Exhibit
10.64





FAR
EAST ENERGY CORPORATION





SECOND
AMENDED AND RESTATED


NONQUALIFIED
STOCK OPTION AGREEMENT





Far East Energy Corporation (the "Corporation")
and Michael R. McElwrath ("Participant")
hereby agree to amend and restate the stock option agreement previously entered
into between the Company and Participant on January 29, 2002, as superseded by
the December 23, 2004 amended and restated option agreement (the "Amended Option Agreement").  This
amendment and restatement is made solely with respect to those Options which
vested after December 31, 2004 and the terms of the Amended Option Agreement
shall remain in effect with respect to all Options that vested prior to January
1, 2005.





General
Information





Name:
            Michael
      R. McElwrathAward
      Date:
            January
      29, 2002Number
      of Shares
              Covered
      by  Agreement:
            40,000Exercise
      Price:
            $0.65Expiration
      Dates:
            December
      31, 2008

















FAR
EAST ENERGY CORPORATION


SECOND
AMENDED AND RESTATED


NONQUALIFIED
STOCK OPTION AGREEMENT








THIS SECOND AMENDED AND RESTATED
NONQUALIFIED STOCK OPTION AGREEMENT (this "Agreement") is made as of this
27th day of December, 2007, by and between Far East Energy Corporation, a Nevada
corporation (the "Corporation"), and Michael R.
McElwrath ("Participant").





WHEREAS, the Corporation and
the Participant previously entered into a Stock Option Agreement (the "Original Option Agreement")
dated as of January 29, 2002 (the "Award Date") setting forth the
grant of options to purchase 100,000 shares of common stock, par value $0.001
per share, of the Corporation (the "Common Stock") at an exercise
price per share of $0.65;





WHEREAS, the Corporation and
the Participant subsequently entered into an Amended and Restated Nonqualified
Stock Option Agreement (the "Amended Option Agreement")
dated December 23, 2004, which amended, restated and superseded the Original
Option Agreement;





WHEREAS, the Participant has
entered into an Amended and Restated Employment Agreement (as amended, restated
and modified from time to time, the "Employment Agreement") dated
December 23, 2004 with the Corporation;





WHEREAS, the Corporation and
Participant acknowledge that of the 100,000 options granted under the Original
Option Agreement, 60,000 options vested on or before December 31, 2004, and that
40,000 options vested on or after January 1, 2005 (the "Affected
Options");





WHEREAS, the terms of the
60,000 options vested prior to December 31, 2004 shall remain unmodified and are
governed in their entirety by the Amended Option Agreement;





WHEREAS, the Participant
understands that the 40,000 Affected Options are discounted options subject to
Section 409A ("Section
409A") of the U.S. Internal Revenue Service Code of 1986, as amended (the
"Code") and that in
order to avoid the adverse tax consequences thereunder the Affected Options must
be brought into compliance with Section 409A;





WHEREAS, the Corporation and
Participant have elected to bring the Affected Options into compliance by
establishing a payment schedule that complies with Section 409A such that the
Affected Options will become exercisable January 2, 2008 and any Affected
Options which have not been exercised by December 31, 2008 shall be
automatically forfeited; and





WHEREAS, by executing this
Agreement, the Corporation and Participant desire to amend, replace and
supersede the Amended Option Agreement  with respect to the Affected
Options.





NOW, THEREFORE, in
consideration of the foregoing, of the mutual promises hereinafter set forth and
of such other good and valuable consideration, the receipt, adequacy and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, do hereby agree as follows:





1.           Grant of Options; Defined
Terms.





A.           Capitalized
terms used herein without definition shall have the meaning ascribed to such
terms in the Employment Agreement.





B.           Participant
hereby (i) releases and surrenders to the Corporation 40,000 shares of 100,000
shares of Common Stock subject to the Original Option Agreement and (ii)
acknowledges and agrees that the from and after the date hereof the Original
Option Agreement shall represent an option to purchase, subject to the terms and
conditions of the Original Option Agreement, 60,000 shares of Common Stock and
that Participant.  Except as provided in this Section 1(B), the terms
and conditions of the Original Option Agreement shall remain in full force and
effect.





