Far East Energy 2012 Corporate Presentation

Far East Energy Corporation

Corporate Presentation

March 29, 2012
2012-4
Copyright © 2012 Far East Energy Corp., All rights reserved.

Cautionary Statements
• Statements contained in this presentation that state the intentions, hopes, estimates, beliefs, anticipations, expectations or predictions of the future of Far East Energy Corporation and its management are forward-looking statements within the meaning 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 any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties. Actual results
could differ materially from those projected in such forward-looking statements. Factors that could cause actual results to differ materially from those projected in such forward-looking statements include: the preliminary nature of well data, including permeability and gas content. There can be no
assurance as to the volume of gas that is ultimately produced or sold from our wells; the fracture stimulation program may not be successful in increasing gas volumes; due to limitations under Chinese law, we may have only limited rights to enforce the gas sales agreement between Shanxi
Province Guoxin Energy Development Group Limited and China United Coalbed Methane Corporation, Ltd., to which we are an express beneficiary; additional wells may not be drilled, or if drilled may not be timely; additional pipelines and gathering systems needed to transport our gas may not
be constructed, or if constructed may not be timely, or their routes may differ from those anticipated; the pipeline and local distribution/compressed natural gas companies may decline to purchase or take our gas, or we may not be able to enforce our rights under definitive agreements with
pipelines; conflicts with coal mining operations or coordination of our exploration and production activities with mining activities could adversely impact or add significant costs to our operations; the Chinese Ministry of Commerce (“MOC”) may not approve the extension of our production sharing
contracts (“PSCs”) on a timely basis or at all, or, if so, on commercially advantageous terms; the MOC’s failure to approve the extension of the Shouyang PSC by March 1, 2012 could limit the Company’s ability to borrow additional amounts under the credit facility; the MOC’s failure to approve
the extension of the Shouyang PSC by May 30, 2012 could result in the early termination of the credit facility and require immediate repayment of all outstanding amounts thereunder; the Company’s inability to comply with certain quarterly financial covenants, satisfy certain continuing
representations, or remedy a material adverse effect to the business of the Company or to certain other conditions could result in early termination of the credit facility and require immediate repayment of all outstanding amounts thereunder; the total amounts we may borrow from Standard
Chartered Bank may be different than anticipated; the MOC may require certain changes to the terms and conditions of our PSCs in conjunction with their approval of any extension of our PSCs, including a reduction in acreage; our lack of operating history; limited and potentially inadequate
management of our cash resources; risk and uncertainties associated with exploration, development and production of coalbed methane; proved reserves may not be reported in a timely manner or at all and, if reported, may be smaller than anticipated; our inability to extract or sell all or a
substantial portion of our estimated Contingent Resources; we may not satisfy requirements for listing our securities on a securities exchange; expropriation and other risks associated with foreign operations; disruptions in capital markets affecting fundraising; matters affecting the energy
industry generally; lack of availability of oil and gas field goods and services; environmental risks; drilling and production risks; changes in laws or regulations affecting our operations, as well as other risks described in our Annual Report on Form 10-K, quarterly reports on Form 10-Q and
subsequent filings with the Securities and Exchange Commission. Statements contained in this presentation speak only as of the date hereof. We assume no obligation to update any of these statements.

• Definition of Technical Terms:
Certain technical terms used in this presentation associated with descriptions of the potential for oil and gas properties are not consistent with the definition of “Proved Reserves” in the SEC rules and thus the SEC guidelines prohibit us from including such terms in filings with the SEC. Such
terms used herein are defined as follows:
– Original Gas-in-Place: This term refers to discovered and undiscovered Gas-In-Place, which is the quantity of hydrocarbons which is estimated, on a given date, to be contained in known accumulations, plus those quantities already produced therefrom, plus those estimated
quantities in accumulations yet to be discovered.
– Recoverable CBM Resources: Recoverable CBM resources refer to a calculation based on geologic and/or engineering data similar to that used in estimates of proved reserves; but technical, contractual, economic, or regulatory uncertainties preclude such resources from being
classified as proved reserves. Recoverable CBM resources may also be estimated assuming future economic conditions different from those prevailing at the time of the estimate.
– Contingent Resources: Those quantities of CBM estimated, as of a given date, to be potentially recoverable from known accumulations by application of development projects, but which are not currently considered to be commercially recoverable due to one or more contingencies.
– Estimated Ultimate Recovery: The sum of resources remaining as of a given date and the cumulative production as of that date.

