Exhibit 10.46

LOGO [g11108image001.jpg]

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: 832-598-0470
Fax: 832-596-0479

--------------------------------------------------------------------------------

LOGO [g11108image002.jpg]

Mr. Wang Chufeng

November 18, 2005

Page 2

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

 

2