Far East Energy Corp. (OTC:FEEC) Has the Downtrend Reached the Final Stop?
28 Apr 2011

This month the share price of Far East Energy Corp. (OTC:FEEC) extended the paused downtrend until it reached the 40 cents level which for now appears to be safe ground for the stock. Obviously, the company is still unable to offer news or fundamental improvements that could initiate appreciation for FEEC stock.

For a forth session in row the stock closed yesterday at exactly $0.40 for a share. Trading volume was around 404,800 shares, or much less than the 30-day average daily volume of over 1 million shares. Technically, market consolidation suggests that this could be the final stop of FEEC decline, but fundamentally the company holds a market cap of almost $137 million that looks inflated for a company with yet no revenues and financial problems.

News came from Far East Energy lastly in the beginning of the month when the company said that its CEO and President Michael R. McElwrath will present at the IPAA Oil & Gas Investment Symposium on on April 11, 2011. However, it looks like his presentations brought strong disappointment among investors as exactly on that date FEEC share price fell through the $0.43 support.

Far East Energy 10-K for the fiscal year ended December 31, 2010 was filed at the end of March. In it, the company states that it has been able to deliver minimal amounts of gas from the Shouyang Block under the Shouyang Project. Though, there were interruptions due to technical problems and the gas flow was supposed to start again in the middle of last month.

Further, FEEC reports no sales and a net loss of $16.2 million for 2010. Cash at hand at the end of the year was $27.86 million. On the one hand it should be enough to cover the expenses by the end of the year, but on the other the current liabilities exceed $29.6 million. Far East Energy also has to establish stable gas delivery from its project in order to make investors more confident and to prevent the stock from losing more value.

No comments
Leave a comment

To prove you're a person (not a spam script), type the security word shown in the picture. Click on the picture to hear an audio file of the word.
Click to hear an audio file of the anti-spam word