Far East Energy Corp. announced today the release of an independent engineering report prepared by Resource Investment Strategy Consultants (RISC) with respect to its coalbed methane (CBM) contingent resources located in its Shouyang block in Shanxi Province, China as of December 31, 2011. The contingent resource estimates in the RISC report were prepared to the standards recognized by the Society of Petroleum Engineers (SPE) in the Petroleum Resources Management System (PRMS).
The RISC report estimates the net contingent resources at the 2C (Best Estimate) level of confidence for the Shouyang block under PRMS standards to be approximately 1.1 trillion cubic feet (tcf), with estimated future net revenue, on an NPV10 basis, of approximately US$2.6 billion. The report estimates net contingent resources at the 3C (High Estimate) level to be approximately 1.3 tcf, with an estimated NPV10 of US$3.78 billion; and, the 1C (Low Estimate) is 736.1 billion cubic feet, with an estimated NPV10 of US$1.19 billion.
Commenting on the RISC report, CEO Michael McElwrath said “As expected, these are excellent numbers that indicate the high potential of the Shouyang Block. These additions to contingent resources reinforce the potential and the significance of both the high permeability and the high gas content of the Block. As a result, we believe that we, and our partners at China United Coal Bed Methane, have stewardship of a CBM block in China with textbook geological characteristics capable of being converted into strong value for our shareholders.”
In January, the company released positive test results from three additional appraisal wells located at significant distances from the 1H Pilot Area in the company’s Shouyang Block.