<PAGE>

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-KSB/A

[X]  Annual report under Section 13 or 15(d) of the Securities Exchange Act of
     1934 for the fiscal year ended December 31, 2002.

Commission file number: 0-32455

                           FAR EAST ENERGY CORPORATION
                           ---------------------------
                 (Name of Small Business Issuer in Its Charter)

          NEVADA                                             88-0459590
          ------                                             ----------
(State or Other Jurisdiction of                           (I.R.S. Employer
(Incorporation or Organization)                        Identification Number)

        400 N. SAM HOUSTON PARKWAY EAST, SUITE 205, HOUSTON, TEXAS 77060
        ----------------------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

                                 (713) 586-1900
                                 --------------
                (Issuer's Telephone Number, Including Area Code)

         Securities registered under Section 12(g) of the Exchange Act:

                               TITLE OF EACH CLASS
                               -------------------
                         Common Stock ($0.001 Par Value)

         Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

                                Yes [ X ] No [ ]
         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB [ ].

         The issuer's total consolidated revenues for the year ended December
31, 2002, were $14,000.

         The aggregate market value of the registrant's voting and non-voting
common equity held by non-affiliates was approximately $162,569,810, based on
the average bid and asked price for the common equity as of the last business
day of the registrant's most recently completed second fiscal quarter. On
December 11, 2003, the number of shares outstanding of the registrant's common
stock, $0.001 par value, was 56,056,461.

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                          <C>
PART I.....................................................................................................   3
         ITEM 1.  DESCRIPTION OF BUSINESS .................................................................   3
         ITEM 2.  DESCRIPTION OF PROPERTY .................................................................   8
         ITEM 3.  LEGAL PROCEEDINGS .......................................................................   8
         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY
         HOLDERS...........................................................................................   9

PART II....................................................................................................   9
         ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.................................   9
         ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS.....................................................  10
         ITEM 7.  FINANCIAL STATEMENTS.....................................................................  16
         ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.....  17

PART III...................................................................................................  17
         ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION
         16(a) OF THE EXCHANGE ACT.........................................................................  17
         ITEM 10. EXECUTIVE COMPENSATION...................................................................  19
         ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNER AND MANAGEMENT AND RELATED STOCKHOLDER
         MATTERS...........................................................................................  22
         ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...........................................  25
         ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.........................................................  25
         ITEM 14. CONTROLS AND PROCEDURES..................................................................  25

INDEX TO EXHIBITS..........................................................................................  28

CERTIFICATIONS.............................................................................................  30
</TABLE>

                                       2

<PAGE>

                                     PART I.

ITEM 1. DESCRIPTION OF BUSINESS

         As used herein, the terms "Company", "we", "our" or "us" refer to Far
East Energy Corporation, a Nevada corporation, and its subsidiaries and
predecessors, unless the context indicates otherwise. The Company was
incorporated as Egoonline.com ("Egoonline"), on February 4, 2000 to engage in
the business of providing Internet-based takeout service for restaurants.
Egoonline changed its name to EZfoodstop.com ("EZfoodstop") on April 26, 2000.
We decided to discontinue our prior Internet-based takeout business in 2001
because, after attempting to operate the business for over a year, it failed as
a going concern. One of our main objectives of the Internet-based takeout
business was to acquire significant media coverage by arranging cross promotions
with national pizza companies and well-established chain restaurants, in order
to grow a solid user base. We expected to derive substantially all revenues from
commissions received from vendors as a percentage of items ordered on the
website. We were unable to obtain media coverage or to develop a sufficient
number of vendors and commissions to sustain the business.

         On June 5, 2002, the Company executed a Sino-Foreign Joint Venture
Contract (the "Contract") with Panjiang Coal-Electricity (Group) Co. Ltd.
("Panjiang") to establish a joint venture limited liability company ("Joint
Venture") in the People's Republic of China to extract and use coalmine methane
gas from six (6) operating Panjiang coalmines, which cover an area of 120 square
kilometers. This Contract was entered into on the Company's behalf by its
whollyowned subsidiary Far East Energy (BVI), Inc., an international business
company incorporated in the British Virgin Islands. The Company withdrew from
the contract in early March 2003 as it did not find the coal mine gas extraction
project economically viable at this time. The Company will continue to work with
Panjiang to develop an economically viable project and mutually beneficial new
contract

         We are in the development stage. In 2002, our activities were limited
to capital formation, acquiring mineral lease interests and planning for the
development of properties in China pursuant to our production sharing contracts,
which give us rights to explore for, develop, produce and sell oil and gas or
coalbed methane ("CBM").

         On January 25, 2002, we entered into a Production Sharing Contract with
the China United Coal Bed Methane Corporation ("CUCBM"), which has exclusive
legal authority over all coal bed methane gas in the People's Republic of China
("PRC"). Pursuant to the Production Sharing Contract, we received the authority
from CUCBM to jointly explore, develop, produce and sell coal bed methane gas in
and from a total area of 1,072 square kilometers in the Enhong and Laochang
areas of Yunnan Province, PRC (closest cities are Qujing City and Kunming). The
Production Sharing Contract was subject to formal ratification by PRC's Ministry
of Foreign Trade and Economic Co-operation ("MOFTEC"). On December 30, 2002,
MOFTEC ratified this Production Sharing Contract. We have the right to earn a
minimum of 60% interest in the joint venture, with CUCBM retaining the remaining
40%. In the event that CUCBM elects to participate at a level less than 40%,
their interest will be reduced proportionately, increasing our participating
interest. We intend to initially drill five (5) exploration wells as well as
eight (8) subsequent exploration wells at a later stage. We began drilling our
first exploratory CBM well in China in October 2003. After completion of these
exploration and pilot wells, CUCBM has the right up to contribute forty percent
(40%) of further expenditures towards their joint venture interest.

         We have another production sharing contract with CUCBM covering the
Zhaotong area of Yunnan Province (closest city is Zhaotong City), which has not
yet been ratified. Upon ratification of this contract, we would have the right
to earn a minimum of 60% interest in the joint venture, with CUCBM retaining the
remaining 40%. In the event CUCBM elects to participate at a level less than
40%, their interest will be reduced proportionately, increasing our
participating interest on a total of 200 square kilometers or 49,000 gross acres

                                       3

<PAGE>

(between 120 and 200 net square kilometers or between 30,000 and 49,000 net
acres based on CUCBM's level of participation).

         CUCBM notified us on November 11, 2003, that the Zhaotong production
sharing contract has not yet been ratified because the Ministry of Land and
Resources of China has not yet received `the reply on the Yunnan Zhaotong
project from the local governmental departments in Zhaotong City'. CUCBM stated
that it `will continue to pursue the early approval of the Ministry of Commerce
to the Contract of Yunnan Zhaotong CBM project as soon as CUCBM obtains the CBM
exploration license of Zhaotong.' In 2003, the Chinese government merged MOFTEC
into the Ministry of Commerce. The Zhaotong contract specifies that we can
commence an exploration program of two (2) exploratory wells and four (4) pilot
wells. If the contract is ratified in late 2003 or early 2004, we believe that
the first exploration well(s) in the Zhaotong Block can be spudded in late 2004.

         On June 5, 2002, the Company executed a Sino-Foreign Joint Venture
Contract (the "Contract") with Panjiang Coal-Electricity (Group) Co. Ltd.
("Panjiang") to establish a joint venture limited liability company ("Joint
Venture") in the People's Republic of China to extract and use coalmine methane
gas from six (6) operating Panjiang coalmines, which cover an area of 120 square
kilometers. This Contract was entered into on the Company's behalf by its wholly
owned subsidiary Far East Energy (BVI), Inc., an international business company
incorporated in the British Virgin Islands. The Company withdrew from the
contract in early March 2003 as it did not find the coal mine gas extraction
project economically viable at this time. The Company will continue to work with
Panjiang to develop an economically viable project and mutually beneficial new
contract.

         Our wholly owned subsidiary Far East Montana, Inc. acquired Newark
Valley Oil & Gas Inc. ("Newark") as of December 31, 2002 through a merger which
was completed on January 21, 2003, when we tendered $100,000 as the first
installment on the $600,000 purchase price. The original agreement terms of the
merger agreement, which was dated December 31, 2002, concerning payment and fund
raising was amended on June 19, 2003. In the original agreement of the $500,000
balance of the purchase price, $200,000 was to be paid on July 21, 2003, and
$300,000 was due to be tendered on January 21, 2004. The merger also required
the Company to raise $2,000,000 in financing on or before June 21, 2003. In the
Amended Plan of Merger Agreement the due date for the $200,000 payment was
extended to September 30, 2003. This was because at the time of the drafting of
the Amended Plan of Merger (May 16, 2003), the Company's anticipated
cash-on-hand did not appear to be sufficient to meet all of its payment
obligations under the PSCs in China and the Plan of Merger related to its
acquisition of leases in Montana. The required $200,000 payment, discounted to
$198,000 due to early payment, was timely paid. The requirement to raise $2
million was extended to December 31, 2003 and in all other respects the Plan of
Merger Agreement remains unchanged. The deadline for the raising of $2 million
was extended because Far East appeared unlikely to raise sufficient financing in
time to meet the June 21, 2003 deadline. The Company satisfied this requirement
by generating in excess of $5 million in financing through an accredited
investors offering that closed on October 7, 2003. Revenue is not expected to be
generated from the Montana venture until approximately late 2004 to early 2005.
As a result of the merger with Newark, we acquired undeveloped oil, gas and
mineral rights and interests in approximately 147,535.10 net acres (165,000
gross acres) in eastern Montana (Phillips and Valley Counties, Montana).

Production of Coalbed Methane Gas

         Of all current natural gas production in the United States, 8-10% comes
from coal beds, or underground coal seams. Natural gas is basically methane gas,
which is a combination of carbon and hydrogen in gas form (CH4). In fact, coal
can contain 3-6 times the natural gas per ton of rock that a conventional
natural gas reservoir contains. Coalbed methane exploration and production
involves drilling into a known coal deposit and extracting the gas that is
contained in the coal. Even though it is natural gas, it is called coalbed
methane or CBM.

                                       4

<PAGE>

         During the time (millions of years) when the coal is formed
(coalification), large amounts of gas are also generated and trapped within the
internal surfaces (pores) of the coal. Many coal beds are at relatively shallow
depths (less than 1,500 meters). Water permeates coal beds and creates enough
pressure to seal the gas within the pores. Drilling into the coal and dewatering
(pumping out) the coalbed allows the gas to escape and be gathered.

         Coal beds almost always contain gas. The gas adheres to the microscopic
surfaces of the coal. This is called adsorption (meaning on the surface, not to
be confused with absorption, which means to be inside of something). On a
molecular level, the gas molecules attach to the coal's internal microscopic
pores. Since coal is also basically carbon, the attraction of the gas to the
solid is very natural. Coal beds (seams) are therefore usually loaded with gas.

         Gas production from coal beds is generally less expensive than
conventional gas exploration. On average, a coalbed gas well will cost anywhere
from $50,000 to $350,000 to complete, compared to conventional gas wells which
often cost between $5 million and $10 million because natural gas in
conventional formations is usually found at substantially greater depths than
coalbed methane.

         Coal is formed from ancient environments rich in plant life such as
swamps, wetlands and marshes. Hundreds of millions of years ago, massive earth
movements and geologic events slowly covered up these environments. Various
coalbed methane basins have a wide variety of gas content. Gas content is
expressed in standard cubic feet per ton. This means if you have a block of coal
roughly 3 ft. x 3 ft. x 3 ft. (approximately a ton of coal) you could have
anywhere from 50 to 1,000 cu. ft. of gas within that block. Consequently, more
gas is typically present in greater quantities of coal.

         Even after a coalbed has been identified as containing a commercial
quantity of gas, a remaining crucial factor is to be able to retrieve the gas
from the coal. This requires that the coal has sufficient permeability, which
means that the gas can migrate, or flow, through the coal to the gas well that
has entered the coal seam. Permeability is based upon how many fractures, or
cleats, the coal has and how close they are to each other. The more cleats coal
has, the better the coal's permeability.

         To measure the permeability, the industry uses a fancy word, millidarcy
(md). This commonly used term is merely a unit of measurement in one-thousandths
(milli) and refers to rate of flow. As an example, sandstone may have a
permeability of 30 mds for oil or water or gas to flow through it, while coal,
being less permeable, may have 1 md which means the rate of flow is 30 times
slower. Gravel or loose sand would have a very high md rating since liquids
would flow through it very quickly.

         Gas within coal beds becomes mobile primarily through the flow
mechanism of the coal, which is from cleating (small fractures within the coal).
Gas is stored in the micropores of the coal. When the water in the coal seam is
reduced and water pressure is exerted against the coal, gas is released and
diffuses into the cleats. Since gas is lighter than air, it flows to the well
bore through the cleat system as well as any of the other cracks, crevices and
fractures that the coal bed has. The looser the particles and the more spaces,
fractures, cracks or air space a solid has the easier it is for something to
flow through it. Hence if a reservoir has a high millidarcy (md) rating the
better the production flow will be. In CBM from coal seams greater than 5-6 feet
in thickness, anything above 1 md is usually acceptable.

         If a coal seam has a permeability above 4-5 md, then more gas will flow
through it and be recovered. If it is a thick seam that makes it even better. If
it has a high gas content also, then you have the best of all three parameters
in your favor.

         Coal seams have many different characteristics. You could have an
unacceptably low permeability seam, but with enough thickness, the otherwise
deficient permeability would be overcome. In this case, the gas

                                       5

<PAGE>

would flow out slowly, but because the coal seam is thick, more of the slow
flowing gas would be produced since you have a thick area from which to collect.

         A formula used by engineers that signifies the potential of a seam or
seams compared to other seams is Kh. K stands for permeability and h for
thickness. It signifies the potential of a seam or seams compared to other
seams. The higher the Kh, the more gas one would expect to be able to extract.
If a coal seam is 30 feet thick with 2 md, the Kh is 60 (30 x 2). If the coal
seam is only 10 feet thick but the permeability is 6, then the Kh is also 60.
What this means is that you will probably get the same amount of gas out of both
seams.

         If permeability is low, then a closer well spacing on the surface can
be used. Utilizing 160 acre (a quarter of a square mile block) spacing per well
typically retrieves a significant amount of gas over a 10-20 year period. If
permeability is low, a well could be spaced every 80 acres to achieve the same
production in less time.

Coal Ranking

         Methane or natural gas is contained in all ranks of coal. The most gas
is contained in the highest rank coal, which is called anthracite. Unfortunately
anthracite has very low permeability. Semi-anthracite coal typically has higher
quantities of gas than anthracite coal, but may still contain significant cleats
(fractures) as well, making it more permeable. Far East Energy's ConocoPhillips
project is semi-anthracite coal that has a favorable cleat structure, which
should make the permeability favorable.