• Note to Investors:
• This presentation contains information about adjacent properties on which we have no right to explore. U.S. investors are cautioned that petroleum/mineral deposits on adjacent properties are not necessarily indicative of such deposits on our properties. This presentation also includes various
estimates and comparisons contained in studies and reports. Actual results are likely to vary from the results in the studies and reports.

• Additional Information Regarding Estimates of Reserves:

• NPV10 and the standardized measure of discounted future net cash flows do not purport to be, nor should they be interpreted to present, the fair value of the coalbed methane reserves of the Shouyang project. An estimate of fair value would take into account, among other things, the recovery
of reserves not presently classified as proved, the value of unproved properties, and consideration of expected future economic and operating conditions.
• Estimated future production of Proved Reserves and estimated future production and development costs of Proved Reserves are based on current costs and economic conditions. Future income tax expenses are computed using the appropriate year-end statutory tax rates applied to the future
pre-tax net cash flows from proved coalbed methane reserves, less the tax basis of Far East Energy. All wellhead prices are held flat over the forecast period for all reserve categories. The estimated future net cash flows are then discounted at a rate of 10%.
• NPV10 for Proved Reserves may be considered a non-GAAP financial measure as defined by the SEC and is derived from the standardized measure of discounted future net cash flows for proved reserves, which is the most directly comparable US GAAP financial measure. NPV10 is computed
on the same basis as the standardized measure of discounted future net cash flows for proved reserves but without deducting future income taxes. As of December 31, 2011, our discounted future income taxes were $2.8 million and our standardized measure of after-tax discounted future net
cash flows for Proved Reserves was $62.6 million. We believe NPV10 is a useful measure for investors for evaluating the relative monetary significance of our coalbed methane properties. We further believe investors may utilize our NPV10 as a basis for comparison of the relative size and
value of our Proved Reserves to other companies because many factors that are unique to each individual company impact the amount of future income taxes to be paid. Our management uses this measure when assessing the potential return on investment related to our coalbed methane
properties and acquisitions. However NPV10 is not a substitute for the standardized measure of discounted future net cash flows. Our Pre-Tax PV10 and the standardized measure of discounted future net cash flows do not purport to present the fair value of our proved coalbed methane gas
reserves.
• NPV10 for Probable and Possible Reserve amounts above represent the present value of estimated future revenues to be generated from the production of Probable or Possible Reserves, calculated net of estimated lease operating expenses, production taxes and future development costs,
using costs as of the date of estimation without future escalation and using 12-month average prices, without giving effect to non-property related expenses such as general and administrative expenses, debt service and depreciation, depletion and amortization, or future income taxes and
discounted using an annual discount rate of 10%. With respect to NMPV10 amounts for Probable or Possible Reserves, there do not exist any directly comparable US GAAP measures, and such amounts do not purport to present the fair value of our Probable and Possible Reserves.
• It is not intended that NPV10 or the FASB’s standardized measure of discounted future net cash flows for Proved Reserves represent the fair market value of Far East Energy’s Proved, Probable or Possible Reserves. Far East Energy cautions that the disclosures contained in this presentation
related to the value of Far East Energy’s coalbed methane reserves are based on estimates of Proved, Probable or Possible reserve quantities and future production schedules which are inherently imprecise and subject to revision, and the 10% discount rate is arbitrary. In addition, costs and
prices as of the measurement date are used in the determinations, and no value may be assigned to Probable or Possible Reserves. Estimates of economically recoverable coalbed methane reserves and of future net revenues are based upon a number of variable factors and assumptions, all
of which are to some degree subjective and may vary considerably from actual results. Therefore, actual production, revenues, development and operating expenditures may not occur as estimated. The reserve data are estimates only, are subject to many uncertainties and are based on data
gained from production histories and on assumptions as to geologic formations and other matters. Actual quantities of coalbed methane may differ materially from the amounts estimated.