C.           Subject
to the terms and conditions hereinafter set forth, the Corporation, with the
approval and at the direction of the Compensation Committee of the Board of
Directors (the "Committee"), and the
Participant hereby acknowledges and agrees that the Corporation granted to
Participant, as of the Award Date, an option to purchase the following in
accordance with the terms of the Original Option Agreement which was
subsequently superseded by the Amended Option Agreement and as are now covered
by this Agreement:





(a)           The
Affected Option and the shares of Common Stock purchasable upon exercise of the
Affected Option at an “Exercise  Price” of U.S.$0.65 per
share.





To comply with Section 409A the
Affected Options shall be exercisable on a fixed date, January 2, 2008 and any
Affected Options that are not exercised before January 1, 2009 shall
automatically forfeit.





Each Affected Option is intended by the
parties hereto to be, and shall be treated as, a nonqualified stock option (as
such term is defined under Section 422 of the Code.





D.           As
of the date of this Agreement, the Affected Options are fully (100%)
vested.





2.           Termination
of Options.  The Affected
Option and all rights hereunder with respect thereto, to the extent such rights
shall not have been exercised, shall terminate and become null and void after
December 31, 2008 (the "Option
Term").





3.           Exercise of
Options.





A.           Participant
may exercise the Affected Options with respect to all or any part of the number
of Shares then exercisable hereunder by giving the Secretary of the Corporation
written notice of intent to exercise.  The notice of exercise shall
specify the number of Shares as to which Participant is exercising and the date
of exercise thereof, which date shall be not less than five (5) days after the
giving of such notice (unless an earlier time shall have been mutually agreed
upon in writing).  All or any portion of the vested portion of the
Affected Option may be exercised by Participant on the date set forth in Section
1(B).





B.           Notwithstanding
anything contained in this Article 3 to the contrary, each Affected Option may
be exercised only in compliance with all applicable securities laws and only by
(i) Participant’s completion, execution and delivery to the Corporation of a
notice of exercise and, if required by the Corporation, an "investment letter"
as supplied by the Corporation and (ii) the payment to the Corporation, as
provided in Article 3D hereof, of an amount equal to the amount obtained by
multiplying the Exercise Price of such Affected Option by the number of Shares
being purchased pursuant to such exercise as shall be specified by Participant
in such notice of exercise.  Except as otherwise provided in the
Employment Agreement, Participant shall not sell, transfer, assign, pledge for a
loan, margin, hypothecate or exchange any Affected Option or the Shares until
April 1, 2005, except pursuant to the laws of descent and except that
Participant's estate, executors or administrators, or personal or legal
representatives may exercise any Affected Option in accordance with the terms of
Article 3C hereof in the event of the death or Disability of
Participant.





C.           Within
three years following Participant’s termination of employment, Participant or
Participant’s estate, executors or administrators, or personal or legal
representatives, as the case may be, shall be entitled to exercise any Affected
Options  that are or become exercisable within three years following
Participant's termination of employment (but not beyond any Option Term) and all
such Affected Options not exercised within such three year period shall be
forfeited.  Any person, other than Participant, so desiring to
exercise Participant's Affected Options shall be required, as a condition to the
exercise of the Affected Options, to furnish to the Corporation such
documentation as the Corporation shall deem satisfactory to evidence the
authority of such person to exercise the Affected Options on behalf of
Participant.  In the event of the exercise of such Affected Options by
Participant's estate, executors or administrators, or personal or legal
representatives, all references herein to Participant shall, to the extent
applicable, be deemed to refer to and include such estate, executors or
administrators, or personal or legal representatives, as the case may
be.