         The next lesser coal rank is bituminous coal which contains less gas
per ton but usually has a good cleat structure, which allows for better flow or
permeability of the gas through the coal. Far East's other major projects,
Enhong and Laochang have bituminous and semi-anthracite coal.

Testing a Prospect

         One attractive feature of CBM is that it is relatively inexpensive to
drill shallow wells (less than 1,500 meters) and test the coal seams.
Additionally, the location, extent and thickness of the coal seams already have
been established by previous coal mining activity, which also commonly results
in the availability of existing geologic data.

Isotherm Tests

         `Iso' means equal and `therm' is a unit of heat. Isotherm tests are lab
tests that identify how much gas can be released from a ton of coal at various
heat and pressure levels. These tests provide important information on the
saturation level of the coal. All three of Far East's projects have produced
favorable isotherm tests meaning saturation levels are favorable. In fact, gas
content from the Shanxi Project on the Qinnan and Shouyang blocks in China
compares favorably with that of typical coal from the San Juan Basin and Black
Warrior Basin - both prolific U.S. CBM basins.

Comparable Isotherm Tests

<TABLE>
<CAPTION>
Basin                                     Cu. Ft. per Ton
-----                                     ---------------
<S>                                       <C>
San Juan (New Mexico)                        300-700
Black Warrior (Alabama)                      250-500

Far East's Shanxi Project                   400-1000
</TABLE>

                                       6

<PAGE>

Dewatering

         To produce methane from coalbeds, water must be removed from the coal
seams to decrease reservoir pressure and release the gas. After desorption
(changing from an adsorbed state to a surface or gaseous or liquid state) from
the coal matrix, the gas diffuses through the coalbed's cleats and fractures
toward the well bore. Substantial dewatering of the coalbed is required
initially. Water production declines as methane gas production increases.
Produced water disposal presents major economic and environmental challenges for
operators. Those costs alone can determine the feasibility of coalbed methane
projects.

Horizontal Drilling

         A potentially significant development is the ability to engage in
horizontal drilling. This would allow a well bore to be in contact with hundreds
of feet of coal since the drill stem, when it hits the coal seam, is redirected
from a downward angle to a horizontal plane and simply follows the coal bed for
hundreds of feet (sometimes 500 feet) in various directions. This access would
change the dynamics of the gas recovery dramatically. In a normal well you would
have a drill hole 8 inches wide contacting and hollowing out a coal seam 10 feet
thick. With horizontal drilling, you could go directly along the coal seam for
hundreds of feet or more in many directions, increasing your contact area
thereby impacting efficiency by 10-20 times. Of course, horizontal wells are
more costly than traditional wells, but are often more cost effective depending
upon the permeability.

         The technology improvements and cost reduction in horizontal drilling
in the last 3 years have been well documented. The benefits of horizontal
drilling for coalbed methane are far more profound than for conventional oil and
gas wells because of the permeability factor. Coal with low permeability could
have a dramatic increase in flow rates with horizontal drilling, since so much
more of the coal seam would be exposed to the well bore. This would allow
significantly more gas production. Far East will consider the utilizing
horizontal drilling if it successfully concludes the exploratory phases of its
contracts, with the decision being based on permeability and cost efficiency.

Competition

         The Company will be operating in the competitive area of natural gas
exploration, development and production in China and Montana. The Company's
competitors include major integrated oil and gas companies and substantial
independent energy companies, many of which possess greater financial and other
resources than the Company.

Regulations

         The Company's operations will be subject to numerous laws and
regulations governing the discharge of materials into the environment or
otherwise relating to environmental protection. These laws and regulations
require the acquisition of a permit before drilling commences, restrict the
types, quantities and concentration of various substances that can be released
into the environment in connection with drilling and production activities,
limit or prohibit drilling activities on certain lands lying within wilderness,
wetlands and other protected areas, and impose substantial liabilities for any
pollution resulting from the Company's operations. The cost of complying with
these environmental laws is expected to be $500 per well per year.

Employees

         As of March 27, 2003, the Company had a total of fifteen (15)
employees, all of which were employed full-time.

                                       7

<PAGE>

ITEM 2. DESCRIPTION OF PROPERTY

         The Company office is located at 400 N. Sam Houston Parkway East, Suite
205, Houston, Texas 77060. The office, which consists of approximately 2,200
square feet, is leased through January 31, 2004 at a cost of $3,000 per month.

         Undeveloped Lease Acreage

         As of December 31, 2002, we owned leasehold interests (or, in the case
of Chinese properties, had rights under production sharing contracts) covering
the following undeveloped lease acreage.

United States:

<TABLE>
<CAPTION>
                                           Gross Acres                Net Acres
<S>                                        <C>                        <C>
Phillips & Valley Counties, Montana(1)       165,000                   147,535
</TABLE>

(1) This property was acquired in the merger with Newark on December 31, 2002.

China:

<TABLE>
<CAPTION>
                                                                Net Acres (1)
                                           Gross Acres       Maximum     Minimum
<S>                                        <C>               <C>         <C>
Enhong and Laochang Areas,                  265,000           265,000    159,000
Yunnan Province

Zhaotong Area, Yunnan Province (2)           49,000            49,000     30,000
</TABLE>

     (1) Our rights to develop properties pursuant to production sharing
         contracts on the above listed Chinese properties are subject to the
         right of CUCBM to elect to participate in development. If they elect to
         participate, CUBM, in its discretion, may proportionally reduce our net
         acreage up to the amount indicated above to the minimum levels shown.
         If they elect not to increase their participation, our net acreage
         levels will be at the maximum shown above.

     (2) The Zhaotong Area contract has not yet been ratified by CUCBM, and
         if it is not ratified we will have no right to develop this acreage.

ITEM 3. LEGAL PROCEEDINGS

         There are no legal proceedings filed, or to the Company's knowledge,
threatened against the Company that the Company believes would have,
individually or in the aggregate, a material adverse effect upon its financial
condition or results of operations.

         On April 25, 2003, the Company received notice that TMP Worldwide, Inc.
and Hudson Highland Group Global Resources Management, Inc. ("TMP-Hudson") had
filed a lawsuit against it in the 151st Judicial District Court in Harris
County, Houston, Texas. TMP-Hudson alleged that, pursuant to contract,
TMP-Hudson had transferred all of the employees (only those employees in the
United States) of Far East Energy to TMP- Hudson's payroll and then supplied
them back to Far East Energy and that Far East Energy had failed to make payment
for a portion of these services. This was a "payrolling" or employee leasing
arrangement entered into

                                       8

<PAGE>

for the purpose of reducing the administrative burden upon the Company's
corporate staff caused by the burdens associated with keeping track of payroll,
administering benefits, accounting for and paying all proper payroll deductions
and taxes, and other miscellaneous associated tasks. On May 19, 2003, TMP filed
a motion for nonsuit in connection with a settlement agreement. The settlement
of this litigation required our payment of a total of $462,539.00 which
represents services received and related benefits and the final required payment
due pursuant to the settlement was made on September 3, 2003.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         The Company held a special meeting of shareholders ("Special Meeting")
on March 3, 2003, which was adjourned until March 4, 2003, for the following
purposes: (1) to approve an amendment to the Company's articles of incorporation
to increase the number of shares of common stock authorized for issuance from
100,000,000 to 500,000,000 ("Proposal 1"); (2) to approve an amendment to the
Company's articles of incorporation to authorize a class of 500,000,000 shares
of preferred stock, par value $0.001 ("Proposal 2"); and (3) to ratify an
amendment to the Company's bylaws to allow the board of directors to fix, in
advance, a record date not more than 60 or less than 10 days before the date of
any shareholder meeting as the date as of which shareholders entitled to notice
of and to vote at such meetings must be determined ("Proposal 3"). All of the
proposals were approved by an affirmative vote of the holders of a majority of
the shares of common stock present or represented at the special meeting.
Specifically, Proposal 1 received 23,678,475 shares in favor, while Proposal 2
received 23,578,475 shares in favor, and Proposal 3 received 23,478,475 shares
in favor. No shares were voted against any proposal, nor were any broker
non-votes cast. However, 100,000 shares were withheld from Proposal 2 and
200,000 shares were withheld from Proposal 3.

                                     PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The Company's common stock received the symbol "EZFS" on the OTC
Bulletin Board on February 15, 2001. On January 16, 2002, the Company's symbol
was changed to "FEEC" to reflect the Company's name change to Far East Energy
Corporation. Because no meaningful trading market for the Company's common stock
occurred until 2002, the table below sets forth the high and low sales prices
for the Company's common stock for only the quarters of 2002.

         The quotations below reflect inter-dealer prices, without retail
markup, markdown or commission and may not represent actual transactions. All
figures reflect an eighteen-for-one (18-for-1) forward stock split which became
effective on January 1, 2002.

<TABLE>
<CAPTION>
Year     Quarter          High      Low
<S>      <C>              <C>      <C>
2002     First *          $3.95    $2.50
         Second           $4.49    $3.15
         Third            $4.52    $3.19
         Fourth           $4.60    $3.60
</TABLE>

     *Note that trading in our common stock on the OTC BB did not begin on
approximately January 31, 2002.

Shareholders

         As of March 17, 2003, there were approximately seventy-five (75)
shareholders of record holding a total of 47,410,500 shares of common stock.
However, as of September 30, 2003, the Company believed it had a minimum of 587
total shareholders.

                                       9

<PAGE>

Dividends on the Common Stock

         The Company has not declared a cash dividend on its common stock in the
last two fiscal years and the Company does not anticipate the payment of future
dividends. There are no other restrictions that currently limit the Company's
ability to pay dividends on its common stock other than those generally imposed
by applicable state law.

Recent Sales of Unregistered Securities

         On January 9, 2003, the Company sold 60,000 shares of its common stock
at $2.50 per share to one (1) offshore accredited investor for total offering
proceeds of $150,000. After payment of a ten percent (10%) commission, or
$15,000, to the broker who introduced this offshore person to the Company, net
proceeds were $135,000. This sale was made pursuant to exemptions from
registration under the Securities Act of 1933 (the "Act"), including but not
limited to Sections 3(b) or 4(2). The broker had a previous business
relationship with the investor.

         From April 30, 2003 through October 7, 2003, the Company effected
private placement sales of 8,935,960 investment units at $0.65 per unit to
approximately ninety-six (96) accredited investors, of whom twelve (12) reside
in the United States or are U.S. citizens. Each investment unit consists of one
share of common stock and a warrant to purchase one share of Common stock at
$1.00, over the next two years. The Warrants may be exercised immediately after
issuance until the earlier of (i) two (2) years from the date of the Warrant
Agreement, or (ii) the date upon which the Warrants are redeemed by the Company
(which may occur at $.01 per share in the event the Company provides at least 30
days prior written notice, the average closing price of the common stock for the
15 days prior to such written notice exceeds $2.00, and the Company limits its
redemption to 25% of the Warrant holder's total purchasable shares per month).
Total proceeds from the sale of securities were $5,808,374. This private
placement was made pursuant to exemptions from registration under Sections 3(b)
and 4(2) of the Securities Act of 1933.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS

Forward-looking Information

         This information statement contains forward-looking statements. For
this purpose, any statements contained herein that are not statements of
historical fact may be deemed to be forward-looking statements. These statements
relate to future events or to our future financial performance. In some cases,
you can identify forward-looking statements by terminology such as "may,"
"should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential" or "continue" or the negative of such terms or other
comparable terminology. These statements are only predictions. Actual events or
results may differ materially. There are a number of factors that could cause
our actual results to differ materially from those indicated by such
forward-looking statements.

         Although the Company believes that the expectations reflected in the
forward-looking statements are reasonable, it cannot guarantee future results,
levels of activity, performance, or achievements. Moreover, it does not assume
responsibility for the accuracy and completeness of such forward-looking
statements. The Company is under no duty to update any of the forward- looking
statements after the date of this information statement to conform such
statements to actual results. The foregoing management's discussion and analysis
should be read in conjunction with the Company's financial statements and the
notes herein.

Plan of Operation

         The Company's operations for the year ended December 31, 2002 consisted
of searching for suitable oil and gas prospects to acquire, and developing
drilling and production plans. We executed two (2) Production

                                       10

<PAGE>

Sharing Contracts with China United CoalBed Methane Corporation ("CUCBM") on
January 25, 2002. Pursuant to the two Production Sharing Contracts,which are
subject to formal ratification by the Ministry of Foreign Trade and Economic
Cooperation ("MOFTEC"), we received the authority from CUCBM to jointly explore,
develop, produce and sell coalbed methane gas in and from a total area of 1,272
square kilometers or 314,000 gross acres (between 763.2 and 1272 net square
kilometers or between 189,000 and 314,000 net acres for the Far East Energy
share, depending upon the extent to which CUCBM decides to participate) in the
Enhong, Laochang and Zhaotong areas of the Yunnan Province of the People's
Republic of China.

         On December 30, 2002, MOFTEC ratified the Production Sharing Contract
("PSC") with CUCBM to jointly explore, develop, produce and sell coal bed
methane gas in and from a total area of 1,072 square kilometers or 265,000 gross
acres (between 643.2 and 1072 net square kilometers or between 159,000 and
265,000 net acres for the Far East Energy share, depending upon the extent to
which CUCBM decides to participate) in the Enhong and Laochang areas of Yunnan
Province,PRC (closest cities are Qujing City and Kunming). This PSC commits the
Company to drilling five (5) exploration wells and eight (8) pilot wells in the
Yunnan province during the next three-year exploration and production period.
Pilot wells refer to the drilling of wells aimed at evaluating, through pilot
production of coalbed methane, the potential commercial value of coalbed methane
in a specific area. Our first well was spudded on the Enhong-Laochang coalbed
methane block in Yunnan Province in late October, 2003, and the drilling of that
well continues as of the date of this filing. One (1) additional well is
expected to be commenced in the fourth quarter of 2003, and then a third well
will be drilled on the Enhong-Laochang Block in January of 2004. Approximately
$900,000 is expected to be utilized to drill these three wells and conduct
desorption tests, and to pay expenses for salaries for CUCBM, Assistance Fees to
CUCBM, training fees, and other related expenses. It is believed that all three
of these first exploration wells on the Enhong-Laochang Blocks will be completed
by late January or early February, 2004; and then in the February to June
timeframe all three wells will be fractured and tested. Also, in the February to
April 2004 timeframe, sites for the two remaining required exploration wells
will be selected and the drilling of these wells will start. It is anticipated
that by the end of June all five wells will be undergoing, or will have already
undergone, dewatering testing. Full associated costs for the Enhong - Laochang
Project for the period from February to June (which costs will include the costs
of drilling the two remaining exploration wells, and then fracturing, testing,
and dewatering all five wells) are expected to be approximately $900,000.