Copyright © 2012 Far East Energy Corp., All rights reserved. 2

Far East Energy Profile
• Coalbed methane development company operating under three production sharing contracts
(PSCs) in Shanxi and Yunnan Provinces (see SEC filings for current status)
– Total 1.1 million acres (~4450 km2)(d)
– Estimated 21.3-29.2 Tcf (603-827 Bcm) of gross original gas-in-place (OGIP)(b)
– Shouyang coals exhibit both high permeability and high gas content, properties that are
consistent with the most commercially successful CBM basins worldwide
• Exceptional infrastructure and market access
– 20 year gas pipeline sales agreement in place in Shouyang
– Approximately $6.45 to $7.34/Mcf(c) wellhead price
• Strong management and board
– Solid experience in CBM and with Chinese energy industry and policy makers
• Funding in place
– Bank note payable issued in November 2011 securing the funding needs for current drilling
program without issuance of equity
a. 1.1 million gross acres includes acres subject to the Qinnan PSC. Note that the exploration period of the Qinnan PSC has not been extended and remains subject to approval by
Chinese authorities, we can not be optimistic at this time. The Qinnan PSC covers approximately 528,620 gross acres (2,139 km 2).
b. OGIP estimates (P10 -P90) for Qinnan from ConocoPhillips; for Yunnan from Yunnan Provincial Coal Geological Bureau; for Shouyang from July 2011 report by Netherland, Sewell &
Associates, Inc. (NSAI), and does not take into account recently relinquished acreage.
c. Inclusive of current and announced estimated government subsidies, and subject to annual review and exchange rate fluctuations.
d. Estimates based on recent extensions and modification agreements for Shouyang and Yunnan PSC. The extensions of the Shouyang and Yunnan PSCs have been executed and are
pending Chinese government approval from MofCom.

Investment Highlights
(Trades on OTC:BB as FEEC)
• Beneficiary of CHINA’S ECONOMIC GROWTH/robust energy demand
– Gas demand far exceeds supply with demand expected to triple over next 10 years. PRC
focusing on CBM as desirable alternative to LNG imports
• Far East Energy’s blocks have enormous gas-in-place, and discovery of HIGH
PERMEABILITY in Shouyang makes acreage unique in China and potentially world class
– Netherland Sewell and ARI have verified high gas content/high permeability and project high
production rates
– Shouyang Block could support 4,000 to 5,000 vertical wells on 80-acre spacing
• SALES AGREEMENT WITH PIPELINE PROVIDES CAPACITY to move large volumes
which is ESSENTIAL FOR LARGE-SCALE DEVELOPMENT. Believed to be first of its kind
for foreign operators. At $6.45 to $7.34/Mcf and assuming ARI projected production levels,
economics are compelling
• Second competing pipeline to Shouyang is now completed, creating likely competition and
potentially adding up to 50 MMcf/d of off-take capacity (Total possible off-take of 90 MMcf/d
from both pipelines)
• Critical desorption pressure (CDP) reached in portions of the Shouyang 1-H pilot area. At stage
where high permeability reservoirs often begin to exhibit significant production increases
• Multi-year drilling program planning– ramping up to an annual pace of 200 wells per year and up
to 500 wells per year in outer years


Far East Energy’s
Production Sharing Contract Areas
Estimates are based on recent
extension and modification
agreement which has been
executed and is now pending
Chinese government approval.

Shouyang contract area
1656.3 km2
(409,282 ac)

Yunnan contract area
483 km2
(119,338 ac)
Estimates are based on recent extension
and modification agreement which has
been executed and is now pending
Chinese government approval.
Qinnan contract area
2317.4 km²
(572,642 ac)
Note that the exploration period of the Qinnan PSC has not
been extended and remains subject to approval by Chinese
authorities. If the Qinnan PSC is not extended, Far East
Energy will hold rights to approximately 528,620 gross acres
(2,139 km2).

Why Coalbed Methane in China?
Why China? Why Coalbed Methane?
Enormous energy demand/enormous
environmental problems CBM addresses both concerns

DEMAND: SUPPLY:
World’s largest China has the largest CBM resources
consumer of energy in the world (1305 Tcf gas-in-place)

DIRTY ENERGY: CLEAN CBM:
73% of energy supply from coal CBM (gas) burns substantially cleaner than coal

ENVIRONMENTAL CONCERNS: China targets 27X increase in gas
20 out of 30 of the world’s most polluted cities in the world;
Number 1 in CO2 emissions
consumption in energy mix
CBM production eliminates mine venting and reduces
Number 1 in methane emissions
(21X heat trapping of CO2)
emission of methane to atmosphere

