Far East Energy Reports Increased Gas Production
Far East Energy Corporation (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, confirms an ongoing increase in gas production from the Shouyang Block. Submission of the draft Overall Development Plan (ODP) for the core production area at Shouyang is also expected in the near future.
As of March 11, production had reached 2,256,466 cubic feet per day (2,256 Mcf/d), following a period of expected steady production growth.
This is up 11% from the production figure released February 12, and is more than three times higher than the average 738 Mcf/d produced for the week ending November 12, 2013. Water production for March 11 was 3,763 barrels per day, compared to 3,414 barrels of water per day on November 12, 2013.
Commenting, CEO Michael McElwrath said, "We continue to take a conservative approach to the rate of increase of production from Shouyang and are gradually allowing gas production to rise, while optimizing continued water production - a classic approach to CBM production; and thus we are very pleased that we have nevertheless seen a tripling in gas production in the past four months."
In addition, following completion of the key documentation by FEEC, management expects the draft ODP for the acreage encompassing the 1H Production Area to be submitted to the National Development and Reform Commission (NDRC) within a matter of weeks. This would be the prelude to the award of a "Road Pass" ODP potentially by as early as mid-summer, prior to eventual formal ODP approval.
McElwrath continued, "We look forward to completion of the ODP process, but would also note that we have been producing and selling gas on a pre-ODP basis since 2011 and are already seeing the combined benefits of higher gas production and approximately $9/Mcf gas price that we are now receiving."