D.           Each
Exercise Price shall be paid in full by Participant for the Shares purchased on
or before the exercise date specified in the notice of exercise, at
Participant's option, in one or a combination of the following
methods:  (i) in cash or by electronic funds transfer; (ii) by check
payable to the order of the Corporation; (iii) if authorized by the Board of
Directors of the Corporation (the "Board"), or the Committee, by
a promissory note of the Participant; (iv) by notice and third party payment in
such manner as may be authorized by the Board or the Committee; (v) by the
delivery of shares of Common Stock of the Corporation already owned by the
Participant; or (vi) pursuant to a "cashless exercise" procedure (the "Cashless Exercise Right")
pursuant to which the Participant shall surrender to the Corporation such
Affected Option and a notice of exercise, duly completed and executed by the
Participant to evidence the exercise of the Cashless Exercise Right by
authorizing the Corporation to withhold from issuance a number of Shares
issuable upon such exercise of such Affected Option which, when multiplied by
the Fair Market Value (as defined below) of such Shares, is equal to the
aggregate Exercise Price of such Affected Option (and such withheld Shares shall
no longer be issuable under such Affected Option).  Shares of Common
Stock used to satisfy the Exercise Price of an Affected Option shall be valued
at their Fair Market Value on the date of exercise.





E.           The
"Fair Market Value"
shall be determined as follows:





(a)  if
the security at issue is listed on a national securities exchange or admitted to
unlisted trading privileges on such an exchange or quoted on either the National
Market System or the Small Cap Market of the automated quotation service
operated by The Nasdaq Stock Market, Inc., the Fair Market Value shall be the
last reported sale price of that security on such exchange or system on the day
for which the Fair Market Value is to be determined or, if no such sale is made
on such day, the average of the highest closing bid and lowest asked price for
such day on such exchange or system; or





(b)  if
the security at issue is not so listed or quoted or admitted to unlisted trading
privileges, the Fair Market Value shall be the average of the last reported
highest bid and lowest asked prices quoted on the Electronic Bulletin Board
operated by The Nasdaq Stock Market, Inc., or, if not so quoted, then by the
National Quotation Bureau, Inc. on the last business day prior to the day for
which the Fair Market Value is to be determined; or





(c)  if
the security at issue is not so listed or quoted or admitted to unlisted trading
privileges and bid and asked prices are not reported, the Fair Market Value
shall be determined in such reasonable manner as may be prescribed from time to
time by the Board.





F.           Upon
the exercise of all or any portion of an Affected Option by Participant, or as
soon thereafter as is practicable, the Corporation shall issue and deliver to
Participant (or to any broker or, if acceptable to the Corporation, to any other
person designated by Participant) a certificate or certificates evidencing such
number of Shares as Participant has elected to purchase.  Such
certificate or certificates shall be registered in the name of Participant (or
the designated broker or other person) and, if applicable, shall bear an
appropriate investment warranty legend, any legend required by an applicable
securities law, rule or regulation and, if applicable, a legend referring to the
restrictions provided hereunder and under the Employment Agreement and any
legend required by applicable law.  Upon the exercise of an Affected
Option and the issuance and delivery of such certificate or certificates,
Participant (or the person to whom such stock certificates are registered) shall
have all the rights of a stockholder with respect to such Shares and to receive
all dividends or other distributions paid or made with respect
thereto.  In the event that the capital stock of the Corporation is
converted in whole or in part into securities of any other entity, a
determination as to whether the securities of the other entity so received (if
any) shall be subject to the restrictions set forth in this Agreement shall be
made solely by the other entity.





4.           Rights
Prior to Exercise.  Participant shall
have no equity interest in the Corporation or any voting, dividend, liquidation
or dissolution rights with respect to any capital stock of the Corporation
solely by reason of having an Affected Option or having executed this
Agreement.  Prior to the exercise of all or a portion of the Affected
Options, as set forth in Article 3A hereof, and the issuance and delivery of a
certificate or certificates evidencing the Shares purchased pursuant to the
exercise of all or a portion of such Affected Options, Participant shall have no
interest in, or any voting, dividend, liquidation or dissolution rights with
respect to, the Shares, except to the extent that Participant has exercised all
or a portion of such Affected Options and has been issued and received delivery
of a certificate or certificates evidencing the Shares purchased pursuant to
such exercise.