China coal has among the highest gas
content in the world, but over 5,000 Degasification in advance of
miners/year die in methane explosions mining coal saves lives
Copyright © 2012 Far East Energy Corp., All rights reserved. Slide Sources: Business Week, EIA, World Bank, EPA, China Daily, Trading Markets 6

China’s Current Energy Targets
• China aims for 2.5x increase in CBM
production in next 5 years
• China also wants to triple the use of gas by 2020
• Chinese government officials have stated an
intent to double the subsidy for CBM
production to 0.4 RMB/m3 which would move
the price paid for Far East Energy gas from U.S.
$6.45 per Mcf to $7.34 per Mcf, a significant
premium over the Henry Hub U.S. gas price of
$2.98 per Mcf as of December 30, 2011

A Chinese Coalbed Methane Breakthrough
To Supply Growing Demand
• Far East Energy’s discovery is a breakthrough
for China’s CBM industry
– Shouyang’s primary coal seams exhibit both
high permeability (80 to 120 millidarcies)
China
and high gas content
– Coal seams with similar properties in San
Juan and Black Warrior basins initiated
dramatic CBM production growth in U.S.
– Established operators in China are
accelerating major development plans
• Coalbed methane may hold some of the
greatest potential for increasing Chinese
domestic gas supplies
– Demand fundamentals drove flurry of
acquisitions of Australian CBM in 2008 Australia
– Domestic sources obviously desirable,
fueling interests by majors in China CBM

Resource Comparison
Preliminary technical data suggests that the
Company’s North Shouyang acreage compares very well
to premier U.S. CBM plays
Note: Actual results are likely to vary from the following preliminary estimates, which are based on various assumptions

Black N. Shouyang
San Juan
Warrior Acreage
Coal Gas Content (Scf/ton)(b) 400-500 350-500 400-600(a)
Coal Thickness: Typical net coal (feet)(b) 40 5 10-15
(12 m) (1.5 m) (3-4.5 m)
Pressure (psi)(b) 1500 400 400
(10.3 MPa) (2.8 MPa) (2.8 MPa)
Permeability (mD)(b) 25 75 100(d)
Recovery Factor(c) 80% 65% 50-70%
Notes:
a. Based on recent gas content test results from several pilot development test wells.
b. Source: Data on U.S. Basins from John P. Seidle, Sproule Associates, Inc., Coalbed Methane. of North America.
c. Source: Gas Research Institute and March 2008 ARI report.
d. Permeability in Shouyang Pilot area ranges from 80-120 mD, according to the ARI Report of March 21, 2008.


Netherland, Sewell & Associates, Inc. (NSAI)
Reports on OGIP for Shouyang PSC*

Gross OGIP (Tcf / Bcm)
As of June 30, 2011
Low Estimate Best Estimate High Estimate
Coal Seam Tcf Bcm Tcf Bcm Tcf Bcm
No. 3 0.900 25.47 1.487 42.08 2.100 59.43
No. 9 0.860 24.34 1.047 29.63 1.216 34.41
No. 15 4.964 140.48 6.056 171.38 7.053 199.60
Total 6.724 190.29 8.590 243.10 10.369 293.44

*The NSAI report s on OGIP estimates, which contains further information and qualifications, can be found on Far East Energy’s website at: www.fareastenergy.com. Note that some
numbers may not total exactly, due to rounding. Estimates are based on original acreage held by the Shouyang PSC. The extension of the exploration period of the Shouyang PSC has
been executed and is now pending Chinese government approval.


Netherland, Sewell & Associates, Inc. (NSAI)
Contingent Resource Report* for Shouyang PSC

RESTATED BASED ON PSC MODIFICATION
As of June 30, 2011

Shouyang Block Low Best High
Net Contingent Resources, Bcf 100.4 Bcf 319.6 Bcf 461.8 Bcf
(Bcm) (2.8 Bcm) (9.1 Bcm) (13.1 Bcm)

Net Cash Flow (NPV10) $259,689,000 $1,057,426,000 $1,689,875,000

(Relinquished 16% of acreage in Shouyang for a 10% reduction in NPV10 of contingent resources)

Contingent resources are those quantities of CBM estimated, as of a given date, to be potentially recoverable from known
accumulations by application of development projects, but which are not currently considered to be commercially recoverable
due to one or more contingencies.

* The contingent resources report is posted to the FEEC website, www.fareastenergy.com. The NPV10 amounts are shown before consideration of any income taxes.