         The Production Sharing Contract covering the Zhaotong area of Yunnan
Province (closest city is Zhaotong City) has not yet been ratified. Upon
ratification of the PSC, the Company has the right to earn a minimum of 60%
interest in the joint venture, with CUCBM retaining the remaining 40%. In the
event CUCBM elects to participate at a level less than 40%, their interest will
be reduced proportionately, increasing the Company's participating interest on a
total of 200 square kilometers or 49,000 gross acres (between 120 and 200 net
square kilometers or between 30,000 and 49,000 net acres based on CUCBM's level
of participation). As indicated by the November 11, 2003 letter from China
United Coalbed Methane Corporation, our PSC for Zhaotong has not yet been
ratified because the Ministry of Land and Resources of China has not yet
received "the reply on the Yunnan Zhaotong project from the local governmental
departments in Zhaotong City". According to the letter, "CUCBM will continue to
pursue the early approval of the Ministry of Commerce to the Contract of Yunnan
Zhaotong CBM project as soon as CUCBM obtains the CBM exploration license of
Zhaotong." If and when ratified, the Zhaotong PSC specifies that the Company can
commence its exploration program of two (2) exploratory wells and four (4) pilot
wells. Assuming ratification in late 2003 or early 2004, the Company believes
that the first exploration well(s) in the Zhaotong Block will be spudded in late
2004.

         Our wholly owned subsidiary Far East Montana, Inc. acquired Newark
Valley Oil & Gas Inc. ("Newark") as of December 31, 2002 through a merger which
was completed on January 21, 2003, when we tendered $100,000 as the first
installment on the $600,000 purchase price. The original agreement terms
concerning payment and fund raising, was amended on June 19, 2003. In the
original agreement of the $500,000 balance of the purchase price, $200,000 was
to be paid on July 21, 2003, and $300,000 was due to be

                                       11

<PAGE>

tendered on January 21, 2004. The merger also required the Company to raise
$2,000,000 in financing on or before June 21, 2003. In the event such financing
was not secured within 120 days of Closing, the Company would have been in
default of this Agreement and the transaction would have been subject to
rescission. In the event of rescission, the Company would have transferred all
of the outstanding equity interests in Newark to North American and North
American would have returned to the Company the 1,600,000 restricted common
shares of the Company, and North American would have retained any monies
tendered pursuant to the Agreement. In the Amended Plan of Merger Agreement the
due date for the $200,000 payment was extended to September 30, 2003. This was
because at the time of the drafting of the Amended Plan of Merger (May 16,
2003), the Company's anticipated cash-on-hand did not appear to be sufficient to
meet all of its payment obligations under the PSCs in China and the Plan of
Merger related to its acquisition of leases in Montana. The required $200,000
payment, discounted to $198,000 due to early payment, was timely paid. The
requirement to raise $2 million was extended to December 31, 2003 and in all
other respects the Plan of Merger Agreement remains unchanged. The deadline for
the raising of $2 million was extended because Far East appeared unlikely to
raise sufficient financing in time to meet the June 21, 2003 deadline. The
Company satisfied this requirement by generating in excess of $5 million in
financing through an accredited investors offering that closed on October 7,
2003. The Company assumed liabilities of $375,000 due to Gulf Coast Oil and Gas,
the original sellers of the leases acquired in the merger. To date $175,000 has
been paid and the remaining $200,000 is due on January 5, 2004.

         As a result of the merger with Newark, we acquired undeveloped oil, gas
and mineral rights and interests in approximately 147,535.10 net acres (165,000
gross acres) in eastern Montana (Phillips and Valley Counties, Montana) and are
in the process of developing plans for an exploratory drilling program. Between
January 28, 2003 and September 30, 2003, the Company acquired an additional
1,884 net acres (2,153 gross acres) of oil and gas leases in eastern Montana.
These leases are contiguous or nearly contiguous with the leases already
acquired in the Newark merger. The acquisition cost for these leases was
$16,388. We are in the process of developing plans for an exploratory drilling
program on our Montana leases, which we hope will demonstrate the existence of
gas in commercial quantities. Revenue is not expected to be generated from the
Montana venture until approximately late 2004 to early 2005.

         On March 19, 2003, the Company entered into a Memorandum of
Understanding ("MOU") with a Conoco Phillips subsidiary, Phillips China Inc.,
which sets forth the terms and conditions of an agreement for the Company to
acquire a net undivided forty percent (40%) of Phillips' seventy percent (70%)
interest in both the Shouyang PSC (near Taiyuan City) and the Qinnan PSC (near
Jincheng and Qinshui). On July 17, 2003, Far East and Phillips signed two
Farmout Agreements on the Qinnan and Shouyang CBM blocks in Shanxi Province,
P.R.C. and also signed an Assignment Agreement on the two blocks. These
agreements formalized the Company's acquisition of an undivided forty percent
(40%) working interest from Phillips' (70%) interest. The breakdown is Far East
forty percent (40%), Phillips thirty percent (30%) and CUCBM thirty percent
(30%). The Assignment Agreement has been received by CUCBM and, as indicated in
the September 27, 2003 letter from CUCBM to Far East, CUCBM has informed the
Company that this project will be approved by CUCBM and submitted to the
Ministry of Commerce as soon as "the new management of CUCBM is settled down."
We anticipate final approval in late 2003 or early 2004.

         The Farmout Agreements obligate Far East to fracture stimulate and
production test three exploration wells that were drilled by Phillips with Far
East paying 100% of the cost for these tests. Upon the satisfactory completion
of the testing, which will begin if and when MOFTEC ratification is provided,
Far East shall have the option to give notice to extend into the second phase of
exploration by drilling three (3) additional wells. The Company will be
responsible for 100% of the costs of the second phase of exploration and the
drilling of three (3) wells. Upon Far East successfully completing the second
phase, Phillips will have the option to elect to either retain its net undivided
thirty percent (30%) participating interest, or take a five percent (5%)
overriding royalty interest ("ORRI") on the contractor's overall Participating
Interest share under the PSCs. The ORRI will be capped at five percent (5%) of
the current contractor's seventy percent (70%) Participating

                                       12

<PAGE>

Interest, or a three and a half percent (3.5%) ORRI on a one hundred percent
(100%) interest basis. Under the terms of the Farmout Agreement, within thirty
(30) days of final approval of the Assignment by the Ministry of Commerce, the
Company must post a $1,000,000 surety bond to act as a work performance
guarantee covering all aspects of the evaluation and work program to test the
three existing wells, which the Company is attempting to obtain now. In the
first six months of 2004, approximately $750,000 is expected to be utilized to
fracture and test the gas flows from the three (3) wells drilled by
ConocoPhillips, cover costs related to CUCBM Joint Management Committee salary
fees, training fees, exploration fees and assistance fees as outlined in the
Production Sharing Contract, and to pay ConocoPhillips $76,052 for CBM equipment
and materials associated with the project.

         In addition, approximately $750,000 is expected to be spent on some
combination of overhead and general and administrative expenses of the Company,
drilling operations in Montana, and obtaining the required $1 million surety
bond required by Conoco for the Qinnan/Shouyang project above.

         Business operations in China and the United States will continue to
increase our expenses and, if such operations are successful, our revenues. We
are moving forward in the natural gas industry in China by virtue of the
ratification of the Production Sharing Contract to explore, develop, produce and
sell coal bed methane gas in the Enhong and Laochang areas, and the acquisition
of undeveloped oil and gas rights and interests in the state of Montana, and the
ConocoPhillips Farmout Agreement in Shanxi Province. The Company does not expect
significant changes in the number of its employees.

         The auditors' opinions with respect to our financial statements for
fiscal years 2002 and 2001 contain the qualification that there is substantial
doubt about our ability to continue in business as a going concern. Our ability
to continue as a going concern is dependent upon our ability to raise
substantial funds for use in development activities, and upon the success of the
Company's planned exploration and development activities. Since there can be no
guarantee of future fundraising success, and since the success of exploratory
drilling can never, by definition, be guaranteed, it must be stated that there
is substantial doubt about the Company's ability to continue as a going concern.
However, management believes that the Company will continue to be successful in
raising the funds necessary to explore for gas and, assuming success in those
exploratory efforts, to raise the funds necessary for production and
development. Management believes that, through December 31, 2004, the Company
will be able to raise funds sufficient to assure satisfaction of its operating
capital needs/plans (this would include the drilling of four more exploratory
wells on the Enhong-Laochang blocks, and the drilling of three additional
exploration wells on the ConocoPhillips tract in addition to the operational
activities outlined herein above) and financial obligations through December 31,
2004. These funds are anticipated to be raised through a combination of the
exercise of warrants issued to investors in conjunction with the recently
completed private offering and an additional accredited investors offering in
the first quarter of next year.

         Because we have acquired an undeveloped natural resource that will
require substantial exploration and development, we do not expect to generate
meaningful revenues until at least late 2004. Expenses for the second half of
2004 will have to be financed through cash flow, which may not yet be available
if production and sales of coalbed methane gas are not significant, or through
future financings of equity and/or debt. These factors raise substantial doubt
about the Company's ability to continue as a going concern. In the event we do
not raise funds sufficient to finance our current development plans for projects
in Yunnan and Montana, we may fail.

RESULTS OF OPERATIONS

         The following discussion should be read in conjunction with the audited
financial statements and notes thereto included in the Company's annual report
on Form 10-KSB for the fiscal year ended December 31, 2001; and should further
be read in conjunction with the financial statements included in this report.
Comparisons made between reporting periods herein are for the year ended
December 31, 2002 as compared to the year

                                       13

<PAGE>

ended December 31, 2001. A comparison of the periods in 2002 relative to the
same periods in 2001 may not be meaningful, as the Company did not have
exploration, development, extraction and sale of coalbed methane gas activities
in China during the year ended December 31, 2001 versus its current focus. Year
Ended December 31, 2002 Compared To Year Ended December 31, 2001

         The Company had no operating revenue for the year ended December 31,
2002 and no revenue for the same period in 2001 The Company's total expenses for
the year ended December 31, 2002 increased materially to $2,144,000 as compared
to $15,000 for the same period in 2001. The increase in expenses during 2002 is
due to our implementation of plans to explore, and, hopefully, develop, extract
and sell coalbed methane and coal mine methane gas in China. Specifically, in
2001 we incurred none of the following expenses, while during the year ended
2002, we incurred $380,000 for geologic and engineering service expenses,
$296,000 for other consulting and professional service expenses, $596,000 for
compensation expenses, and $575,000 for travel expenses. Our legal and
accounting expense increased to $66,000 during the year ended 2002, as compared
to $3,000 for the same period of 2001. Finally, our general and administrative
expense increased to $231,000 for the year ended December 31, 2002, as compared
to an expense of $12,000 for the year ended December 31, 2001.

         These increased expenses resulted in our operating loss increasing
materially to $2,144,000 for the year ended December 31, 2002, as compared to
$15,000 for the same period of 2001. As is the case with our increased expenses,
our increased operating loss is also attributable to our efforts to explore,
develop, extract and sell coalbed methane and coal mine methane gas in China and
Montana.

LIQUIDITY AND CAPITAL RESOURCES

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001

         As of December 31, 2002, the Company's primary source of liquidity
included cash and cash equivalents of $1,008,000, as compared to $27,000 as of
December 31, 2001. This increase is due to our 2003 sales of 5,250,500 shares of
common stock at $0.65 per share to a group of accredited entities for a total
offering price of $3,412,825. The offering was made pursuant to exemptions from
registration under Section 4(2) of the Securities Act of 1933.

         Although there was a net loss from our operating activities, due to
financing there was an increase in the Company's liquidity. Net cash provided
from financing activities increased to $3,052,000 for the year ended December
31, 2002 from $0 for the same period in 2001.

         As there were no operating revenues for the fiscal year ended December
31, 2002, the Company anticipates that the commencement of its business
operations in China and the United States will drastically increase expenses and
if such operations are successful, revenues.

         Our current cash position is expected to satisfy our operating needs
and financial obligations through mid-2004. We anticipate incurring expenses of
approximately $800,000 through the first quarter of 2004 associated with
exploration and development activities. It is anticipated that significant
equipment will be purchased. Additionally in the first quarter of 2004, we
expect to (i) provide a $1,000,000 surety bond to ConocoPhillips in connection
with the joint exploration and development by the Company and ConocoPhillips of
coalbed methane projects in the Shanxi Province in China as well as (ii) incur
expenses of approximately $200,000 for the Montana leases. We will pay the
remaining $200,000 due to Gulf Coast Oil and Gas and $300,000 due to North
American Oil and Gas under the Newark Valley Oil and Gas Merger Agreement.

         We intend to continue financing efforts to support our current and
proposed business operations in China and Montana. The ability of the Company to
continue as a going concern is dependent upon its ability to raise substantial
funds for use in development activities, and upon the success of the Company's
planned exploration and development activities. Since there can be no guarantee
of future fundraising success, and

                                       14

<PAGE>

since the success of exploratory drilling can never, by definition, be
guaranteed, it must be stated that there is substantial doubt about the
Company's ability to continue as a going concern. However, management believes
that the Company will continue to be successful in raising the funds necessary
to explore for gas and, assuming success in those exploratory efforts, to raise
the funds necessary for production and development. Management believes that, in
the near term, the Company will be able to raise funds sufficient to assure
satisfaction of its operating capital needs/plans (this would include the
drilling of four more exploratory wells on the Enhong-Laochang blocks, and the
drilling of three additional exploration wells on the ConocoPhillips tract, in
addition to the operational activities outlined herein above) and financial
obligations through December 31, 2004. These funds are anticipated to be raised
through a combination of the exercise of warrants issued to investors in
conjunction with the recently completed private offering and an additional
accredited investors offering in the first quarter of next year.

Critical Accounting Policies

         Our accompanying interim financial statements are unaudited. In the
opinion of management, the interim data includes all adjustments, consisting
only of normal recurring adjustments, necessary for a fair presentation of the
results for the interim period.

         The financial statements included herein have been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosure normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. Management believes
the disclosures made are adequate to make the information not misleading and
recommends that these condensed financial statements be read in conjunction with
the financial statements and notes included in our Form 10-KSB as of December
31, 2002. Operating results for the nine months ended September 30, 2003 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2003. For further information, refer to the consolidated financial
statements and footnotes thereto included in our Annual Report on Form 10-KSB
for the year ended December 31, 2002.

         Our financial statements and accompanying notes are prepared in
accordance with generally accepted accounting principles. Preparing financial
statements requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. These estimates and
assumptions are affected by management's application of accounting policies. Our
critical accounting policies include the successful efforts method of accounting
for property and equipment, accounting for income taxes, accounting for
environmental matters, and foreign currency translation.