5.           Adjustment
of Purchase and Number of Shares.





A.           Adjustment.  The
number and kind of securities purchasable upon the exercise of an Affected
Option and the Exercise Price of such Affected Option shall be subject to
adjustment from time to time upon the happening of certain events as
follows:





(a)           Reclassification,
Consolidation or Merger.  At any time while the Affected Option
remains outstanding and unexpired, in case of (i) any reclassification or change
of outstanding securities issuable upon exercise of this Affected Option (other
than a change in par value, or from par value to no par value per share, or from
no par value per share to par value or as a result of a subdivision or
combination of outstanding securities issuable upon the exercise of this
Affected Option), (ii) any consolidation or merger of the Corporation with or
into another corporation (other than a merger with another corporation in which
the Corporation is a continuing corporation and which does not result in any
reclassification or change, other than a change in par value, or from par value
to no par value per share, or from no par value per share to par value, or as a
result of a subdivision or combination of outstanding securities issuable upon
the exercise of this Affected Option), or (iii) any sale or transfer to another
corporation of the property of the Corporation as an entirety or substantially
as an entirety, the Corporation, or such successor or purchasing corporation, as
the case may be, shall without payment of any additional consideration
therefore, execute new Affected Option providing that the holder of this
Affected Option shall have the right to exercise such new Affected Option (upon
terms not less favorable to the holder than those then applicable to this
Affected Option and to receive upon such exercise, in lieu of each share of
Common Stock theretofore issuable upon exercise of the Affected Option, the kind
and amount of shares of stock, other securities, money or property receivable
upon such reclassification, change, consolidation, merger, sale or
transfer.  Such new Affected Option shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 5A.  The provisions of this Section 5A(a)
shall similarly apply to successive reclassifications, changes, consolidations,
mergers, sales and transfers.





(b)           Subdivision or Combination
of Shares.  If the Corporation at any time while the Affected
Option remains outstanding and unexpired, shall subdivide or combine its capital
stock, the Exercise Price of such Affected Option shall be proportionately
reduced, in case of subdivision of such shares as of the effective date of such
subdivision, or, if the Corporation shall take a record of holders of its
capital stock for the purpose of so subdividing, as of such record date,
whichever is earlier, or shall be proportionately increased, in the case of
combination of such shares, as of the effective date of such combination, or, if
the Corporation shall take a record of holders of its capital stock for the
purpose of so combining, as of such record date,  whichever is
earlier.





(c)           Stock
Dividends.  If the Corporation at any time which an Option is
outstanding and unexpired shall pay a dividend in shares of, or make other
distribution of shares of, its capital stock, then the Exercise Price of such
Option shall be adjusted, as of the date the Corporation shall take a record of
the holders of its capital stock for the purpose of receiving such dividend or
other distribution (or if no such record is taken, as at the date of such
payment or other distribution), to that price determined by multiplying the
Exercise Price of such Option in effect immediately prior to such payment or
other distribution by a fraction (i) the numerator of which shall be the total
number of shares of capital stock outstanding immediately prior to such dividend
or distribution, and (ii) the denominator of which shall be the total number of
shares of capital stock outstanding immediately after such dividend or
distribution.  The provisions of this Section 5A(c) shall not apply
under any of the circumstances for which an adjustment is provided in Section
5A(a) or 5A(b).





(d)           Liquidating Dividends,
Etc.  If the Corporation at any time while this Affected Option
is outstanding and unexpired makes a distribution of its assets to the holders
of its capital stock as a dividend in liquidation or by way of return of capital
or other than as a dividend payable out of earnings or surplus legally available
for dividends under applicable law or any distribution to such holders made in
respect of the sale of all or substantially all of the Corporation’s assets
(other than under the circumstances provided for in the Sections 5A(a) through
(c)), the holder of such Affected Option shall be entitled to receive upon the
exercise hereof, in addition to the shares of Common Stock receivable upon such
exercise, and without payment of any consideration other than the Exercise Price
of such Option, an amount in cash equal to the value of such distribution per
share of Common Stock multiplied by the number of shares of Common Stock which,
on the record date for such distribution, are issuable upon exercise of this
Affected Option (with no further adjustment being made following any event which
causes a subsequent adjustment in the number of shares of Common Stock issuable
upon the exercise hereof ), and an appropriate provision therefor should be made
a part of any such distribution.  The value of a distribution which is
paid in other than cash shall be determined in good faith by the
Board.