Shouyang US SEC Reserves – RISC
As of December 31, 2011

Gross Net Future Net Revenue
Category
Reserves Reserves $million
MMscf MMscf 10% Discount

Proved Developed 14,160 13,505 34.5
Proved Undeveloped 45,469 41,094 30.9
Total Proved 59,629 54,599 65.4
Probable Developed 3,653 3,608 14.9
Probable Undeveloped 511,300 375,994 649.0
Total Probable 514,953 379,603 663.9
Possible Developed 8,845 8,783 29.0
Possible Undeveloped 156,420 105,654 349.9
Total Possible 165,265 114,436 378.9
Total Proved, Probable
and Possible Reserves 739,847 548,638 1,108.2
Totals may differ due to rounding.
Gas volumes are expressed in units of million standard cubic feet at reference conditions of 60 deg F and 14.696 psia


First Pipeline Sales Agreement
for Foreign CBM Operator in China
20 year gas sales contract with Shanxi
• Flowing in newly constructed pipeline with 40 million cubic feet
Provincial Guoxin Energy per day (40 MMcf/d) of capacity
Development Group (SPG)
Wellhead price of
• Price includes enacted and announced government subsidies
1.45 to 1.65 RMB/m3, • Wellhead price approximately 2.5x that of U.S. Henry Hub gas(b)
or approximately $6.45 to $7.34/Mcf(a)

• Pipeline must “take” all gas produced up to 300,000 m3/d
Favorable “take-or-pay” contract terms (10.6 MMcf/d), or pay for available volumes not taken

Ability to renegotiate contract for • Setting stage for strong competitive bidding for selling gas into
second pipeline built to the area
volumes in excess of 10.6 MMcf/d

Second pipeline built to • Presents possibility of even higher prices as two lines may
Shouyang is complete compete for Far East Energy’s gas

Notes: a. Inclusive of existing government subsidies (0.2 RMB/m 3 from central government plus 0.05 RMB/m 3 from Shanxi provincial government) plus estimated 0.2 RMB m 3
government subsidy (announced but not yet implemented), and subject to annual review and exchange rate fluctuations.
b. Henry Hub average natural gas price of $2.98/Mcf at December 30, 2011 close.

Extension Agreement for
Shouyang Block CBM PSC Signed
• Agreement signed November 15, 2011, by FEEB and CUCBM extending
exploration period of Shouyang Block PSC (currently pending Ministry of
Finance approval)
• 84.5% of acreage retained (1656.3 km2 or approximately 409,281 acres)
• Relinquished approximately 306.5 km2 (approximately 75,738 acres)
• Portions of relinquished acreage are considered by management to be marginal
or non-prospective
• Approximately 100 km2 (24,710 acres) is currently pending reserves
certification by Chinese authorities (includes 1H pilot area as well as several
nearby PDT wells)
– Pending Chinese reserves area constitutes basis of a potential Overall Development
Plan (ODP)
– Of this pending reserves area, FEEB is entitled to100% of reserves of approximately
65 km2 (16,062 acres) and includes all wells in the 1H pilot area
– Of this pending reserves area, CUCBM is entitled to100% of reserves of
approximately 35 km2 (8,649 acres)


Gas Gathering System
Compressor Stations


A D

B R CUCBM to drill well for FEEB to replace P8

C

Shouyang PSC Exploration Agreement Acreage Diagram
84.5% of acreage retained
A. Approximately 65 km 2 with FEEB entitled to100% of reserves
B. 35 km2 with CUCBM entitled to100% of reserves
C. 1656.3 km2 (includes area A)
D. Of the 306.5 km2 relinquished, 104 km 2 was either a no coal or thin coal zone


Operations Update
• 16 new wells completed in July-August 2011 completion cycle

Drilling and • 3 wells completed in November-December 2011 completion cycle;
7 deferred to March 2012 due to freezing conditions
• De-watering continuing on 1H Pilot Area wells
Completion • Currently drilling one well per month over the winter; continued focus on pattern
drilling in 1H Pilot Area

•Located in east central Shouyang Block
•Thickness of #15 coal seam: 3.85m (12.63 ft)