         We also apply SFAS No. 128, Earnings Per Share, for the calculation of
"Basic" and "Diluted" earnings per share. Basic earnings per share includes no
dilution and is computed by dividing income available to common stockholders by
the weighted average number of common shares outstanding for the period. Diluted
earnings per share reflects the potential dilution of securities that could
share in our earnings.

         We apply APB Opinion 25, Accounting for Stock Issued to Employees, and
related interpretations in accounting for our stock option plan and have adopted
the disclosure-only provisions of SFAS No. 123, as amended by SFAS No. 148,
Accounting for Stock-Based Compensation. Accordingly, no compensation cost for
stock options granted has been recognized, as all options granted under these
plans had an exercise price equal to or greater than the market value of the
underlying common stock on the day of grant.

         We also apply SFAS No. 52, Foreign Currency Translation, which requires
that the translation of the applicable foreign currency into U.S. dollars be
performed for balance sheet accounts using current exchange rates in effect at
the balance sheet date and for revenue and expense accounts using a weighted
average

                                       15

<PAGE>

exchange rate during the period. The gains or losses resulting from such
translation are included in the consolidated statements of stockholders' equity
and comprehensive income.

ITEM 7. FINANCIAL STATEMENTS

         The Company's financial statements for the fiscal year ended December
31, 2002 are attached hereto beginning on page F-1.

                                       16

<PAGE>

                           FAR EAST ENERGY CORPORATION
                                 AND SUBSIDIARY

                        Consolidated Financial Statements

                           December 31, 2002 and 2001
                   (With Independent Auditors' Report Thereon)

                                       F-1

<PAGE>

                          Independent Auditors' Report

The Board of Directors
Far East Energy Corporation and Subsidiary

We have audited the accompanying consolidated balance sheet of Far East Energy
Corporation and Subsidiary (a development stage company) as of December 31, 2002
and the related consolidated statements of operations, changes in stockholders'
equity and cash flows for the year then ended and for the period from the date
of incorporation of February 4, 2000 to December 31, 2002. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of Far East Energy Corporation and
Subsidiary (formerly EZFoodstop.com) as of December 31, 2001, were audited by
other auditors whose report dated January 11, 2002, on those statements included
an explanatory paragraph that described the company's lack of an established
source of revenue raised substantial doubt about its ability to continue as a
going concern as discussed in Note 2 to the financial statements.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the 2002 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Far East
Energy Corporation and Subsidiary as of December 31, 2002, and the results of
its operations and its cash flows for the year then ended and for the period
from the date of incorporation of February 4, 2000 to December 31, 2002, in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has incurred net losses since its
inception and has no established source of revenues. Those conditions raise
substantial doubt about its ability to continue as a going concern. Management's
plans regarding those matters are described in Note 1. The consolidated
financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event the company
cannot continue in existence.

February 20, 2003

/s/ Payne, Falkner, Smith & Jones, P.C.
---------------------------------------
Payne, Falkner, Smith & Jones, P.C.
Dallas, Texas

                                       F-2

<PAGE>

                                DE VISSER & GRAY
                              CHARTERED ACCOUNTANTS

401-905 West Pender Street                                     December 11, 2003
Vancouver, B.C., Canada
V6C 1L6
Tel: (604) 687-5447
Fax: (604) 687-6737

AUDITOR'S REPORT

To the Stockholders of EZfoodstop.com

We have audited the balance sheets and statement of stockholders' equity of
EZfoodstop.com as at December 31, 2001 and 2000 and the statements of operations
and deficit and cash flows for the year ended December 31, 2001 and for the
period from the date of incorporation on February 4, 2000 to December 31, 2000.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing standards
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.

In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at December 31, 2001 and 2000
and the results of its operations and its cash flows for the year ended December
31, 2001 and for the period from the date of incorporation on February 4, 2000
to December 31, 2000 in accordance with generally accepted accounting principles
in the United States of America.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company has no established source of revenue and is dependent on
its ability to raise substantial amounts of equity funds. This raises
substantial doubt about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

/s/ DeVisser & Gray
-------------------
DeVisser & Gray
CHARTERED ACCOUNTANTS
Vancouver, British Columbia

                                       F-3

<PAGE>

                   FAR EAST ENERGY CORPORATION AND SUBSIDIARY
                            (formerly EZFoodstop.com)
                          (A Development Stage Company)

             Consolidated Balance Sheet December 31, 2002 and 2001

<TABLE>
<CAPTION>
                                                                                         2002                2001
                                                                                      -----------          --------
<S>                                                                                   <C>                  <C>
ASSETS
Current:
   Cash and cash equivalents                                                          $ 1,008,000          $ 27,000
   Prepaids and other current assets                                                        1,000                 -
                                                                                      -----------          --------
      Total current assets                                                              1,009,000            27,000
                                                                                      -----------          --------

Property and equipment, net                                                               101,000                 -

Intangible asset                                                                          175,000                 -

Investment in joint venture                                                                22,000                 -

Other                                                                                     143,000                 -
                                                                                      -----------          --------
                                                                                      $ 1,450,000          $ 27,000
                                                                                      ===========          ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Accounts payable                                                                   $   253,000          $      -
   Other liabilities                                                                      250,000                 -
                                                                                      -----------          --------
      Total current liabilities                                                           503,000                 -
                                                                                      -----------          --------

Commitments and contingencies                                                                   -                 -

Stockholders' equity:
   Common stock, $0.001 par value, 100,000,000 shares authorized,
      47,350,500 and 40,500,000 issued and outstanding at
      December 31, 2002 and 2001, respectively                                             45,000            40,000
   Additional paid in capital                                                           3,060,000            13,000
   Deficit accumulated during the development stage                                    (2,156,000)          (26,000)
   Accumulated other comprehensive loss                                                    (2,000)                -
                                                                                      -----------          --------
      Total stockholders' equity                                                          947,000            27,000
                                                                                      -----------          --------
                                                                                      $ 1,450,000          $ 27,000
                                                                                      ===========          ========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       F-4

<PAGE>

                   FAR EAST ENERGY CORPORATION AND SUBSIDIARY
                            (formerly EZFoodstop.com)
                          (A Development Stage Company)

                      Consolidated Statement of Operations

                 For the Years Ended December 31, 2002 and 2001

<TABLE>
<CAPTION>
                                                                       Cumulative
                                                                         During
                                                                      Development
                                                                         Stage             2002               2001
                                                                      -----------      ------------         --------
<S>                                                                   <C>              <C>                  <C>
Revenues:
   Interest income                                                    $    13,000      $    13,000          $      -
   Foreign currency exchange gain                                           1,000            1,000                 -
                                                                      -----------      -----------          --------
      Total revenues                                                       14,000           14,000                 -
                                                                      -----------      -----------          --------

Expenses:
   Geologic and engineering services                                      380,000          380,000                 -
   Other consulting and professional services                             296,000          296,000                 -
   Compensation                                                           596,000          596,000                 -
   Travel                                                                 575,000          575,000                 -
   Legal and accounting                                                    71,000           66,000             3,000
   General and administrative                                             252,000          231,000            12,000
                                                                      -----------      -----------          --------

      Total expenses                                                    2,170,000        2,144,000            15,000
                                                                      -----------      -----------          --------

   Loss before income taxes                                            (2,156,000)      (2,130,000)          (15,000)

   Income taxes                                                                 -                -                 -
                                                                      -----------      -----------          --------

   Net loss                                                            (2,156,000)      (2,130,000)          (15,000)

   Deficit - beginning of period                                                -          (26,000)          (11,000)
                                                                      -----------      -----------          --------

   Accumulated deficit - end of period                                $(2,156,000)     $(2,156,000)         $(26,000)
                                                                      ===========      ===========          ========

   Earnings per share - Basic                                                          $     (0.05)         $  (0.00)
                                                                                       ===========          ========

   Earnings per share - Diluted                                                        $     (0.05)         $  (0.00)
                                                                                       ===========          ========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       F-5

<PAGE>

                  FAR EAST ENERGY CORPORATION AND SUBSIDIARY
                             (formerly EZFoodstop.com)
                           (A Development Stage Company)
                   Consolidated Statement of Stockholders' Equity For the years
                ended December 31, 2002, 2001 and 2000

<TABLE>
<CAPTION>
        <S>                                   <C>          <C>           <C>       <C>            <C>          <C>          <C>

                                                    $.001 Par Value              Deficit
                                                     Common Stock               Accumulated   Accumulated
                                                  ------------------- Additional During the      Other                     Total
                                           Date of   Number of  Par   Paid-in  Development  Comprehensive Comprehensive Stockholders
                                         Transaction  Shares   Value  Capital    Stage          Loss         Loss         Equity
                                        --------------------------------------------------------------------------------------------

Shares issued                          4/00 - 8/00 40,500,00 $  40,000 $  13,000 $      -      $      -                  $  53,000
Net loss                                                   -         -         -  (11,000)            -    $(11,000)       (11,000)
                                                  ---------- --------- --------- ----------- ------------ ===========   -----------
Balance December 31, 2000                         40,500,000    40,000    13,000  (11,000)            -           -         42,000
Net loss                                                   -        -          -  (15,000)            -    $(15,000)       (15,000)
                                                  ---------- --------- --------- ----------- ------------ ============   -----------
Balance December 31, 2001                         40,500,000    40,000    13,000  (26,000)            -           -         27,000
Sale of stock for cash                1/24 -4/1/02 5,250,500     5,000 3,047,000        -             -           -      3,052,000
Stock issued in connection
with acquisition in process           12/30/2002   1,600,000     2,000 6,718,000        -             -           -      6,720,000
Stock issued subject to
acquisition completion                            (1,600,000)   (2,000)(6,718,000)      -             -           -     (6,720,000)

Comprehensive loss:
  Net loss                                                 -        -          - (2,130,000)              $(2,130,000)  (2,130,000)
    Other comprehensive loss, net of tax:
    Foreign currency translation adjustment                -        -          -          -       (2,000)      (2,000)      (2,000)
                                                 ------------ --------- -------- ----------- ------------- ------------ ------------
      Total comprehensive loss                                                                            $(2,132,000)
                                                                                                         =============
Balance December 31, 2002                          45,750,500  $45,000 $3,060,000 $(2,156,000)   $(2,000)                  $947,000
                                                ============= ======== ========= ============ ============ =============  ==========

           See accompanying notes to consolidated financial statements
</TABLE>

                                       F-6

<PAGE>

                   FAR EAST ENERGY CORPORATION AND SUBSIDIARY
                            (formerly EZFoodstop.com)
                          (A Development Stage Company)

                      Consolidated Statement of Cash Flows

                 For the Years Ended December 31, 2002 and 2001

<TABLE>
<CAPTION>
                                                                    Cumulative
                                                                      During
                                                                   Development
                                                                      Stage             2002                 2001
                                                                   -----------      ------------          ---------
<S>                                                               <C>               <C>                   <C>
Cash flows from operating activities:
   Net loss                                                       $ (2,156,000)     $ (2,130,000)         $ (15,000)
   Adjustments to reconcile net loss to cash
   used in operations:
      Depreciation                                                       7,000             7,000                  -
      Increase in prepaid expense                                       (1,000)           (1,000)                 -
      Increase (decrease) in accounts payable                          253,000           253,000             (1,000)
                                                                  ------------      ------------          ---------

         Net cash used in operations                                (1,897,000)       (1,871,000)           (16,000)
                                                                  ------------      ------------          ---------

Cash flows from investing activities:
   Acquisitions of intangibles                                         (90,000)          (90,000)                 -
   Investments in property and equipment                              (108,000)         (108,000)                 -
                                                                  ------------      ------------          ---------

      Net cash used in investing activities                           (198,000)         (198,000)                 -
                                                                  ------------      ------------          ---------

Cash flows from financing activities:
   Proceeds from the sale of common stock                            3,105,000         3,052,000                  -
                                                                  ------------      ------------          ---------

Effect of exchange rate changes on cash                                 (2,000)           (2,000)                 -
                                                                  ------------      ------------          ---------

Increase (decrease) in cash and cash equivalents                     1,008,000           981,000            (16,000)

Cash and cash equivalents - beginning of period                              -            27,000             43,000
                                                                  ------------      ------------          ---------

Cash and cash equivalents - end of period                         $  1,008,000      $  1,008,000          $  27,000
                                                                  ============      ============          =========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       F-7

<PAGE>

                   FAR EAST ENERGY CORPORATION AND SUBSIDIARY
                            (formerly EZFoodstop.com)
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The financial statements include the accounts of Far East and its wholly owned
subsidiary, Far East (BVI), Inc. (Far East BVI) and its Chinese joint venture
entity, Guihzou Far East Panjiang Chemical Co. Ltd. (GFEPC). Far East is
organized under the laws of the State of Nevada. Far East BVI is organized under
the laws of the British Virgin Islands. GFEPC is a Chinese joint venture. All
significant intercompany balances and transactions have been eliminated in
consolidation.

The following is a summary of the significant accounting policies used by Far
East Energy Corporation and Subsidiary (together referred to as the Company) in
the preparation of its financial statements. These accounting policies conform
to generally accepted accounting principles and practices generally followed
within the mining and extraction industries. A description of the more
significant of these policies follows.

BUSINESS

The Company was incorporated as Egoonline.com in the State of Nevada, United
States of America on February 4, 2000 under the Nevada Revised Statutes, Chapter
78, Private Companies, and changed its name to EZfoodstop.com on April 26, 2000.
EZFoodstop.com changed its name to Far East Energy Corporation on January 10,
2002.

Our Company is in the development stage. In 2002, our activities were limited to
capital formation, acquiring mineral lease interests and planning for the
development of properties in China pursuant to our production sharing contracts,
which give us rights to explore for, develop, produce and sell oil and gas or
coalbed methane ("CBM").

The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles, which contemplates
continuation of the Company as a going concern. The Company has incurred net
losses since its inception and has not established a source of revenue. In view
of these matters, realization of a major portion of the assets in the
accompanying consolidated balance sheet is dependent upon continued operations
of the Company, which in turn is dependent upon the Company's ability to meet
its financing requirements, and the success of its future operations. . These
factors raise substantial doubt about the Company's ability to continue as a
going concern. The accompanying consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

                                       F-8
<PAGE>

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents.

PROPERTY AND EQUIPMENT

The Company follows the successful efforts method of accounting. Under this
method, the Company capitalizes all costs related to property acquisitions and
successful exploratory wells, all development costs and the costs of support
equipment and facilities. Certain costs of exploratory wells are capitalized
pending determination that proved reserves have been found. All costs related to
unsuccessful exploratory wells are expensed when such wells are determined to be
non-productive; other exploration costs, including geological and geophysical
costs, are expensed as incurred. The Company recognizes gain or losses on the
sale of properties on a field basis.

