Yesterday the share price of FEEC jumped to $0.55 during the session and the closing price was $0.515, a 6.19% increase from the previous day close. Trading volume was heavy and exceeded 4 million traded shares, which together with some other technical indicators could be a signal that FEEC stock may finally end up its long-term depreciation.
Today Far East Energy said that an independent third party has calculated the Net Present Value of the expected cash flows from FEEC Shouyang Block, located in Shanxi Province, China. According to the report, the NPV using a 10% Discount is $738.3 million (best estimate), while the report gives a High Estimate of $1.46 billion and a Low Estimate of $131.3 million. That could be an indication about the value of FEEC business, but it should by no means be considered a measure of the available reserves at that property.
In the middle of March, the company also announced the completion of a direct offering in which it sold 34.88 million common shares for gross proceeds of $17.53 million. That additional cash is supposed to be used to enhance the drilling of the wells at the Shouyang Block.
The company’s 10-K for the fiscal year ended December 31, 2010 confirms that there has been minimal gas flow and sales from the Shouyang Block under the Shouyang Project Coalbed Methane Purchase and Sales Contract to which FEEC is a beneficiary. The gas delivery has been interrupted though due to testing and commissioning of the installed equipment, and re-commenced in mid- March. FEEC expects that it would be able to move higher gas volumes from the middle of this month.
Filed Under: Press Releases
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