Far East Energy Corporation(OTCBB:FEEC) announced today that its 
Modification Agreement extending the exploration period of its Production 
Sharing Contract for the Enhong and Laochang Area in Yunnan Province has 
received formal approval from the Ministry of Commerce (MofCom) of the People's 
Republic of China (PRC). 

    Michael R. McElwrath, CEO and President, said, "We are delighted to have 
received news of MofCom's approval of the Modification Agreement covering our 
CBM project in Yunnan. We now look forward to MofCom approval of the 
Modification Agreement covering our important Shouyang PSC, in Shanxi Province, 
which was also previously agreed to with CUCBM late last year." 

    Under the terms of the Modification Agreement between Far East Energy 
(Bermuda), Ltd. and China United Coalbed Methane Corporation (CUCBM), Far East 
will relinquish the Enhong Block while retaining the right to continue to 
explore approximately 483 square kilometer (approximately 119,340 acres) 
Laochang Block, which it considers to hold much greater potential. Far East has 
drilled eleven wells in the Laochang Block, compared to only three in the 
Enhong Block, and large portions of Enhong were considered to be marginal or 
non-prospective. The extension moves the end of the exploration period to 
December 31, 2013.

    McElwrath had previously stated, "This is an excellent resolution for 
Yunnan. For the past several years, as we focused our attention on validating 
Shouyang as the premier, or one of the premier CBM Blocks in China, due to its 
uniquely high permeability and pipeline access, we have endeavored to determine 
the value potential of our Yunnan blocks. After reviewing the results of the 
three exploration wells in the Enhong Block and eleven in the Laochang Block, 
as well as considering the very difficult topography in Enhong, we have 
concluded that the Laochang Block has superior potential, and have elected to 
focus all Yunnan activities there."

    Far East Energy Corporation
    Based in Houston, Texas, with offices in Beijing, 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, 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 CUCBM, 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 ("MofCom") may not approve the Modification 
Agreement to the Shouyang PSC (the "Modification Agreement") on a timely basis 
or at all, or, if so, on commercially advantageous terms; MofCom's failure to 
approve the extension of the Modification Agreement by August 30, 2012 could 
limit our ability to borrow additional amounts under the credit facility absent 
a waiver from Standard Chartered Bank; MofCom's failure to approve the 
extension of the Modification Agreement by August 30, 2012 could result in the 
early termination of the credit facility and require immediate repayment of all 
outstanding amounts thereunder; our inability to comply with certain quarterly 
financial covenants, periodic information requirements (including periodic 
updates on strategic transactions, refinancing plans and the status of MofCom 
approval), satisfy certain continuing representations, or remedy a material 
adverse effect to our business or to certain other conditions could result in 
an early termination of the credit facility and require immediate repayment of 
all outstanding amounts thereunder; our Chinese partner companies or MofCom may 
require certain changes to the terms and conditions of the Modification 
Agreement in conjunction with their approval, including reductions in acreage 
or a reduction in the term of the extension for the exploration period; 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; our inability to extract or sell all or a 
substantial portion of our reserves and other resources; we may not satisfy 
requirements for the listing of 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 press release speak only as of the date hereof. We assume no obligation to 
update any of these statements.


    SOURCE: Far East Energy Corporation

    CONTACT: Investor Relations, +1-281-606-1600, 
Investorrelations@fareastenergy.com, or Bruce Huff, +1-832-598-0470, 
bhuff@fareastenergy.com, or Catherine Gay, +1-832-598-0470, 
cgay@fareastenergy.com, all of Far East Energy Corporation