Application for Extension of Phase Two of Exploration Period under Shouyang PSC between Far East Energy Company and China United Coalbed Methane Corporation Ltd.
Far East Energy Company (FEEC) requests a three-month extension of Phase Two of the exploration period under the Shouyang Production Sharing Contract (PSC) with China United Coalbed Methane Corporation Ltd. (CUCBM) in Shanxi province, China. The extension is needed due to technical delays in drilling. The new deadline for Phase Two is March 31, 2006, but the overall five-year exploration period remains unchanged. The extension does not require approval from the Ministry of Commerce. Both parties have agreed to this extension in writing.
Exhibit 10.46
November 18, 2005
Mr. Wang Chufeng
Chief Representative
China United Coalbed Methane Corporation Ltd.
No. A88 Anwai Ave
Beijing, P.R. China
100011
| Re: | Application for the Extension of Phase Two of the Exploration Period under the Shouyang PSC |
Dear Mr. Wang:
Far East Energy Company, (“FEEC”) previously elected to enter Phase Two of the Exploration Period as described in the Production Sharing Contract for the Exploration of Coalbed Methane Resources for the Shouyang Area, in Shanxi province, Qinshui Basin, The People’s Republic of China, (The “Shouyang PSC”). FEEC also previously requested and received a six (6) month extension of Phase Two from China United Coalbed Methane Corporation, Ltd., (“CUCBM”), by letter dated January 24, 2005. Phase Two of the Exploration period is currently set to expire on December 31, 2005. The first well of the Phase Two commitment of the Shouyang PSC is completed, but FEEC has not yet begun drilling the second well. Technical problems and unforeseen difficulties delayed the drilling and completion of the first Phase Two well. In order to complete the minimum work requirement of Phase Two of the Shouyang PSC, FEEC hereby submits an application to extend Phase Two of the Exploration Period until March 31, 2006.
FEEC respectfully requests that CUCBM grant a three (3) month extension of Phase Two of the Exploration Period. It is understood and agreed by FEEC that the three month extension to March 31, 2006 shall not extend the overall Exploration Period of five (5) consecutive Contract Years as set forth in Article 4.2 of the Shouyang PSC. The granting of the requested Phase Three of the Exploration Period from one and one half Contract Year (1.5) to one and one quarter Contract Year (1.25).
Based upon FEEC’s previous experience and dealing. FEEC understands that Ministry of Commerce approval is not required for an amendment that does not extend the overall five (5) year Exploration Period. It is FEEC’s further understanding that this application, if approved, shall be sufficient to extend Phase Two of the Exploration period until March 31, 2006.
400 N. Sam Houston Parkway E., Suite 205 Houston, TX 77060 Phone: 832 ###-###-#### Fax: 832 ###-###-####
Mr. Wang Chufeng
November 18, 2005
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Your approval of this application will be highly appreciated. If you have any questions or concerns, please do not hesitate to contact me or Bruce Huff at FEEC.
| Very truly yours, |
| /s/ Michael R. McElwrath |
| Michael R. McElwrath |
| Chief Executive Officer and President |
Agreed and Accepted this 2nd day of December, 2005.
| By: | /s/ Wang Chufeng | |
| Printed Name: | Wang Chufeng | |
| Title: | Chief Representative |
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