Unproved leasehold costs are capitalized and reviewed periodically for
impairment on a property-by- property basis, considering factors such as
drilling and exploitation plans and lease terms. Costs related to impaired
prospects are charged to expense. An impairment expense could result if oil and
gas prices decline in the future or if downward reserves revisions are recorded,
as it may not be economic to develop some of these unproved properties.

Costs of development dry holes and proved leaseholds are amortized on the
unit-of-production method based on proved reserves on a field basis. The
depreciation of capitalized production equipment and drilling costs is based on
the unit-of-production method using proved developed reserves on a field basis.

The cost of unproved properties not being amortized is assessed quarterly to
determine whether such properties have been impaired. In determining whether
such costs should be impaired, we evaluate current drilling results, lease
expiration dates, current oil and gas industry conditions, international
economic conditions, capital availability, foreign currency exchange rates,
political stability in the countries in which we have an investment, and
available geological and geophysical information. Any impairment assessed is
added to the cost of proved properties being amortized, if any. To the extent
costs accumulate in countries where there are no proved reserves, any costs
determined by management to be impaired are charged to expense.

INCOME TAXES

Deferred tax assets and liabilities are reflected at currently enacted income
tax rates applicable to the period in which the deferred tax assets and
liabilities are expected to be realized or settled. As changes in tax laws or
rates are enacted, deferred tax assets and liabilities are adjusted through the
provision for income taxes. Valuation allowances are established when necessary
to reduce deferred tax assets to the amount expected to be realized.

ENVIRONMENTAL MATTERS

Environmental costs are expensed or capitalized depending on their future
economic benefit. Costs that relate to an existing condition caused by past
operations with no future economic benefit are expensed. Liabilities for future
expenditures of a non-capital nature are recorded when future environmental
expenditures and/or remediation are deemed probable and the costs can be
reasonably estimated. Costs of future expenditures for environmental remediation
obligations are not discounted to their present value.

NET LOSS PER SHARE

The Company applies SFAS No. 128, "Earnings Per Share" for the calculation of
"Basic" and "Diluted" earnings per share. Basic earnings per share includes no
dilution and is computed by dividing income available to common stockholders by
the weighted average number of common shares outstanding for the period. Diluted
earnings per share reflects the potential dilution of securities that could
share in the earnings of the Company.

                                      F-9

<PAGE>

Common stock equivalents are not included in the diluted earnings per share
calculation when their effect is antidilutive.

STOCK OPTIONS

The Company applies APB Opinion 25, "Accounting for Stock Issued to Employees,"
and related interpretations in accounting for its stock option plan and has
adopted the disclosure-only provisions of Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS No. 123) as
amended by Statement of Financial Accounting Standards "Accounting for
Stock-Based Compensation--Transition and Disclosure--an amendment of FASB
Statement No. 123" (SFAS No.148). Accordingly, no compensation cost for stock
options granted has been recognized, as all options granted under these plans
had an exercise price equal to or greater than the market value of the
underlying common stock on the day of grant.

Had compensation cost for these plans been determined consistent with the
provisions of SFAS No. 123, the Company's stock-based compensation expense, net
loss and loss per share would have been adjusted to the following pro forma
amounts:

<TABLE>
<CAPTION>
                                                                                      2002
                                                                             ----------------------
<S>                                                                          <C>
Net loss:
As reported                                                                  $          (2,130,000)
Deducts: Total stock-based employee compensation expense determined under
intrinsic value method for all awards, net of tax                                         (252,000)
                                                                             ---------------------
Pro forma net loss                                                           $          (2,382,000)
                                                                             =====================
Basic loss per share:
                 As reported                                                 $                0.05
                 Pro forma                                                                    0.05
Diluted loss per share:
                 As reported                                                 $                0.05
                 Pro forma                                                                    0.05

</TABLE>

The Company estimated the fair value of each stock award at the grant date by
using the Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in the year ended December 31, 2002: dividend yield
at 0%; expected volatility of approximately 50%; risk-free interest rate of 1.4%
and expected lives of one to 4 years for the options.

There was no stock option plan prior to 2002.

FOREIGN CURRENCY TRANSLATION

Foreign currency transactions and financial statements are translated in
accordance with Statement of Financial Accounting Standards No. 52, Foreign
Currency Translation. The functional currency for the Company's foreign
operations is the applicable foreign currency. The translation of the applicable
foreign currency into U.S. dollars is performed for balance sheet accounts using
current exchange rates in effect at the balance sheet date and for revenue and
expense accounts using a weighted average exchange rate during the period. The
gains or losses resulting from such translation are included in the consolidated
statements of stockholders' equity and comprehensive income.

Foreign currency translation resulted in an aggregate exchange loss of $2,000 in
2002. There were no foreign currency transactions in 2001.

                                      F-10

<PAGE>

FAIR VALUES OF FINANCIAL INSTRUMENTS

The following table presents the carrying amounts and estimated fair values of
the Company's financial instruments at December 31, 2002 and 2001.

<TABLE>
<CAPTION>
                                2002                            2001
                      Carrying        Estimated       Carrying        Estimated
                       Amount        Fair Value        Amount        Fair Value
                      --------       ----------       --------       ----------
                                           (In Thousands)
<S>                   <C>            <C>              <C>            <C>
Cash and cash
equivalents           $ 1,008         $ 1,008          $   27         $      27
Other liabilities       3,550           3,336               -                 -
</TABLE>

The following methods and assumptions were used to estimate the fair value of
the financial instruments summarized in the table above. The carrying values of
accounts receivable, other assets, accounts payable and accrued expenses
included in the accompanying consolidated balance sheets approximated fair
market value at December 31, 2002 and 2001.

Cash and cash equivalents

The carrying amounts approximate fair value due to the short-term maturity of
the instruments.

Other Liabilities and Commitments

The fair value of other liabilities and commitments is the present value of
amounts to be paid determined at appropriate current interest rates.

RECLASSIFICATION

Certain amounts previously reported have been reclassified to conform to the
current format.

RECENT ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No.
141, "Business Combinations." SFAS No. 141 is intended to improve the
transparency of the accounting and reporting for business combinations by
requiring that all business combinations be accounted for under a single
method-the purchase method. This statement is effective for all business
combinations initiated after June 30, 2001.

In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets." This statement applies to intangibles and goodwill acquired after June
30, 2001, as well as goodwill and intangibles previously acquired. Under this
statement, goodwill as well as other intangibles determined to have an infinite
life will no longer be amortized; however, these assets will be reviewed for
impairment on a periodic basis. This statement is effective for the Company for
the first quarter in the fiscal year ending December 31, 2002. Management does
not believe that the adoption of this statement will have a material effect on
the Company's financial statements.

In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." SFAS No. 143 requires the fair value of a liability for an asset
retirement obligation to be recognized in the period in which it is incurred if
a reasonable estimate of fair value can be made. The associated asset retirement
costs are capitalized as part of the carrying amount of the long-lived asset.
SFAS No. 143 is effective for fiscal years beginning after June 15, 2002.
Management does not believe that the adoption of this statement will have a
significant impact on the company's financial statements.

                                      F-11

<PAGE>

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." SFAS No. 144 requires that long-lived assets be
measured at the lower of carrying amount or fair value less cost to sell,
whether reported in continuing operations or in discontinued operations. SFAS
No. 144 is effective for financial statements issued for fiscal years beginning
after December 15, 2001. Management does not believe that the adoption of this
statement will have a significant impact on the company's financial statements.

2.       GOING CONCERN

The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and the liquidation of liabilities in the normal course of
business. The Company currently has no source of revenue

Management intends to continue financing efforts to support the current and
proposed business operations in China and Montana. The ability of the Company to
continue as a going concern is dependent upon its ability to raise substantial
funds for use in development activities and upon the success of the Company's
planned exploration and development activities. There can be no guarantee of
future fundraising success. The success of exploratory drilling is uncertain.
However, management believes that the Company will continue to be successful in
raising the funds necessary to explore for gas and, assuming success in those
exploratory efforts, to raise the funds necessary for production and
development.

Management believes that the Company will be able to raise funds sufficient to
assure satisfaction of its operating capital needs/plans and financial
obligations through December 31, 2004. These funds are anticipated to be raised
through private offerings to accredited investors throughout 2003 and early
2004.

Because the company has acquired an undeveloped natural resource that will
require substantial exploration and development, management does not expect to
generate meaningful revenues until at least late 2004. Expenses for the second
half of 2004 will have to be financed through cash flow, which may not yet be
available if production and sales of coalbed methane gas are not significant, or
through future financings of equity and/or debt.

3.       STATEMENT OF CASH FLOWS

The Company uses the indirect method to present cash flows from operating
activities. Other supplemental cash flow information for the years ended
December 31, 2002 and 2001 is presented as follows:

<TABLE>
<CAPTION>
                                                            2002            2001
                                                            ----            ----
<S>                                                       <C>            <C>
Cash transactions:
           Cash paid for interest                         $       -      $        -
                                                          =========      ==========
           Cash paid for income taxes                     $       -      $        -
                                                          =========      ==========
Noncash transactions:
           Acquisition of contact rights                  $ 150,000      $        -
                                                          =========      ==========
</TABLE>

                                      F-12

<PAGE>

4.       PROPERTY AND EQUIPMENT

Property and equipment includes the following:

<TABLE>
<CAPTION>
                                                            2002           2001
                                                            ----           ----
<S>                                                       <C>            <C>
Furniture and equipment                                   $ 108,000      $      -
Accumulated depreciation                                     (7,000)            -

                                                          $ 101,000      $      -
                                                          =========      ========
</TABLE>

5.       INTANGIBLE ASSETS

Intangible assets consist of mineral exploration rights acquired during 2002
pursuant to a Production Sharing Contract with the China United Coal Bed Methane
Corporation (CUCBM) and are being amortized over three years. Assigned costs
amounted to approximately $175,000. There was no amortization expense in 2002.
Estimated amortization expense for each of the ensuing years through December
31, 2005, is $58,000. On January 25, 2002, the Company entered into a Production
Sharing Contract with the China United Coal Bed Methane Corporation (CUCBM),
which has exclusive legal authority over all coal bed methane gas in the
People's Republic of China (PRC). Pursuant to the Production Sharing Contract,
the Company received the authority from CUCBM to jointly explore, develop,
produce and sell coal bed methane gas in and from a total area of 1,072
unevaluated square kilometers in the Enhong and Laochang areas of Yunnan
Province, PRC. The Production Sharing Contract was subject to formal
ratification by PRC's Ministry of Foreign Trade and Economic Cooperation
(MOFTEC). On December 30, 2002, MOFTEC ratified this Production Sharing
Contract. The contract requires the Company to pay $150,000 to CUCBM upon
ratification. The Company has the right to earn a minimum of 60% interest in the
joint venture, with CUCBM retaining the remaining 40%. In the event CUCBM elects
to participate at a level less than 40%, their interest will be reduced
proportionately, increasing the Company's participating interest.

As a result of MOFTEC's ratification and approval of the Production Sharing
Contract concerning the Enhong and Laochang areas, the Company intends to
initially drill five (5) exploration wells and eight (8) more exploration wells
at a later stage.

The Company has another Production Sharing Contract of the same date with CUCBM
in the Zhaotong area of Yunnan Province which has not yet been ratified.

6.       INVESTMENT IN JOINT VENTURE

On June 5, 2002, the Company executed a Sino-Foreign Joint Venture Contract (the
Contract) with Panjiang Coal-Electricity (Group) Co. Ltd. (Panjiang) to
establish a joint venture limited liability company (Joint Venture) in the PRC
to extract and use coalmine methane gas from six (6) operating Panjiang
coalmines which cover an area of 120 square kilometers. This contract was
entered into by the Company through its wholly owned subsidiary, Far East BVI.
The Company is developing drilling plans to prove and exploit the resources in
these contract areas in the Guizhou Province. In consideration for this right to
capture this coalmine methane gas, the Company will pay a total of $3,300,000 to
Panjiang over the next three (3) years with $300,000 being paid at the beginning
of the thirteenth (13th) month, $600,000 being paid at the beginning of the
nineteenth (19th) month, $1,100,000 being paid at the beginning of the
twenty-seventh (27th) month, and $1,300,000 being paid at the beginning of the
thirty third (33rd) month. These obligations are recorded in the consolidated
financial statements as of December 31, 2002. Additionally, the Company has
agreed to provide Panjiang with 16,000,000 cubic meters per year of untreated,
minimum 30% concentration, coalmine methane gas (equivalent to 5,500,000 cubic
meters of pure methane) for use in Panjiang employee households.

The Company has also committed to provide all of the necessary funds for the
extraction and use of the coalmine methane gas operations over the twenty (20)
year term of the Contract.

However, as these amounts are not yet determinable, there is no provision in the
financials as of December 31, 2002.

                                      F-13

<PAGE>

Panjiang will, in addition to allowing full and complete access to the coalmine
methane gas, do the following:

         Apply to the relevant authorities for the establishment of the Joint
Venture and obtain necessary approvals;

        -  Assist in obtaining a business license for the Joint Venture;

        - Assist in getting land use rights, water use rights, electricity
supply and other necessities for field development, well drilling, installation,
upgrading, purification of coalmine methane gas and production of chemical
products;

        - Provide all the land use rights for the household use methane gas
pipelines;

        - Assist the foreign employees in getting relevant visas;

        - Assist in purchasing equipment, materials, vehicles, communication
equipment; and

        - Assist in the design and construction of the project, and in
recruiting managers, technicians, and workers and other required employees.

The Company may withdraw from the project at any time by providing ninety (90)
days written notice to Panjiang. During the first seven (7) year period, the
Company will receive one hundred percent (100%) of the profits derived from its
sale of coalmine methane gas and its products. After the expiration of the first
seven (7) year period, the Company will pay Panjiang the following percentage of
net profits derived from the sale of coalmine methane gas and its products:

      Year Eight                                     10%
      Year Nine through Sixteen                      20%
      Year Seventeen through Twenty                  50%

Subsequent to December 31, 2002 the Company notified Panjiang of its intention
to withdraw from the project which effectively eliminates all assets and
obligations associated with the project. If the Company had withdrawn from the
project in 2002 the total assets, stockholders' equity and net income in the
accompanying consolidated financial statements would have been decreased by
approximately $22,000.

