Far East Energy provides 2013 drilling program update

Far East Energy Corp.

Far East Energy Corp. (OTCBB: FEEC), which operates the Shouyang coalbed methane (CBM) Production Sharing Contract (PSC) in Shanxi Province, People’s Republic of China, has recently updated the market on recent drilling and fracing activities. Far East Energy is progressing though a robust drilling and development program for the 2013 work year, and, as of July 31, a total of 53 wells have been spudded since January 1. 

As of July 31, 26 wells have been fraced (23 wells in the 1H Pilot Area and three appraisal wells) and seven wells are waiting to be fraced. In addition, four wells are in the early stages of the dewatering process, are pumping and producing water from the #15 coal seam. Additional groups of wells are in the process of having surface facilities installed to commence pumping operations. After reaching a peak of 31 drilling rigs in late June, 25 rigs remain in the field focused on the drilling of additional production wells.

CEO Michael McElwrath said, “We are pleased with the progress of our 2013 drilling program and with the efficiencies we are seeing in field operations managing the program. Our focus is now on adding production wells for dewatering and gas production, and it is gratifying to see a real well pattern filling in so rapidly with 25 rigs masterfully managed. As for results, we are encouraged with the initial rates of water production from our core production area, which is essential to the dewatering process. We also just received positive preliminary gas content results from 18 of our recently drilled appraisal wells.”

Of the 53 wells spudded in 2013, 27 are appraisal wells that continue to confirm the lateral extension of the #15 seam throughout the company’s block and defining the real extent of the #9 and #3 coal seams. The appraisal program includes core retrieval and evaluation, pressure testing, mud logging, and sample collection. The 18 appraisal wells undergoing testing reveal excellent preliminary gas content, averaging 500 scf/ton.

“We are very encouraged with the initial laboratory reports for gas content and saturation levels, which seem to confirm that virtually the entirety of our block is blessed with very high gas content,” McElwrath said. “This information will be fed into future reserve and resource estimates.”

 



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