large Australian coalbed methane ("CBM") producer. As par
t of the strategic alliance, under a farm-out agreement, Arrow will pay Far East
US $8 million in cash, and Far East will assign to Arrow a 75.25% share of Far
East's participating interest in the Qinnan Production Sharing Contract ("PSC")
to develop CBM resources in the Shanxi province of China. The farm-out agreemen
t is subject to certain conditions precedent, including approval by appropriate
Chinese authorities. Arrow will become the operator under the Qinnan PSC and fun
d all exploration costs during the exploration period, including Far East's rema
ining 24.75% participating interest, until Arrow has incurred up to US $30.0 mil
lion of total spending on exploration. If the Chinese authorities ultimately ap
prove an Overall Development Plan ("ODP") for development of all, or a portion o
f, the block, Arrow will pay Far East a bonus of US $8 million.

Initially, it is intended that a 2009 exploration program of US $6 million be s
ubmitted for approval by the relevant Chinese authorities. Far East and Arrow b
elieve this work program will aggressively accelerate the parties' understanding
of the potential of the Qinnan Block.

Additionally, as part of the strategic alliance, Arrow will immediately acquire
an exchangeable note from Far East for US $10 million, which will automatically
be exchanged for Far East common stock at an exchange price of US $0.475 per sh
are upon the approval of the Qinnan farm-out agreement by the Chinese authoritie
s and the satisfaction of certain other conditions. Upon exchange of the note,
Arrow will own approximately 21.05 million shares of Far East common stock (repr
esenting approximately 11.54% of then outstanding shares) and will become the co
mpany's largest shareholder. If the conditions under the farm-out agreement are
not satisfied by October 15, 2009 or a mutually agreed later date, then the not
e will remain outstanding and mature in March 2011. In addition, as part of the
strategic alliance, Far East issued warrants to Arrow to purchase up to 7.42 mil
lion shares of Far East common stock at an exercise price of US $1.00 per share.
The warrants are for a term of 18 months and can be exercised at any time foll
owing the approval of the Qinnan farm-out agreement.

"This transaction successfully culminates a strategy announced several months a
go targeted at consummating a strategic transaction that would bring us the requ
ired capital to advance exploration of our significant holdings in China, while
at the same time securing additional technical resources," said Michael R. McElw
rath, CEO of Far East Energy. "Arrow's known expertise in coalbed methane and i
ts financial strength should enable aggressive exploitation of the great potenti
al of our 572,000 acre (2,300 square kilometers) Qinnan Block. In turn, that wi
ll allow Far East to focus on achieving production from our 484,000 acre (1,900
square kilometers) Shouyang Block, which we continue to consider to be a signifi
cant potential prospect for China's CBM industry. Arrow's financing of explorat
ion costs in the Qinnan Block is anticipated to facilitate more rapid exploratio
n than we could do alone. Perhaps more importantly, Arrow's human and financial
resources in CBM exploration and development should enhance overall development
of China's CBM resources, making them an important partner."

McElwrath continued, "We are extremely pleased that, in a difficult financial m
arket, we have been able to secure funding while minimizing stockholder dilution
. If we receive Chinese approval of an ODP for Qinnan, the potential value to F
ar East of the strategic alliance will be up to approximately US $63.4 million i
ncluding all fixed and contingent cash payments to be made to Far East, Arrow's
funding of up to US $30 million of exploration costs, and the optional exercise
of Arrow's warrants. We look forward to working with Arrow to create an alliance
that should become a significant force in the development of coalbed methane re
sources."

Arrow Energy Chief Executive Officer, Nick Davies, said, "I am very pleased tha
t we have been able to reach this agreement with FEEC. The Qinnan block represen
ts, in Arrow's view, one of the best prospects for near-term commercial CBM prod
uction in China, and we expect Qinnan to become a material project within the Ar
row portfolio. We look forward to working with FEEC and our Chinese partners at
CUCBM and PetroChina on this exciting project. This is an important step in the
strategic expansion of Arrow into international markets."

More information on these transactions can be obtained in a Form 8-K to be file
d by Far East with the Securities and Exchange Commission without cost at the In
ternet website maintained by the Securities and Exchange Commission at www.sec.g
ov.

Far East Energy Corporation
Based in Houston, Texas, with offices in Beijing, Kunming, and Taiyuan City, Ch
ina, Far East Energy Corporation is focused on CBM exploration and development i
n China through its agreements with ConocoPhillips and China United Coalbed Meth
ane Company, Ltd.

Arrow Energy Ltd
Arrow Energy Ltd. is an emerging global leader in coal seam gas development wit
h an expanding business presence throughout eastern Australia, China, India, Vie
tnam and Indonesia. Arrow has access to more than 80,000 km2 (approximately 20.
35 million acres) of coal seam gas in Australia. Arrow Energy International is
a subsidiary of Arrow, owned 90% by Arrow and 10% by Shell Exploration Company B
.V., a subsidiary of Royal Dutch Shell PLC. Arrow is listed on the Australia St
ock Exchange (ASX code AOE).


Statements contained in this press release that state the intentions, hopes, be
liefs, anticipations, expectations or predictions of the future of Far East Ener
gy Corporation and its management are forward-looking statements within the mean
ing of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. It is important to note that a
ny such forward-looking statements are not guarantees of future performance and
involve a number of risks and uncertainties. Actual results could differ materia
lly from those projected in such forward-looking statements. Factors that could
cause actual results to differ materially from those projected in such forward-l
ooking statements include: certain of the proposed transactions with Arrow may n
ot close on a timely basis or at all, including due to a failure to satisfy clos
ing conditions or otherwise; the anticipated benefits to us of the transactions
with Arrow may not be realized; the final amounts received from Arrow may be dif
ferent than anticipated; the preliminary nature of well data, including permeabi
lity and gas content, and commercial viability of the wells; risk and uncertaint
ies associated with exploration, development and production of oil and gas; dril
ling and production risks; our lack of operating history; limited and potentiall
y inadequate cash resources; expropriation and other risks associated with forei
gn operations; anticipated pipeline construction and transportation of gas; matt
ers affecting the oil and gas industry generally; lack of availability of oil an
d gas field goods and services; environmental risks; changes in laws or regulati
ons affecting our operations, as well as other risks described in our Annual Rep
ort on Form 10-K and subsequent filings with the Securities and Exchange Commiss
ion.




SOURCE Far East Energy Corporation


Contact Information:
David Nahmias, Far East Energy Corporation, [phone], dnahmias@fareastene
rgy.com

WebSite:
http://www.fareastenergy.com

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Antwort auf Beitrag Nr.: 36.772.919 von V51 am 16.03.09 11:18:25

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