7.       OTHER ASSETS

Other assets consist of acquisition costs on Newark Valley Oil and Gas. This
included the initial $100,000 paid at closing and initial acquisition costs of
approximately $43,000. These costs are classified as other assets at December,
31, 2002 pending the outcome of the contingency related to the merger agreement.
Effective December 31, 2002, the Company entered into an agreement to acquire a
significant amount of assets when its wholly owned subsidiary, Far East Montana,
Inc., executed a Plan of Merger (Agreement) with Newark Valley Oil & Gas, Inc, a
Nevada corporation (Newark) wholly owned by North American Oil and Gas, Inc.,
(North American). Newark survived the merger and became a wholly owned
subsidiary of the Company. Pursuant to the Agreement, in exchange for one
hundred percent (100%) of the outstanding equity of Newark, the Company has
issued: 1,600,000 restricted common shares and agreed to pay $600,000 in cash
($100,000 paid at closing, $200,000 to be paid five (5) months after closing and
$300,000 to be paid twelve (12) months after closing), and assumed liabilities
with a fair value of $364,000.

As a result of the agreement, the Company will acquire certain undeveloped oil,
gas and mineral rights and interests in approximately 147,535.10 net acres
located in the eastern portion of the state of Montana. Of the total net acres,
approximately 134,530.16 acres constitute federal leases, approximately 5,141,80
acres constitute state of Montana leases, and approximately 7,863.14 acres
constitute freehold leases. This acquisition will be intended to constitute a
tax- free plan of reorganization pursuant to IRC Section 368(a)(1)(A). This
acquisition will be accounted for as a purchase. As such, acquired assets and
liabilities will be recorded at their fair value at the date of acquisition.

The agreement contains a contingency that the Company must use its best efforts
to secure additional financing in the amount of $2,000,000 within 120 days from
the date of closing (December 31, 2002). Any amounts of financing received by
the Company since the date of the execution of the Letter of Intent on November
9, 2002

                                      F-14

<PAGE>

shall be deducted from the total $2,000,000 financing requirement. In
the event such financing is not secured within 120 days of Closing, the Company
shall be in default of this Agreement and the transaction shall be subject to
rescission. In the event of rescission, the Company will transfer all of the
outstanding equity interests in Newark to North American. North American will
return to the Company the 1,600,000 restricted common shares of the Company.
However, North American will retain any monies tendered pursuant to the
Agreement.

8.       INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences
between the recorded amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities as of December 31, 2002 and
2001 are as follows:

<TABLE>
<CAPTION>
                                                     2002                       2001
                                               ---------------           -----------------
<S>                                            <C>                       <C>
Deferred tax assets:
   Net operating loss                          $       762,000           $           4,000

Deferred tax liabilities:
   Bank premises and equipment                           1,000                           -
                                               ---------------           -----------------
         Net deferred tax asset                        761,000                       4,000
         Less valuation allowance                     (761,000)                     (4,000)
                                               ---------------           -----------------
                                               $             -           $               -
                                               ===============           =================
</TABLE>

At December 31, 2002, the Company had a net operating loss carryforward for
federal income tax purposes of approximately $2,240,000, which will expire
beginning in 2016. At December 31, 2002 and 2001, management believed that the
above indicated valuation allowance was necessary in order to comply with the
provisions of Statement of Financial Accounting Standard No. 109, as discussed
in note 1.

Income taxes for financial reporting purposes differed from the amounts computed
by applying the statutory federal income tax rates due to the recording of the
valuation allowance. The net change in the valuation allowance for the year
ended December 31, 2002 and 2001 was $757,000 and $4,000, respectively.

9.       COMMITMENTS AND CONTINGENCIES

The Company is involved in legal actions arising from normal business
activities. Management believes that these actions are without merit or that the
ultimate liability, if any, resulting from them will not materially affect the
financial position or results of operations of the Company. The Company does not
anticipate any material losses as a result of commitments and contingent
liabilities.

Rent expense for the year ended December 31, 2002 was approximately $49,000.
There was no rent expense in 2001. There are no noncancelable leases with
remaining terms in excess of one year.

10.      RELATED PARTY TRANSACTIONS

In the ordinary course of business, the Company has had transactions, including
borrowings, with its employees, officers, directors and their affiliates. In the
opinion of management, such transactions are on the

                                      F-15

<PAGE>

same terms as for comparable transactions with unaffiliated persons. The Company
has no plans to engage in future related party transactions.

The Company leases its Houston office from an entity owned in part by an officer
and stockholder of the Company. The lease is classified as an operating lease
and provides for minimum monthly rentals of $3,000 through May 2003.

11.      STOCKHOLDERS' EQUITY

Earnings per Share The following table sets forth the computation of basic and
diluted loss per share:

<TABLE>
<CAPTION>
                                                        2002                     2001
                                                    -----------                --------
                                                    (In Thousands, Except Per Share Data)
<S>                                                 <C>                        <C>
Numerator:
   Net loss from continuing operations              $     2,130                $     15
                                                    -----------                --------
Numerator for basic
    loss per share - loss
    available to common stockholders                $     2,130                $     15
                                                    -----------                --------
Numerator for dilutive loss per
   share - loss available to common
   stockholders after assumed conversions           $     2,130                $     15
                                                    -----------                --------

Denominator:
   Denominator for basic loss per
   share - weighted average shares                       44,810                  40,500

Effect of dilutive securities:
   Stock options                                            657                       -
                                                    -----------                --------
Dilutive potential common shares                            657                       -
                                                    -----------                --------

Denominator for diluted
   loss per  share--adjusted weighted
   average shares and assumed conversion                 45,467                  40,500
                                                    -----------                --------

Basic loss per common share                         $      0.05                $      -
                                                    ===========                ========

Diluted loss per common share                       $      0.05                $      -
                                                    ===========                ========
</TABLE>

For the years ended December 31, 2002 all common stock equivalents were included
in the computation of diluted earnings per share. There were no common stock
equivalents in 2001.

                                      F-16

<PAGE>

Stock Split

On January 1, 2002, the Board of Directors authorized an 18 for 1 stock split of
the Company's $0.001 par value common stock. As a result of the split,
38,250,000 additional shares were issued, and additional paid-in capital was
reduced by $38,000. All references in the accompanying consolidated financial
statements to the number of common shares and per-share amounts since inception
have been restated to reflect the stock split.

Private Placement Offerings of Common Stock

The Company engaged in an accredited investors offering (Offering) of shares of
its common stock, $0.001 par value (Common Stock), at sixty-five cents ($0.65)
per share. The offering was made pursuant to exemption from registration under
Section 4(2) of the Securities Act of 1933.

Beginning January 24, 2002 and concluding on March 19, 2002, pursuant to Rule
506 of the Securities Act of 1933, Common Stock shares of 5,250,500 were sold to
a group of 22 accredited foreign investors and two accredited United States
individuals for a total offering price of $3,412,825. A commission of 11% was
paid to the broker and escrow agent utilized to affect the European sales. The
proceeds from the US investors were not subject to a commission.

12.      STOCK OPTION PLAN

On January 29, 2002, the Board of Directors adopted, and the Company's
stockholders subsequently approved, a non-qualified Stock Option Plan (the
Plan), whereby certain employees have been granted incentive options to purchase
up to 3,990,000 shares of the common stock of the Company. The vesting schedule
is 20% per year beginning July 29, 2002 and continuing at 20% per year on each
January 29. The options expire January 29, 2009.

Under the terms of the Company's Stock Option Agreement, options were granted to
key employees at not less than the market price of the Company's common stock on
the date of grant. The purpose of the options is to reward directors and key
personnel for joining the Company and to give them an incentive to remain with
the Company.

As of December 31, 2002, the Company had granted 3,990,000 options under the
Plan.

There was no stock option plan prior to 2002.A summary of option transactions
during the year ended December 31, 2002 is as follows:

<TABLE>
<CAPTION>
                                                                   2002
                                                      --------------------------------
                                                       Shares Under     Option Price
                                                          Option          Per Share
                                                      --------------   ---------------
<S>                                                   <C>              <C>
Outstanding at beginning of year                                 -        $      -
Granted                                                  3,990,000            0.65
Exercised                                                        -               -
Forfeited                                                        -               -
                                                         ---------        --------
Outstanding at end of year                               3,990,000            0.65
                                                         =========        ========
Options exercisable                                        798,000
Weigted average per share
 fair value of options granted
 during the period                                      $     0.65
</TABLE>

A summary of options outstanding as of December 31, 2002 as follows:

<TABLE>
<CAPTION>
                                             Weighted
Exercise       Number of Options        Average Remaining        Number of Options
 Price            Outstanding            Contractual Life           Exercisable
--------       -----------------        -----------------        -----------------
<S>            <C>                      <C>                      <C>
 $0.65             3,990,000                6.08 years                798,000
</TABLE>

                                      F-17

<PAGE>

All the outstanding options are exercisable at various times in years 2003
through 2009. All non-qualified stock options were granted at or greater than
fair value on the date of grant. Generally, options granted under the Plan have
a seven-year term and provide for vesting over four years.

13.      SUBSEQUENT EVENT

On January 9, 2003, the Company sold 60,000 shares of its common stock at $2.50
per share to one (1) offshore accredited investor for total offering proceeds of
$150,000. After payment of a ten percent (10%) commission, or $15,000, to the
broker who introduced this offshore person to the Company, net proceeds were
$135,000. This sale was made pursuant to exemptions from registration under the
Securities Act of 1933 (the "Act"), including but not limited to Sections 3(b)
or 4(2). The broker had a previous business relationship with the investor.

                                      F-18

<PAGE>

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

         On May 10, 2002, the board of directors of the Company appointed Payne,
Falkner, Smith & Jones, P.C. as the Company's independent auditor for the fiscal
year ended December 31, 2002. This appointment represented a change in the
Company's auditor from De Visser & Gray. There was no disagreement with,
resignation by, or dismissal of De Visser & Gray. This change was prompted by
the move of the Company's principal executive office from Vancouver, B.C.,
Canada to Houston, Texas. De Visser & Gray's report on the Company's financial
statements for the past two (2) years did not contain an adverse opinion or
disclaimer of opinion, and had not been modified as to uncertainty, audit scope,
or accounting principles. There were no disagreements with De Visser & Gray on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure.

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT

Directors, Executive Officers and Control Persons

<TABLE>
<CAPTION>
         Name              Age                       Position(s) and Office(s)
<S>                        <C>      <C>
Michael McElwrath          52       Chief Executive Officer, President, Secretary and Treasurer
Tun Aye Sai                56       Director, Director of China Operations
Jawaharlal (Lal) Gondi     61       Director, Former Chief Executive Officer
Mark Schaftlein            45       Chief Financial Officer
Bill Jackson               58       Former President,  Former Chief Operating Officer and a Former Director
Ramesh Kalluri             45       Former Secretary, Former Treasurer and a Former Director
John Springsteen           33       Former VP and Former CFO
Chris Jackson              33       Former VP of Corporate Development
</TABLE>

         Michael McElwrath was appointed president, chief executive officer,
secretary and treasurer of the Company on October 13, 2003, and was elected as a
director of the Company on October 14, 2003. Mr. McElwrath served previously as
a member of the Board of Advisors. He served as Vice President and Director of
Business Development for TMP Worldwide, which owns "Monster.com" with revenues
in excess of $400 Million. He has previously held positions as Acting Assistant
Secretary of Energy-USA Department of Energy Director of the National Institute
for Petroleum and Energy Research and Deputy Assistant Secretary for policy for
the U.S. Department of Interior. In addition Mr. McElwrath has held a number of
Senior Executive positions related to oil, gas and coal exploration and
development. Mr. McElwrath holds a J.D. from the University of Texas School of
Law, as well as a B.A Honors Program.

         Tun Aye Sai was appointed the Director of China Operations and a
director of the Company on December 31, 2001. Mr. Sai has over 30 years of
international mining and exploration experience. He has extensive experience in
developing and managing mining projects in China and Southeast Asia. Mr. Sai has
served as a director and consultant for Golden Pacific Resources since May 1994.
He holds a Bachelor of Engineering degree in mining from Rangoon Institute of
Technology, Rangoon, Burma and a post graduate diploma in management and
administration from Institute of Economics, Rangoon, Burma.

         Jawaharlal (Lal) Gondi served as the Chief Executive Officer and
Chairman of the Company from December 31, 2001 to May 19, 2003, and continues to
serve as a director of the Company. Mr. Gondi is a geologist with an extensive
financial background. He has eleven years of diverse mineral exploration
experience and twenty-three years of corporate finance and investment knowledge
of capital markets. He has served as director, senior officer or principal of a
number of brokerage firms both in Canada & Europe. Mr. Gondi served as senior
executive director of Union Capital, UK, a brokerage firm, from March 1993 to
May 1997. He was self-employed from May 1997 to January 2001 trading public
securities. Mr. Gondi has served on the board of directors and as the president
of BPI Industries since January 2001, became its chairman in August

                                       17

<PAGE>

2001, and continued to serve in these positions until November 2001. He holds a
Masters of Science degree in applied geology from Andhra University, Waltair,
India and completed several advanced courses in geology & finance in North
America.

         Mark Schaftlein was appointed chief financial offer of the Company on
November 10, 2003. Mr. Schaftlein has been in the consulting and financial
services business for the past 20 years. Mr. Schaftlein is a Managing Director
at the financial consulting firm Ocean Avenue Advisors. He has been with Ocean
Avenue since 2000. He is a principal in Capital Consulting, Inc. a privately
held consulting firm. He served as Interim Chief Financial Officer at Speedcom
Wireless Corporation for the past 18 months. Mr. Schaftlein has provided
consulting and restructuring advice to clients in a variety of industries with
both public and private companies. Prior to that, he was in the financial
services business with a concentration in Mortgage Banking for 17 years, eight
of which where initially spent at Citigroup. He is a 1980 graduate of Western
Kentucky University with a degree in business Administration.

         Bill Jackson served as the President, Chief Operating Officer and a
director of the Company from December 31, 2001 to August 18, 2003, and as Chief
Executive Officer from May 19, 2003 through August 18, 2003, when he resigned
from all positions in order to pursue other business opportunities. In resigning
Mr. Jackson did not express any disagreement with the Company on any matter
relating to the Company's operations, policies or practices. Mr. Jackson has
over thirty years of experience in the Engineering and Construction industry. He
served as a vice president and the chief operating officer of the Shaw Group, an
engineering and construction company, from November 1998 to June 1999. From
February 2000 to present, Mr. Jackson has served as executive vice president and
chief financial officer for Quality Technologies, an inspection services
company. Prior to that, he also served as Vice President of Bechtel Corporation,
Senior Vice President of Bechtel Services Corporation, and managed the
Bechtel/Chevron Capital Projects Alliance, Worldwide Procurement and Contracts
(including over 1,400 technical personnel), and a Joint Venture Company with EDS
focused on Utility Plant Operations outsourcing. He was instrumental in the
development and formation of the Bechtel worldwide contracts management
organization. Mr. Jackson holds a Bachelor of Science degree from Texas A&M
University, Commerce, Texas.

