Far East Energy Corporation Announces Spudding of Second Horizontal Well in China

Market Wire, December, 2005

Far East Energy Corporation (OTC BB: FEEC) announced today it has commenced its second horizontal well, the (FCC HZ02), being drilled in the Shouyang Block of Far East Energy's 4,280 square kilometers (1,057,650 acres) coalbed methane (CBM) project in Shanxi Province, which it holds by virtue of a farmout agreement from ConocoPhillips.

Far East Energy recently completed the drilling phase of its first horizontal well (FCC HZ01) in its Shanxi Project with approximately 2,500 meters (8,200 feet) of horizontal distance in the coal seam. Far East Energy intends to drill the FCC HZ02 well with a goal of completing over 4,000 meters (13,120 feet) of horizontal drilling in the #15 coal seam at a depth of approximately 550 meters (1,800 feet). Far East Energy anticipates the FCC HZ02 well will require 50 to 65 days to drill.

Far East Energy began a production test on its first horizontal well (FCC HZ01) on November 29, 2005, which it expects will continue into early 2006 as the well is dewatered to determine the production potential.

"While we await the results of the production test of our first horizontal well in Shanxi Province," said Michael R. McElwrath, CEO and President of Far East Energy, "we are pleased to have initiated drilling on the second horizontal well in the Shouyang Block."

Based in Houston, Texas, with offices in Beijing, Kunming and Taiyuan City, China, Far East Energy Corporation is focused on the acquisition of, and exploration for, coalbed methane through its agreements with ConocoPhillips and China United Coalbed Methane Company (CUCBM).

Statements contained in this press release that state the intentions, hopes, 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 1993, 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: our lack of operating history; limited and potentially inadequate cash resources; risk and uncertainties associated with exploration, development and production of oil and gas; expropriation and other risks associated with foreign operations; matters affecting the oil and gas 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 and subsequent filings with the Securities and Exchange Commission.

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