SY-P18 •Top of the #15 coal seam: 1070 m (3510 ft)
•Current Production Rate: 40 Mcf/d (1132m3/d)
•Has produced over 100 Mcf/d at 40 psi surface flowing pressure; 220 M fluid over #15 coal seam
•Initial test results indicate gas content of 660 scf/ton
•Demonstrates further permeability continuity across the Shouyang Block

•Located in southeast Shouyang Block
•Thickness of #15 coal seam: 6.4m (21 ft)
•Approximate Vertical Depth:1372m (4501 ft)

SYS-05 •Current Production Rate: 77 Mcf /d (2180m3/d)
•Test results indicate gas content of 935 scf/ton
•Saturation: 95%


Shouyang Block
Appraisal Wells
Approximately
18 km west of 50-70 mD
1H pilot area

140 mD 80-100 mD
Prod Test 20-40 mD Prod Test Approximately
Prod Test 12 km due east
180mD
+200 mD of 1H pilot area
120 mD Prod Test 50 mD
Prod Test
CUCBM to drill well Approximately
R for FEEB to replace P8. 22 km southeast
30 mD Location TBD. of 1H pilot area
50 mD Prod Test
Prod Test 10-20 mD
Prod Test 300 mD Approximately
Prod Test 2H/2V 26 km southeast
60 mD of 1H pilot area
Prod Test
20 mD 10 mD
IFO Test Gas Content:
529 scf/ton

Depth: 1070 m
Gas Content: 660 scf/ton

Located midway between
northern and southern
boundaries of block and is
approximately 20km south of
1H pilot area

300+ mD
Gas Content:
479 scf/ton

SYS-05
Approximately 14 km south and
22 km east of SYS02 and 35 km
south of 1H pilot area
Depth 1372m
Gas Content: 935 scf/ton
Saturation: 95%


Shouyang Results of
Appraisal Wells
Approximately
18 km west of Approximately Approx. Depth: 662 m
1H pilot area 12 km due east of Perm: 200 mD
1H pilot area Prelim Gas Content: 520 scf/ton
1H Pilot Area
Perm: 80-100 mD R CUCBM to drill well for FEEB to replace P8. Location TBD.
Average Depth: approx. 600 m
Average Gas Content: 400-600 scf/ton SY-P12
Average Thickness: 3-4.5 m Approx. Depth: 970 m
Perm: 10 mD
SY-P17 Prelim Gas Content: 529 scf/ton
Approx. Depth: 1196 m
Gas Content: 583 scf/ton Approximately 26 km
Approximately 22 km southeast
SY-P20 southeast of 1H pilot area
Approx. Depth: 1054m SYS-02 of 1H pilot area
Gas Content: 561 scf/ton Approx. Depth: 1274m SY-P18: Promising Area
Perm: 300+ mD Approx. Depth: 1070 m
Gas Content: 479 scf/ton Prelim Gas Content: 660 scf/ton
Average Thickness: 4m Reached Production Rate over
100 Mcfpd

Located midway between
northern and southern
boundaries of block and is SYS-05
approximately 20km south of
Approx. Depth:1372m Approximately 14 km
1H pilot area
Gas Content: 935 scf/ton south and 22 km east of
Saturation: 95% SYS02 and 35 km south of
1H pilot area


Shouyang Block Permeability*

Permeability
Range Number of Wells
Well Area (mD) In this Range
1H Pilot Area 80-100 1H Pilot Area Wells

PDTW 200-300 3
PDTW 100-199 3
PDTW 50-99 4
PDTW 10-49 6

*Results of Pilot Development Test Wells (PDTW) to determine the extent of high permeability in Shouyang Block

Projected Drilling
Program at Shouyang
Subject to approval by CUCBM
Wells
Drilled, Drilling
and/or Completed
2010 (actual) 26
2011 (actual spud) 33
2012 (estimated 12 mos.) 200-250
2013 (estimated) 300-400
2014 (estimated) 500

• FEEC is currently considering various financial sources to secure project
finance to fund costs not covered by gas sales.
• The revenue from additional wells could provide substantial offset to well costs.