         Ramesh Kalluri served as secretary, treasurer from December 31, 2001 to
May 19, 2003 when he resigned from both positions. In resigning Mr. Kalluri did
not express any disagreement with the Company on any matter relating to the
Company's operations, policies or practices. Mr. Kalluri served as a director of
the Company from December 31, 2001 to October 14, 2003. He has over eighteen
years experience in environmental regulations, engineering/design management,
construction, and start-ups. He was an engineer with Bechtel Corporation from
September 1991 to February 1998. He served as a vice president for GSG, an
engineering company, from March 1998 to December 1998. Mr. Kalluri has been
president of the Kalluri Group, an engineering company, since January 1999. He
has also held senior engineering positions with Bechtel Corporation, Turner,
Collie & Braden, Inc. and Jay Engineering. Mr. Kalluri holds a Bachelor of
Science degree in civil engineering from Andhra University, Waltair, India and a
Masters of Science in environmental engineering from McGill University.

         John Springsteen served as the Vice President and Chief Financial
Officer of the Company from December 31, 2001 to May 19, 2003, when he resigned
from both positions because of differences with Bill Jackson, who was then the
Company's CEO and president, regarding the leadership and direction of the
Company. Mr. Springsteen has over a decade of experience in international
business, management consulting, and environmental engineering. He was a senior
consultant for Ernst & Young from September 1996 to September 1998, a manager at
the Chicago Group from September 1998 to September 2000, and a managing
consultant at the Bridge Strategy Group from September 2000 to June 2001. From
October 2001 to present he has served as a vice president of Value Partners
Group. Mr. Springsteen holds a Bachelor of Science degree in civil and
environmental engineering from the Massachusetts Institute of Technology and a
Masters of Business Administration from the Kellogg Graduate School of
Management at Northwestern University.

         Chris Jackson served as Vice President of Corporate Development of the
Company from December 31, 2001 to April 22, 2003, when he was terminated in an
effort to reduce the Company's expenses. Mr. Jackson is

                                       18

<PAGE>

the son of Bill Jackson, the Company's former president. Chris Jackson has
experience in the areas of business development, marketing, project management,
and alliances and partnerships. He served as president of iCon Logistics, a
transportation services company, from July 1999 to January 2000. From February
2000 to May 2001, Mr. Jackson was an executive vice president in sales for
Quality Technologies. He served as a vice president for Infrastructure World,
Inc., an Internet company from June 2001 to January 2002. Prior to 1999, he
worked for Bechtel Corporation, Electronic Data Systems (EDS), and consulted to
companies like Phelps Dodge, British Borneo, and Kaiser Aluminum. Mr. Jackson
holds a Bachelor of Science degree in business administration and finance from
Texas A&M University, Commerce, Texas.

Compliance with Section 16(a) of the Exchange Act

         Based solely upon a review of forms 3, 4 and 5 furnished to the
Company, the Company is not aware of any person who at any time during the
fiscal year ended December 31, 2001, was a director, officer, or beneficial
owner of more than ten percent of the Common Stock of the Company, and who
failed to file, on a timely basis, reports required by Section 16(a) of the
Securities Exchange Act of 1934 during such fiscal year, except for Bill
Jackson, John Springsteen, Jawaharlal Gondi, Ramesh Kalluri, Tun Aye Sai and
Chris Jackson whose non-qualified options to purchase shares of Common Stock
vested and became exercisable on July 29, 2002 and January 29, 2003, both of
which were reported on late Form 4 filings.

ITEM 10. EXECUTIVE COMPENSATION

         No compensation in excess of $100,000 was awarded to, earned by, or
paid to any executive officer of the Company during the fiscal years 2002, 2001
and 2000. The following table provides summary information for the years 2002,
2001 and 2000 concerning cash and noncash compensation paid or accrued by the
Company to or on behalf of the Company's chief executive officer.

                           SUMMARY COMPENSATION TABLES

<TABLE>
<CAPTION>
                                                  Annual Compensation
                                  ---------------------------------------------------
     Name and                                                          Other Annual
Principal Position                 Year    Salary ($)    Bonus ($)   Compensation ($)
-------------------               ------   -----------------------   ----------------
<S>                               <C>      <C>           <C>         <C>
 Jawaharlal Gondi                  2002      60,000        - 0 -          5,343
  Chief Executive
      Officer
-------------------               ------   -------------------------------------------
    John Green,                    2001      - 0 -         - 0 -          - 0 -
     President
-------------------               ------   -------------------------------------------
    John Green,                    2000      - 0 -         - 0 -          - 0 -
     President
</TABLE>

                                       19

<PAGE>

<TABLE>
<CAPTION>
                                                       Long Term Compensation
                                     ----------------------------------------------------------
                                                  Awards                             Payouts
                                     ----------------------------------------------------------
                                     Restricted         Securities Underlying          LTIP           All Other
Name and Principal                     Stock                  Options/               Payouts        Compensation
     Position               Year     Award(s)($)               SARs(#)                  ($)              ($)
--------------------------------     -----------        ---------------------        -------        ------------
<S>                         <C>      <C>                <C>                          <C>            <C>
Jawaharlal Gondi,           2002        - 0 -                   - 0 -                 - 0 -             - 0 -
 Chief Executive
     Officer
--------------------------------     -----------        ---------------------        -------        ------------
   John Green,              2001        - 0 -                   - 0 -                 - 0 -             - 0 -
    President
--------------------------------     -----------        ---------------------        -------        ------------
   John Green,              2000        - 0 -                   - 0 -                 - 0 -             - 0 -
    President
</TABLE>

                      Option/SAR Grants in Last Fiscal Year
                               (Individual Grants)

<TABLE>
<CAPTION>

                           Number of      Percent of Total
                          Securities        Options/SARs
                          Underlying         Granted to         Exercise of
                         Options/SARs       Employees In        Base Price
       Name                  (1)             Fiscal Year          ($/Sh)          Expiration Date
<S>                      <C>              <C>                   <C>               <C>
John Springsteen            200,000             5.0%            $0.65/Share       January 29, 2009
----------------          ---------            ----             -----------       ----------------
Jawaharlal Gondi          1,000,000            25.1%            $0.65/Share       January 29, 2009
----------------          ---------            ----             -----------       ----------------
  Tun Aye Sai               300,000             7.5%            $0.65/Share       January 29, 2009
----------------          ---------            ----             -----------       ----------------
 Mike McElwrath             100,000             2.5%            $0.65/Share       January 29, 2009
----------------          ---------            ----             -----------       ----------------
   Larry Izzo                30,000             0.8%            $0.65/Share       January 29, 2009
----------------          ---------            ----             -----------       ----------------
   Ben Malek                 30,000             0.8%            $0.65/Share       January 29, 2009
----------------          ---------            ----             -----------       ----------------
   Joe Cooper               600,000            15.0%            $0.65/Share       January 29, 2009
----------------          ---------            ----             -----------       ----------------
  Don Gunther               280,000             7.0%            $0.65/Share       January 29, 2009
----------------          ---------            ----             -----------       ----------------
Bill Jackson (2)          1,000,000            25.1%            $0.65/Share       January 29, 2009
----------------          ---------            ----             -----------       ----------------
Chris Jackson (2)           300,000             7.5%            $0.65/Share       January 29, 2009
----------------          ---------            ----             -----------       ----------------
Ramesh Kalluri (2)          150,000             3.8%            $0.65/Share       January 29, 2009
----------------          ---------            ----             -----------       ----------------
</TABLE>

(1) These options to purchase shares of the Company's Common Stock were granted
to these individuals on January 29, 2002 to reward them with stock options and
to motivate these persons. These options to purchase shares vest in five (5)
equal allotments with twenty percent (20%) vesting and being exercisable on July
29, 2002, and the remaining eighty percent (80%) vesting and being exercisable
in four (4) equal annual increments beginning on January 29, 2003 and continuing
until January 29, 2006. All of these options are exercisable until and expire on
January 29, 2009. Because these options and the shares underlying these options
are being provided as motivation to the individuals only, both the option and
the underlying shares may not be sold, transferred, assigned, pledged for a
loan, margined, hypothecated or exchanged, except pursuant to the laws of
descent, for a period of two (2) years from the date of grant.

(2) These individuals are no longer employed by the Company and, therefore,
their options no longer vest. Accordingly, Bill Jackson owns 400,000 vested
shares, and his option for the remaining 600,000 shares has expired. Chris
Jackson owns 120,000 vested shares, and his option for the remaining 180,000
shares has expired. Ramesh Kalluri owns 60,000 vested shares, and his option for
the remaining 90,000 shares has expired.

                                       20

<PAGE>

<TABLE>
<CAPTION>
                                                                                                  Number of securities
                             Number of securities to be                                          remaining available for
                              issued upon exercise of     Weighted-average exercise           future issuance under equity
                                outstanding options,        price of outstanding              compensation plans (excluding
       Plan Category           warrants and rights      options, warrants and rights      securities reflected in column (a))
--------------------------  --------------------------- -----------------------------     -----------------------------------
<S>                         <C>                         <C>                               <C>
                                      (a)                           (b)                                      (c)
-----------------------------------------------------------------------------------------------------------------------------
Equity compensation plans                 0                            n/a                                 0
   approved by security
         holders
-----------------------------------------------------------------------------------------------------------------------------
Equity compensation plans         3,990,000                        $  0.65                                 0
 not approved by security
         holders
-----------------------------------------------------------------------------------------------------------------------------
          Total                   3,990,000                        $  0.65                                 0
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

Description of Equity Compensation

      On January 29, 2002, the Company granted non-qualified options ("Options")
to purchase Three Million Nine Hundred Ninety Thousand (3,990,000) shares of
Common Stock at an exercise price of $0.65 to the following optionees:

<TABLE>
<CAPTION>
NAME OF OPTIONEE                 NUMBER OF SHARES UNDERLYING OPTIONS
----------------                 -----------------------------------
<S>                              <C>
Bill Jackson                               1,000,000
John Springsteen                             200,000
Chris Jackson                                300,000
Jawaharlal Gondi                           1,000,000
Tun Aye Sai                                  300,000
Mike McElwrath                               100,000
Larry Izzo                                    30,000
Ben Malek                                     30,000
Ramesh Kalluri                               150,000
Joe Cooper                                   600,000
Don Gunther                                  280,000
</TABLE>

         The Options are exercisable, in whole or in part, until January 29,
2009, and vest in five (5) equal allotments as follows:

(i)      Twenty percent (20%) of the Option Shares became exercisable on July
         29, 2002;

(ii)     Twenty percent (20%) of the Option Shares became exercisable on January
         29, 2003;

(iii)    Twenty percent (20%) of the Option Shares shall be exercisable on
         January 29, 2004;

(iv)     Twenty percent (20%) of the Option Shares shall be exercisable on
         January 29, 2005; and

(v)      Twenty percent (20%) of the Option Shares shall be exercisable on
         January 29, 2006.

                                       21

<PAGE>

            Also on January 29, 2002, the Company granted Options to purchase
One Million Four Hundred Fifty Thousand (1,450,000) shares of Common Stock at an
exercise price of $0.65 to the following optionees. However, because each of the
individuals below are no longer employed by the Company, their Options no longer
vest and they consequently own the following vested Options:

<TABLE>
<CAPTION>
                           Number Of Shares
                          Underlying Options        Number Of Shares       Number Of Shares
 Name of Optionee              Granted                   Vested            No Longer Vesting
-----------------         -------------------       ----------------       -----------------
<S>                       <C>                       <C>                    <C>
Bill Jackson                 1,000,000                   400,000                600,000
Chris Jackson                  300,000                   120,000                180,000
Ramesh Kalluri                 150,000                    60,000                 90,000
</TABLE>

Employment Agreements      Each of Mr. Gondi, Mr. Bill Jackson, Mr. Springsteen,
and Mr. Chris Jackson have entered into employment agreements with the Company.
Pursuant to these employment agreements, Mr. Gondi, Mr. Bill Jackson, Mr.
Springsteen, and Mr. Chris Jackson have agreed to devote both business and
professional time and efforts to our business as our Chief Executive Officer,
President/Chief Operating Officer, Chief Financial Officer, and Vice President
of Corporate Development, respectively. Each may be entitled to receive, at the
sole discretion of our board of directors or a committee thereof, bonuses based
on the achievement (in whole or in part) by the Company of our business plan and
achievement by the employee of fixed personal performance objectives.

Director Compensation

      The Company's directors are not compensated for any meeting of the board
of directors which they attend.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

         The following table sets forth certain information concerning the
ownership of the Company's Common Stock as of March 17, 2003, with respect to:
(i) each person known to the Company to be the beneficial owner of more than
five percent of the Company's Common Stock; (ii) all directors; and (iii)
directors and executive officers of the Company as a group. The number of shares
listed as beneficially owned in the following table reflect the forward stock
split of eighteen-for-one (18-for-1) of the Company's issued and outstanding
common stock which became effective on January 1, 2002. As of March 17, 2003,
there were 47,410,500 shares of Common Stock issued and outstanding.

<TABLE>
<CAPTION>
                                                              Amount and Nature
                         Name and Address of                    of Beneficial      Percent of
  Title of Class           Beneficial Owner                      Ownership(1)       Class (2)
-------------------------------------------------------------------------------------------------
                         Executive Officers and
                               Directors
-------------------------------------------------------------------------------------------------
<S>                      <C>                                  <C>                  <C>
Common Stock             Jawaharlal Gondi                       7,400,000 (4)         15.6%
($0.001 par value)       400 N. Sam Houston
                         Pkwy E. Suite 205
                         Houston, Texas 77060
</TABLE>

                                       22

<PAGE>

<TABLE>
-------------------------------------------------------------------------------------------------
<S>                      <C>                                  <C>                  <C>
Common Stock             Tun Aye Sai                            1,120,000 (5)          2.4%
($0.001 par value)       400 N. Sam Houston
                         Pkwy E. Suite 205
                         Houston, Texas 77060
-------------------------------------------------------------------------------------------------
Common Stock             Bill Jackson (former officer)          1,400,000 (6)          3.0%
($0.001 par value)       400 N. Sam Houston
                         Pkwy E. Suite 205
                         Houston, Texas 77060
-------------------------------------------------------------------------------------------------
Common Stock             Ramesh Kalluri (former officer)          210,000 (7)          < 1%
($0.001 par value)       400 N. Sam Houston
                         Pkwy E. Suite 205
                         Houston, Texas 77060
-------------------------------------------------------------------------------------------------
Common Stock             John Springsteen (former officer)        280,000 (8)          < 1%
($0.001 par value)       400 N. Sam Houston
                         Pkwy E. Suite 205
                         Houston, Texas 77060
-------------------------------------------------------------------------------------------------
Common Stock             Chris Jackson (former officer)           220,000 (9)          < 1%
($0.001 par value)       400 N. Sam Houston
                         Pkwy E. Suite 205
                         Houston, Texas 77060
-------------------------------------------------------------------------------------------------
Common Stock             Directors and Executive               10,630,000             22.4%
($0.001 par value)       Officers as a Group
                         (6 individuals)
</TABLE>

     (1) The number of shares and the percentage of the class beneficially owned
by the entities above is determined under rules promulgated by the SEC and the
information is not necessarily indicative of beneficial ownership for any other
purpose. Under such rules, beneficial ownership includes any shares as to which
the individual has sole or shared voting power or investment power and also any
shares which the individual has the right to acquire within 60 days through the
exercise of any stock option or other right. The inclusion herein of such
shares, however, does not constitute an admission that the named stockholder is
a direct or indirect beneficial owner of such shares. Unless otherwise
indicated, each person or entity named in the table has sole voting power and
investment power (or shares such power with his or her spouse) with respect to
all shares of capital stock listed as beneficially owned by such person or
entity.

