Far East Energy Participates in Completion Ceremony of the Far East Energy and Shouyang City Gas Network

HOUSTON, January 20, 2011 /PRNewswire/ --

Far East Energy Corporation (OTC Bulletin Board: FEEC) announced today that Company representatives attended a "lighting ceremony" held on January 19, 2011 in Shouyang City to celebrate the completion of the Far East Energy and Shouyang City Network on Tuesday, January 18, and the first flow of gas from Far East Energy wells. This celebration was attended by many prominent dignitaries from various local governments, including but not limited to Mr. Li Yonghong, Municipal Party Secretary of Jinzhong City, Mr. Wang Jitang County Party Secretary of Shouyang County and Mr. Hao Penghong, County Mayor of Shouyang County. In addition to representation from the local governments, attendees included industry executives such as Dr. Sun Maoyuan, Chief Consultant and former Chairman of China United Coalbed Methane Corp. (CUCBM), Mr. Li Liang, CUCBM Administration Management Director, Mr. Liang Xiehu, Party Secretary and Board Chairmen of Gouxin Energy, Mr. Zhang Peng, Board Chairman of Shanxi CBM, Mr. Li Xiaobin, Chairman of Shanxi Natural Gas Company and Mr. Hou Bin, Party Secretary Vice Manager of Shanxi CBM Gathering and Transportation Company. Far East Energy representatives included Mr. Garry Ward, Senior Vice President - Engineering, Mr. Alex Yang, Senior Vice President - Exploration and Production, Mr. David Lue, Gas Marketing Consultant and other field and operations personnel.

The event included speeches from the local government and industry representatives. Mr. Hao Penghong, mayor of Shouyang County hosted the event. Mr. Li Liang, CUCBM Administration Director signed an agreement between CUCBM and Gouxin Energy to start the gas sales process.

Dr. Sun Maoyuan, former Chairman of CUCBM highly praised all parties, and stated that, "Far East is a foreign company that is highly credible, has excellent CBM technology and a very impressive and capable management team. CUCBM and Far East have a history of long friendly cooperation. Shouyang Block has great future prospects."

Mr. Garry Ward, Senior Vice President of Engineering for Far East Energy gave prepared remarks commenting on the extraordinary cooperation that exists between Gouxin Energy Company, CUCBM and Far East Energy and how that cooperation allowed consummation of a gas sales agreement and construction of a gas gathering system; all accomplished between June and December of 2010. The high-water mark of the event was the lighting of the CBM flame in the center of the Shouyang City Square. The event was covered by the Shanxi TV and Jinhong TV stations for local broadcast.

This event represents the culmination of last year's work to sign a gas sales agreement and design and construct a gas gathering system for many of the wells of Far East Energy in the Shouyang Block. This is a significant milestone in the cooperation among CUCBM, Far East Energy and Gouxin Energy. Gouxin Energy Company operates over 1,000 km of pipeline in Shanxi Province. The pipeline extending past the Shouyang Block to the Taiyuan area (provincial capitol) is capable of handling over 40 million cubic feet of gas every day.

Far East Energy Corporation

Based in Houston, Texas, with offices in Beijing, Kunming, and Taiyuan City, China, Far East Energy Corporation is focused on coalbed methane exploration and development in China.

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 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: there can be no assurance as to the volume of gas that is ultimately produced or sold from our wells; 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 (the "Purchaser") and China United Coalbed Methane Corporation, Ltd. ("CUCBM"), to which we are an express beneficiary; we depend on CUCBM to remit our share of the payments received from the Purchaser under the gas sales agreement; 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; certain of the proposed transactions with Dart Energy (formerly Arrow Energy) may not close on a timely basis or at all, including due to a failure to satisfy closing conditions or otherwise; the anticipated benefits to us of the transactions with Dart Energy may not be realized; the final amounts received by us from Dart Energy may be different than anticipated; Dart Energy may exercise its right to terminate the Farmout Agreement at any time; the Chinese Ministry of Commerce ("MOC") may not approve the extension of the Qinnan PSC on a timely basis or at all; our Chinese partner companies or the MOC may require certain changes to the terms and conditions of our PSC in conjunction with their approval of any extension of the Qinnan PSC; 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; 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 2009 Annual Report and subsequent filings with the Securities and Exchange Commission.