Bank Financing of 2012
Shouyang Development Costs
Gross Loan Amount: $25 Million

Proceeds Net of Issuance Costs: $23.5 Million

Tenor: 9 months with potential additional 3 month

Interest Rate: LIBOR plus 9.5%

Common Stock Dilution: NONE

Amount Drawn at Closing: $17.87 Million

Use of Proceeds: Operational costs related to first half of 2012
and finance and related expenses
Bank: Standard Chartered PLC
(Leading international bank, operated over 150 years
and earned over 90% of income and profit from Asia,
Africa and the Middle East)


Key Validation Points
• China’s economy robust; energy demand enormous; gas consumption expected to rise
• Far East Energy well-positioned to benefit from China’s demand for clean burning gas
– In-Country (a competitive advantage over LNG), with enormous resource base of
1.1 million acres and 21.3-29.2 Tcf (603-827 Bcm) of estimated gas-in-place (see SEC filings for current
status)*
– Discovery of breakthrough area of high permeability, high gas content is unique in China with potential
to generate optimal economics akin to world’s best CBM plays
– Netherland Sewell, ARI verified high permeability, high gas content and projected very attractive
economic rates of production
• Excellent access to market through national trunk and provincial pipelines
• 20 year gas sales contract already secured at $6.45 to $7.34/Mcf. Believed to be first foreign
CBM operator to secure pipeline access essential for large-scale development
• Netherland Sewell Contingent Resource Report of June 30, 2011, as restated for PSC extension,
NPV10 “Best” case $1.1 billion , “High” case $1.7 billion and “Low” case $260 million
• Initial independent reserves report by RISC (in accordance with SEC guidelines) showing
NPV10 of $65.4 million-Proved, $663.9 million-Probable, and $378.9 million-Possible

*Does not take into account acreage relinquished under modification agreement to PSCs pending MofCom approval.

APPENDIX


Third Party Review
Shouyang Block #15 Coal Seam
Advanced Resources International, Inc. (ARI) 2008 Netherland, Sewell & Associates, Inc. (NSAI) 2007

Initial permeability: Study stated Shouyang Block #15 coal
80 and 120 millidarcies (md) seam has high permeability,
approximately 100 millidarcies (md)
Gas content estimate:
500 scf/ton dry ash free
Gas content measurements:
400-600 scf/ton
Forecast peak daily production
rate estimates
•Vertical well 80 acre spacing: 300-500 Mcfpd (8496-14,160 m3pd) Higher gas rates of 1 to 2 MMcfpd
•Horizontal well 400 acre spacing: 2.3-5 MMcfpd (65-142 Mcmpd) (28-57 Mcmpd) are possible in future
horizontal wells
Forecast gas recovery rate estimates
(20 year, P50) Most likely and mean recovery estimate of
• Vertical well 40-160 acre spacing: 0.5-1.2 Bcf/well 1.1 Bcf and 1.8 Bcf
(14.2-34 MMcm/well)
• Horizontal well 250 & 550 acre spacing: 3.4-5.3 Bcf/well
(31.2 and 51 MMcm), respectively, per
(96.3-150.1 MMcm/well) horizontal well
Note: Actual results are likely to vary from the foregoing preliminary estimates, which are based on various assumptions. The third party reports, which contain further information and qualifications,
may be found on Far East Energy’s website (www.fareastenergy.com). ARI is a research and consulting firm that provides services related to coalbed methane, gas shale, tight sands, enhanced oil
recovery and carbon sequestration (www.adv-res.com). NSAI is an independent engineering firm that provides engineering studies of reservoirs for oil and gas companies worldwide
(www.netherlandsewell.com).

Financial Highlights

As of December 31, 2011
Outstanding Shares 342,209,884
Outstanding Warrants 21,994,982
Outstanding Options 10,823,833

Market Cap Daily Volume
OTC.BB @ 12/31/2011
(3 month average
@ 12/31/2011)

FEEC $71.9 MM 1,366,579


Vision and Commitment
Our vision is zero harm to
people and the
environment while creating
value for our shareholders
as well as for China

Comply with International
No lost-time accidents in laws and regulations
6+ years and no major concerning the
environmental incidents environment, occupational
safety and health in China

Good corporate citizens of
China, utilizing very high
Employ numerous safety
levels of Chinese content
precautions
in personnel, services, and
equipment


FEEC Management and
Operations Team
Michael R. McElwrath
CEO, President and Director
Former U.S. Assistant Secretary of Energy, Director
National Institute Petroleum & Energy Research
Robert “Bob” Hockert (30+ years) Dr. Zhendong “Alex”
China Country Manager Yang
CBM Drilling & Production Sr. Vice President - Geology
Manager; District Manager for Pioneer in China Coalbed
Halliburton – Russia Methane, Chief Geologist with
(20+ years) Amoco, Arco, BP CBM projects
(40+ years)

