NEW FINANCING FOR CHINESE COALBED METHANE

China's drive to take advantage of its coal resources is well known. The resultant greenhouse gas emissions will be nothing short of disastrous for the world's climate change challenge. Perhaps it is this resource that will slow China's coal consumption. Drawing off methane greenhouse gases (which would eventually effect the ozone anyway) and reducing their impact by using them as fuel (instead of coal) and turning CH4 into the less potent CO2 would be sort of turning bad news into good news, wouldn't it? Sort of? Wikipedia on coalbed methane.

Far East Energy Corporation Announces Financing For Development Of Coalbed Methane Projects In China
September 3, 2007 (Oil and Gas Online)

WHO
Far East Energy Corporation (Michael R. McElwrath, Chairman/CEO), International Finance Corporation (IFC) (Somit Varma, director/oil, gas mining and chemicals)

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WHAT
IFC will fund fare East Energy’s coalbed methane exploration and development in China.

WHEN
The Far East Energy, IFC subscription agreement was announced August 24, 2007.

WHERE
Far East Energy’s #15 coal seam and its Shouyang Block were noted in a recent international report as of high potential for gas production in impressive quantities.

WHY
- IFC is a member of the World Bank Group. Therefore, it represents Big Bucks and Insider leverage.
- Terms: IFC pays $15 million, gets 11,485,452 shares of Far East common stock ($1.306/share) + warrants (4,019,908 common stock shares at $2.61/share) w/buyback and timelines, no commissions or fees.
- The funding will allow Far East Energy to drill and develop production.

China's coal cunsumption isn't going to get smaller. Might this be an interim (and way less than ideal) alternative?

QUOTES
- McElwrath, Far East: “We certainly are proud that IFC’s first investment in coalbed methane in China is with Far East Energy. We consider this to be a strong vote of confidence in our projects…This financing supports the acceleration of our drilling program, making us better positioned to act…Far East Energy’s #15 coal seam has…gas content on the high end of CBM fields, and indications of a potential gas production profile of 1 million to 2 million cubic feet per day from horizontal wells…”
- Varma, IFC: “Given China’s significant coalbed methane resources, this investment has great potential to help China meet its growing energy needs by using domestic resources in an environmentally conscious manner…IFC is excited to partner…to develop this unconventional energy source.”
- Article: “…IFC, as a member of the World Bank Group, can potentially render political risk mitigation…”