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Exhibit 10.63

FIRST AMENDMENT TO
 
NON-QUALIFIED STOCK OPTION AGREEMENT
 
This First Amendment to Non-Qualified Stock Option Agreement (this "Amendment")
is entered this 19th day of December, 2008 (the "Effective Date"), by and
between Far East Energy Corporation, a Nevada corporation (the "Company"), and
Michael R. McElwrath (the "Option Holder").
 
 
RECITALS
 
WHEREAS, the Company and the Option Holder entered into that certain
Non-Qualified Stock Option Agreement dated February 2, 2006 (the "Existing
Agreement"); and
 
WHEREAS, the Company and the Option Holder desire to amend the Existing
Agreement on the terms herein provided.
 
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements of the parties herein contained, the parties hereto agree as follows:
 
ARTICLE I
 
Definitions
 
Section 1.01. Capitalized terms used in this Amendment that are not defined
herein shall have the meanings ascribed thereto by the Existing Agreement.
 
ARTICLE II
 
Amendments

Section 2.01.  Section 8.  The first sentence of Section 8 is hereby amended and
restated in its entirety to read as follows:

 
"Upon a Termination of Service for any reason (other than death or Disability),
the unexercised Option may thereafter be exercised during the period ending 90
days after the date of such Termination of Service, subject to any earlier
termination of the Option as provided herein, but only to the extent to which
the Option was vested and exercisable at the time of such termination of
Service."

 
 

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ARTICLE III
 
Miscellaneous
 
Section 3.01. Ratifications.  The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Existing Agreement.  Except as expressly modified and superseded by
this Amendment, the Company and the Option Holder each hereby (a) ratifies and
confirms the Existing Agreement, (b) agrees that the same shall continue in full
force and effect, and (c) agrees that the same are the legal, valid and binding
obligations of the Company and the Option Holder, enforceable against the
Company and the Option Holder in accordance with its respective terms.
 
Section 3.02. Severability.  If, for any reason, any provision of this Amendment
is held invalid, illegal or unenforceable such invalidity, illegality or
unenforceability shall not affect any other provision of this Amendment not held
so invalid, illegal or unenforceable, and each such other provision shall, to
the full extent consistent with law, continue in full force and effect.  In
addition, if any provision of  this Amendment shall be held invalid, illegal or
unenforceable in part, such invalidity, illegality or unenforceability shall in
no way affect the rest of such provision not held so invalid, illegal or
unenforceable and the rest of such provision, together with all other provisions
of this Amendment, shall, to the full extent consistent with law, continue in
full force and effect.  If any provision or part thereof shall be held invalid,
illegal or unenforceable, to the fullest extent permitted by law, a provision or
part thereof shall be substituted therefor that is valid, legal and enforceable.
 
Section 3.03. Headings.  The headings of Sections are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Amendment.
 
Section 3.04. Governing Law.  This Amendment shall be governed by the laws of
Texas, without giving effect to any principles of conflicts of law.
 
Section 3.05. Withholding.  All amounts paid pursuant to the Existing Agreement
and this Amendment shall be subject to withholding for taxes (federal, state,
local or otherwise) to the extent required by applicable law.
 
Section 3.06. Counterparts.  This Amendment may be executed in counterparts,
each of which, when taken together, shall constitute one original agreement.
 
Section 3.07. Waiver.  No term or condition of the Existing Agreement or this
Amendment shall be deemed to have been waived, nor shall there be any estoppel
against the enforcement of any provision of this Amendment or the Existing
Agreement except by written instrument of the party charged with such waiver or
estoppel.  No such written waiver shall be deemed a continuing waiver unless
specifically stated therein, and each such waiver shall operate only as to the
specific term or condition waived and shall not

 
 

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constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
 
Section 3.08. Entire Agreement.  The Existing Agreement and this Amendment,
together, contain the entire understanding between the parties hereto regarding
the subjects thereof except that this Amendment shall not affect or operate to
reduce any benefit or compensation inuring to Option Holder of a kind elsewhere
provided and not expressly provided for in the Existing Agreement or this
Amendment.
 
IN WITNESS WHEREOF, the Company has caused its duly authorized officer or
director to execute and attest to this Amendment, and the Option Holder has
placed this signature hereon, effective as of the latest date below.

FAR EAST ENERGY CORPORATION

By:   /s/ Andrew Lai
Date:  December 19, 2008
Name:  Andrew Lai
 
Title: Chief Financial Officer
     
OPTION HOLDER:
                 
/s/ Michael R. McElwrath
Date:  December 19, 2008
Michael R. McElwrath
 

 
 

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