Bruce N. Huff David J. Minor
Chief Financial Officer Executive Director of
Operations
Former President, Director and
Chief Financial Officer Former President and General
of Harken Energy Manager of Walter Black
(35+ years) Warrior Basin, LLC
(30+ years)
Rebecca B. “Beckie” Le
President and CFO – FEEB
Sr. VP Government Relations

Amerada Hess, Price
Waterhouse, Consolidated
Edison (15+ years)


FEEC Board of Directors
Donald A. Juckett
Chairman, retired U.S. Department of Energy;
Director, Office of Natural Gas; Director, DC Office of
American Association of Petroleum Geologists;
Established U.S.-China Oil & Gas Industry Forum

William A. Anderson C. P. Chiang
Former Founder, Director, President or CFO of publicly and Former China Country Manager of
privately held banking, energy and technology companies Burlington Resources;
40 yrs with Exxon, British Gas, Tenneco, etc.

Michael R. McElwrath John C. Mihm
Former U.S. Assistant Secretary of Energy; Retired Senior Vice President of ConocoPhillips
Director National Institute China background dates to 1983
Petroleum & Energy Research
(30+ years energy industry)

Lucian L. Morrison Thomas E. Williams
Founder and Director of numerous trust and investment companies; Retired President of Mauer Technology and VP, R&BD of Noble
former Chairman and CEO of Wing Corp. Technology Services Division
(exploration and production company) (both Noble Corporation subsidiaries)


Production Sharing Contract Briefs
Shanxi Province Shouyang PSC(a) Yunnan Province PSC(a)

• FEEC has 100% interest in H-1 proved • 60/40 split with CUCBM
reserves area, including development costs and • FEEC pays 100% exploration costs/60%
all production development costs
• 70/30% split in other areas
• CUCBM pays 40% development costs
• CUCBM pays 30% development costs in areas
outside H-1 • FEEC recovers all exploration costs out of
production
• FEEC recovers all exploration costs and
CUCBM recovers all pre-contract costs • Parties recover development costs out of
(US$2.8M) out of production, including H-1 production with 9% interest
• ConocoPhillips 3.5% ORRI out of FEEC share • Parties pay up to 3% PRC royalty(b)
• Parties recover development costs out of
production with 9% interest
• Parties pay up to 3% PRC royalty(b)

Shanxi Province Qinnan PSC is similar to Shouyang before the most recent amendment,
however force majeure relating to transfer from CUCBM to PetroChina is pending
(a) The exploration period for the Yunnan PSC and Shouyang PSC expired on 6/30/2011, however an extension has been agreed for Shouyang and
Yunnan and are awaiting final government approval.
(b) PRC royalty is zero until 50 million cubic feet per day of gas production, and up to 3% after reaching 500 MMcf/d; however, FEEC understands that
the royalty regime is changing to a tax regime

Shanxi Province
Gas Pipeline Network 1

Shouyang Block Pipeline
Opportunities 2

Shouyang Block
1
20 year gas sales agreement signed with SPG
(Pipeline arrived to Shouyang PSC in July 2010)

2
Shanxi International
(second competing pipeline complete)


Acreage Comparison
San Juan Basin (Fruitland Coal)

Source: Map: Energy Information Administration (November, 2007); Shouyang Block Overlay: Jay Smith, Viking Engineering, L.C.
This map is not an indication that the Shouyang Block will be as successful as the San Juan Basin.

Acreage Comparison
Black Warrior Basin

Shouyang
Block
Acreage
Size

Source: Map: Energy Information Administration (November, 2007); Shouyang Block Overlay: Jay Smith, Viking Engineering, L.C.
This map is not an indication that the Shouyang Block will be as successful as the Black Warrior Basin

Far East Energy Corporation
Website
www.fareastenergy.com

Investor Relations Contacts
Michael R. McElwrath – CEO and President
Bruce N. Huff – Chief Financial Officer
Catherine Gay – Assistant to CEO
investorrelations@fareastenergy.com
281.606.1600

Corporate Headquarters
363 N. Sam Houston Parkway E., Suite 380
Houston, Texas 77060
Telephone: 832.598.0470


Far East Energy 2012 Corporate Presentation

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Far East Energy 2012 Corporate Presentation