2009-08-13-2009-04-01-2009-04-01

Purchased 75.25% participating interest in Qinnan PSC to develop CBM in China's Shanxi province.

Far East Energy Corp., Houston, (OTCBB: FEEC) plans to farm out assets in China to Arrow Energy International Pte Ltd., a Singapore-based subsidiary of Arrow Energy Ltd., Edmonton, Alberta (Toronto Venture: AOF). Arrow will pay Far East US$8 million in cash for a 75.25% share of Far East's participating interest in the Qinnan production sharing contract to develop coalbed-methane resources in the Shanxi province. Arrow will become the operator under the contract and fund all exploration costs during the exploration period, including Far East's remaining 24.75% participating interest, until Arrow has incurred up to US$30 million of total spending on exploration. If Chinese authorities ultimately approve an overall development plan for all or a portion of the block, Arrow will pay Far East a bonus of US$8 million. Arrow will immediately acquire an exchangeable note from Far East for US$10 million, which will be exchanged for Far East shares at US$0.475 each upon the approval of the Qinnan farm-out agreement. Upon exchange of the note, Arrow will own approximately 21.05 million Far East shares (approximately 11.54% of outstanding shares) and will become the company's largest shareholder. If the conditions under the farm-out agreement are not satisfied by Oct. 15, or a mutually agreed later date, then the note will remain outstanding and mature in March 2011. Far East chief executive Michael McElwrath says, "This transaction successfully culminates a strategy announced several months ago targeted at consummating a strategic transaction that would bring us the required capital to advance exploration of our significant holdings in China, while at the same time securing additional technical resources. Arrow's known expertise in coalbed methane and its financial strength should enable aggressive exploitation of the great potential of our 572,000-acre Qinnan Block." Arrow CEO Nick Davies says, "The Qinnan block represents, in Arrow's view, one of the best prospects for near-term commercial coalbed-methane production in China, and we expect Qinnan to become a material project within the Arrow portfolio."