     (2) Percentages are based upon the total 47,410,500 outstanding shares
of Common Stock combined with the number of shares of Common Stock beneficially
owned by each person or entity.

     (3) Includes 400,000 shares which underlie non-qualified options which may
currently be exercised.

     (4) Includes 4,000,000 shares of Common Stock owned by the Arthi Trust of
which he is the principal beneficial owner of 100% of the voting stock, and
400,000 shares which underlie non-qualified options which may currently be
exercised.

     (5) Includes 120,000 shares which underlie non-qualified options which may
currently be exercised.

     (6) Includes 60,000 shares which underlie non-qualified options which may
currently be exercised.

     (7) Includes 80,000 shares which underlie non-qualified options which may
currently be exercised.

     (8) Includes 120,000 shares which underlie non-qualified options which may
currently be exercised.

                                       23

<PAGE>

The following table sets forth certain information concerning the ownership of
the Company's Common Stock as of December 11, 2003, with respect to: (i) each
person known to the Company to be the beneficial owner of more than five percent
of the Company's Common Stock; (ii) all directors; and (iii) directors and
executive officers of the Company as a group. The number of shares listed as
beneficially owned in the following table reflect the forward stock split of
eighteen-for-one (18-for-1) of the Company's issued and outstanding common stock
which became effective on January 1, 2002. As of December 11, 2003, there were
56,056,461 shares of Common Stock issued and outstanding.

<TABLE>
<CAPTION>
                                                         Amount and Nature
                         Name and Address of               of Beneficial      Percent of
  Title of Class          Beneficial Owner                  Ownership(1)       Class (2)
--------------------------------------------------------------------------------------------
                         Executive Officers and
                               Directors
--------------------------------------------------------------------------------------------
<S>                      <C>                             <C>                  <C>
Common Stock             Michael McElwrath                   300,100 (3)          < 1%
($0.001 par value)       400 N. Sam Houston
                         Pkwy E. Suite 205
                         Houston, Texas 77060
--------------------------------------------------------------------------------------------
Common Stock             Mark Schaftlein                           0              n/a
($0.001 par value)       400 N. Sam Houston
                         Pkwy E. Suite 205
                         Houston, Texas 77060
--------------------------------------------------------------------------------------------
Common Stock             Jawaharlal Gondi                  7,400,000 (4)         13.2%
($0.001 par value)       400 N. Sam Houston
                         Pkwy E. Suite 205
                         Houston, Texas 77060
--------------------------------------------------------------------------------------------
Common Stock             Tun Aye Sai                       1,120,000 (5)          1.9%
($0.001 par value)       400 N. Sam Houston
                         Pkwy E. Suite 205
                         Houston, Texas 77060
--------------------------------------------------------------------------------------------
Common Stock             Directors and Executive           8,820,100             15.7%
($0.001 par value)       Officers as a Group
                         (4 individuals)
</TABLE>

     (1) The number of shares and the percentage of the class beneficially owned
by the entities above is determined under rules promulgated by the SEC and the
information is not necessarily indicative of beneficial ownership for any other
purpose. Under such rules, beneficial ownership includes any shares as to which
the individual has sole or shared voting power or investment power and also any
shares which the individual has the right to acquire within 60 days through the
exercise of any stock option or other right. The inclusion herein of such
shares, however, does not constitute an admission that the named stockholder is
a direct or indirect beneficial owner of such shares. Unless otherwise
indicated, each person or entity named in the table has sole voting power and
investment power (or shares such power with his or her spouse) with respect to
all shares of capital stock listed as beneficially owned by such person or
entity.

                                       24

<PAGE>

      (2) Percentages are based upon the total 56,056,461 outstanding shares of
Common Stock combined with the number of shares of Common Stock beneficially
owned by each person or entity.

      (3) Includes 300,000 shares which underlie non-qualified options which may
currently be exercised.

     (4) Includes 4,000,000 shares of Common Stock owned by the Arthi Trust of
which he is the principal beneficial owner of 100% of the voting stock, and
400,000 shares which underlie non-qualified options which may currently be
exercised.

     (5) Includes 120,000 shares which underlie non-qualified options which may
currently be exercised.

     (6) Includes 400,000 shares which underlie non-qualified options which may
currently be exercised.

     (7) Includes 60,000 shares which underlie non-qualified options which may
currently be exercised.

     (8) Includes 80,000 shares which underlie non-qualified options which may
currently be exercised.

     (9) Includes 120,000 shares which underlie non-qualified options which may
currently be exercised.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The Company formerly sublet its office space in Houston, from December
31, 2001, through May 22, 2003, from a related party.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits. Exhibits required to be attached by Item 601 of Regulation
S-B are listed in the Index to Exhibits beginning on page 21 of this Form
10-KSB, which is incorporated herein by reference.

     (b) No reports on Form 8-K were filed on the Company's behalf during the
quarter ended December 31, 2002.

     (c) A Form 8-K was filed on January 13, 2003 regarding the Ministry of
Foreign Trade and Economic Co-operation's ratification and approval of the
Production Sharing Contract with the China United Coal Bed Methane Corporation
concerning the Enhong and Laochang areas.

     (d) A Form 8-K was filed on January 15, 2003 regarding the acquisition of
assets resulting from the merger of the Company's wholly owned subsidiary, Far
East Montana, Inc. with Newark Valley Oil & Gas, Inc.

ITEM 14. CONTROLS AND PROCEDURES

         As of March 31, 2003, the conclusions of the Company's principal
executive officer and principal financial officer regarding the effectiveness of
the Company's disclosure controls and procedures as of December 31, 2002 were as
follows:

         Within the 90 days prior to the date of this report, the Company
carried out an evaluation, under the supervision and with the participation of
the Company's management, including the Company's Chief Executive Officer and
the person performing functions similar to that of a Chief Financial Officer of
the Company, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based
upon the evaluation, the Company's Chief Executive Officer and the person
performing functions similar to that of a Chief Financial Officer of the Company
concluded that the Company's disclosure controls are effective in timely
alerting them to material information relating to the Company (including its
consolidated subsidiaries) required to be included in the Company's periodic SEC
filings. There have been no significant changes in the Company's internal
controls or in other factors which could aignificantly affect internal controls
subsequent to the date the Company conducted its evaluation.

                                       25

<PAGE>

         However, as of December 12, 2003, the conclusions of the Company's
principal executive officer and principal financial officer regarding the
effectiveness of the Company's disclosure controls and procedures as of
September 30, 2003 were as follows:

         The newly elected chief executive officer and newly appointed interim
chief accounting officer have reviewed the effectiveness of the Company's
disclosure controls and internal controls and procedures as of September 30,
2003. These officers identified a weakness related to disclosure controls and
procedures. These officers plan to correct these controls and procedures to
assure compliance with the certification required by Exhibit 31 of this report.
This weakness includes the absence, at present, of a disclosure controls
checklist. The certifying officers, working with the Company's auditors, have
determined that the Company currently lacks the properly designed internal
controls over financial disclosure reporting and is working with the auditors to
correct identified weaknesses in the fourth quarter.

         The current disclosure controls and internal controls were designed and
implemented before either the new CEO or new interim CAO were employed by the
Company. Since September 30, 2003, the Company retained a new CEO on October 13,
2003, and new interim CAO on November 10, 2003. The newly appointed interim CAO
and new CEO have communicated with the Company's independent auditors regarding
the adequacy of disclosure controls and internal controls to redesign the
disclosure controls and internal controls system. The prior CEO and CAO reported
on their design and implementation of disclosure controls as of a date within 90
days of June 30, 2003. The new CEO and new interim CAO intend to redesign both
the disclosure controls and the internal controls over financial disclosure
reporting, or cause such disclosure controls and internal controls over
financial reporting to be redesigned under their supervision, to provide
reasonable assurance regarding the adequacy of disclosure of material
information and the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles. The Company's management expects that their review, to be
completed during the fourth quarter of 2003, will significantly improve the
disclosure and internal control systems.

         The new CEO and new interim CAO expect that they may need to make
changes in disclosure controls and internal controls over financial reporting,
but since September 30, 2003, they have not identified, as yet, the changes that
may need to be made except as described above.

                                       26

<PAGE>

                                   SIGNATURES

      In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, this 23rd day of December 2003.

                                                    Far East Energy Corporation

                                                   /s/ Michael R. McElwrath
                                                   -----------------------------
                                                   Michael R. McElwrath,
                                                   Chief Executive Officer,
                                                   President and Chairman of the
                                                   Board of Directors

     In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.

Signature                           Title                           Date

/s/ Michael R. McElwrath    Chief Executive Officer,           December 23, 2003
------------------------    President & Chairman of the
Michael R. McElwrath        Board of Directors


-----------------------
Jawaharlal Gondi            Director                           December 23, 2003

/s/ Tun Aye Sai
-----------------------
Tun Aye Sai                 Director of China Operations       December 23, 2003
                            and Director

/s/ Mark Schaftlein
-----------------------
Mark Schaftlein             Chief Financial Officer            December 23, 2003

                                       27

<PAGE>

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT            PAGE
  NO.               NO.                     DESCRIPTION
--------          -----                     -----------
<S>               <C>         <C>
3(i)              *           Articles of Incorporation of the Company.

3(ii)             *           Bylaws of the Company.

10(i)             *           A December 31, 2002, Plan of Merger by and between Far
                              East Montana, Inc. and Newark Valley Oil & Gas, Inc.

21                29          Subsidiaries of the Company.

31(i)             30          302 Certification of Chief Executive Officer

31(ii)            31          302 Certification of Chief Financial Officer

32(i)             32          906 Certification of Chief Executive Officer

32(ii)            33          906 Certification of Chief Financial Officer
</TABLE>

* Previously filed as indicated and incorporated herein by reference from the
referenced filings previously made by the Company.

                                       28

<PAGE>

                                                                      EXHIBIT 21

                              LIST OF SUBSIDIARIES
                                       OF
                           FAR EAST ENERGY CORPORATION

1. Newark Valley Oil & Gas, Inc. was incorporated in the state of Nevada.

2. Far East Energy (BVI), Inc. was incorporated in the territory of the British
   Virgin Islands.

                                       29

<PAGE>

                                                                   EXHIBIT 31(i)

                                  CERTIFICATION

     I, Michael R. McElwrath, Chief Executive Officer, certify that:

(1)      I have reviewed this Form 10-KSB of Far East Energy Corporation;

(2)      Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;

(3)      Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the small business
issuer as of, and for, the periods presented in this report;

(4)      The small business issuer's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the small business issuer and have:

         (a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the small business issuer,
including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being
prepared;

         (b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;

         (c) Evaluated the effectiveness of the small business issuer's
disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and

         (d) Disclosed in this report any change in the small business issuer's
internal control over financial reporting that occurred during the small
business issuer's most recent fiscal quarter (the small business issuer's fourth
fiscal quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the small business issuer's internal
control over financial reporting; and

(5)      The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer's board of directors (or persons
performing the equivalent functions):

         (a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are reasonably
likely to adversely affect the small business issuer's ability to record,
process, summarize and report financial information; and

         (b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the small business issuer's
internal control over financial reporting.

Date: December 23, 2003

/s/ Michael R. McElwrath
-------------------------
Michael R. McElwrath,
Chief Executive Officer

                                       30


<PAGE>

                                                                  EXHIBIT 31(ii)

                                  CERTIFICATION

     I, Mark Schaftlein, Chief Financial Officer, certify that:

(1)      I have reviewed this Form 10-KSB of Far East Energy Corporation;

(2)      Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;

(3)      Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the small business
issuer as of, and for, the periods presented in this report;

(4)      The small business issuer's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the small business issuer and have:

         (a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the small business issuer,
including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being
prepared;

         (b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;

         (c) Evaluated the effectiveness of the small business issuer's
disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and

         (d) Disclosed in this report any change in the small business issuer's
internal control over financial reporting that occurred during the small
business issuer's most recent fiscal quarter (the small business issuer's fourth
fiscal quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the small business issuer's internal
control over financial reporting; and

(5)      The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer's board of directors (or persons
performing the equivalent functions):

         (a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are reasonably
likely to adversely affect the small business issuer's ability to record,
process, summarize and report financial information; and

         (b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the small business issuer's
internal control over financial reporting.

Date: December 23, 2003

/s/ Mark Schaftlein
----------------------------------------
Mark Schaftlein, Chief Financial Officer

                                       31


<PAGE>

                                                                   EXHIBIT 32(i)

                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

      In connection with the annual report on Form 10-KSB of Far East Energy
Corporation (the "Company") for the period ended December 31, 2002 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), the
undersigned, Michael R. McElwrath, the Chief Executive Officer of the Company,
hereby certifies, pursuant to 18 U.S.C. section 1350, that:

      (1) the Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

      (2) the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.

Dated: December 23, 2003

/s/ Michael R. McElwrath
---------------------------------------------
Michael R. McElwrath, Chief Executive Officer

                                       32

<PAGE>

                                                                  EXHIBIT 32(ii)

                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

      In connection with the annual report on Form 10-KSB of Far East Energy
Corporation (the "Company") for the period ended December 31, 2002 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), the
undersigned, Mark Schaftlein, Chief Financial Officer of the Company, hereby
certifies, pursuant to 18 U.S.C. section 1350, that:

      (1) the Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

      (2) the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.

Dated: December 23, 2003

/s/ Mark Schaftlein
----------------------------------------
Mark Schaftlein, Chief Financial Officer

                                       33