NEW YORK, Jan. 14, 2004 (PRIMEZONE) -- The following is an investment opinion issued by Investrend Research Syndicate:
In an initiating Benchmark report on Far East Energy Corp. (OTCBB:FEEC), Investrend Research analyst Gary Vassalotti notes that China currently produces 2% of its domestic gas consumption needs, and the government is committed to raising this percentage to a minimum of 8 % by 2010.
To accomplish this, China is constructing an extension of its West-East gas pipeline and Far East "signed a Production Sharing Contract with the China United Coal Bed Methane Corporation (CUBM), the legal authority over all coal bed methane gas in China, covering 1,072 square kilometers."
Another positive is the government's decision not to build any more coal fired electric plants and to convert several businesses from coal to natural gas. Far East began drilling and exploring the Enhong and Laochang areas in October 2003, and plans to initially drill 5 exploratory wells and 8 pilot wells.
"Far East Energy's 30-year agreement has apparently panned out. Preliminary tests have indicated that the gas in the well is very pure methane, and 700-800 cubic feet of gas per ton of coal. Far East will receive 60% of the proceeds from the drilling projects and CUBM will receive the remaining 40%.
"To further test and develop this property, Far East intends to drill a second in a few weeks, and a third in the final quarter of 2004," the analyst said. "Although Far East's best growth prospects are undoubtedly the China properties, it does own undeveloped reserves in the US."
Vassalotti pointed out that Far East's balance sheet shows a positive stockholders equity entry of $10,462,000, and $3,863,000 in cash on its balance sheet; an increase of 283% from December 2002's figure of $1,008,000, but currently no operating revenue.
The company also faces a number of risks, contained in the full report, including important disclosures and disclaimers, available at http://www.investrendresearch.com, at the company's InvestorPower page at http://www.investrend.com/company/list.asp?sPathParam=yes and investors are advised to read those disclosures carefully before trading in the equities of any enrolled company.
Far East Energy. is enrolled in Investrend Research's pioneering professional research program, which facilitates independent analysts to provide financial coverage for shareholders in companies that otherwise would have little or no analyst following. Enrollment fees for Benchmark coverage are $13,800, and the fees were paid by the company. Analysts are paid in advance of initial reports by Investrend Research to eliminate pecuniary interest, and neither the analyst nor anyone associated with Investrend Research may own or trade in the stocks of a company under coverage.
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