B.           Notice of
Adjustments.   Whenever any of the Exercise Price of an
Affected Option or the number of shares of Common Stock purchasable under the
terms of such Affected Option at that Exercise Price shall be adjusted pursuant
to Section 5A hereof, the Corporation shall promptly make a certificate signed
by its Chief Executive Officer, President or a Vice President and by its
Treasurer or Assistant Treasurer or its Secretary or Assistant Secretary,
setting forth in reasonable detail the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated
(including a description of the basis upon which the Board made any
determination hereunder), and the Exercise Price and number of shares of Common
Stock purchasable at that Exercise Price after giving effect to such adjustment,
and shall promptly cause copies of such certificate to be mailed (by First Class
and Postage Prepaid) to the registered holder of such Affected
Option.





6.           Headings.   The
headings and other captions contained in this Agreement are for convenience of
reference only, and shall not be used in interpreting, construing or enforcing
any of the provisions of this Agreement.





7.           Entire
Agreement.  This Agreement,
together with the Employment Agreement, sets forth all of the promises,
agreements, conditions, understandings, warranties and representations between
the parties hereto with respect to the Affected Options, and there are no
promises, agreements, conditions, understandings, warranties or representations,
oral or written, express or implied, between them with respect to the Affected
Options other than as set forth herein and in the Employment
Agreement.  Any and all prior agreements between the parties hereto
with respect to any stock acquisition rights regarding the Affected Options are
hereby revoked.  This Agreement, together with the Employment
Agreement, is, and is intended by the parties to be, an integration of any and
all prior agreements or understandings, oral or written, with respect to the
Affected Options and the Shares.





8.           Notices.   Any and all
notices provided for herein shall be sufficient if in writing, and sent by hand
delivery, by an overnight delivery service that produces a signed receipt
evidencing delivery or by certified or registered mail (return receipt requested
and first class postage prepaid), in the case of the Corporation, to its
principal office, and in the case of Participant, to Participant's address as
shown on the Corporation's records.





9.           Invalid
or Unenforceable Provisions.   The
provisions of this Agreement shall be deemed severable, and the invalidity or
unenforceability of any one or more of the provisions hereof shall not affect
the validity and enforceability of the other provisions
hereof.  Participant agrees that the breach or alleged breach by the
Corporation of (a) any covenant contained in another agreement (if any) between
the Corporation and Participant or (b) any obligation owed to Participant by the
Corporation, shall not affect the validity or enforceability of the covenants
and agreements of Participant set forth herein.





10.           Modifications.No change
or modification of this Agreement shall be valid unless the same is in writing
and signed by the parties hereto; provided, however, that
Participant hereby covenants and agrees to execute any amendment to this
Agreement which shall be required or desirable (in the opinion of the
Corporation or its counsel) in order to comply with any rule or regulation
promulgated or proposed under the Code by the Internal Revenue
Service.





11.           Incorporation
of Employment Agreement by Reference.The Options
granted under the Original Option Agreement were granted pursuant to the terms
of the Employment Agreement, the terms of which are incorporated therein by
reference, however, notwithstanding the forgoing, for purposes of complying with
Section 409A the provisions of this Agreement shall control with respect to the
Affected Options.





12.           Governing
Law.  The validity,
construction, interpretation and effect of this Agreement shall exclusively be
governed by and determined in accordance with the laws of Texas (other than the
conflicts-of-law or choice-of-law rules thereof), except to the extent preempted
by federal law, which solely to the extent of such preemption shall
govern.  Venue shall lie only in the State and Federal Courts in and
for the County of Harris, Texas, as to all disputes arising under this
Agreement, and such venue is hereby consented to by the Corporation and
Participant.





13.           Counterparts.This Agreement
may be executed in counterparts, each of which, when taken together, shall
constitute one original agreement.





14.           Amendment
and Restatement.  This Agreement
constitutes an amendment, modification and restatement of the Amended and
Restated Option Agreement.  This Agreement contains the entire
understanding between the parties hereto with respect to the Affected Options
and supersedes the Amended and Restated Option Agreement with respect to such
Affected Options.





[SIGNATURE
PAGE FOLLOWS]








IN WITNESS WHEREOF, the
Corporation has caused its duly authorized officer to execute and attest to this
Agreement, and to apply the corporate seal hereto, and Participant has placed
his or her signature hereon, effective as of the date first written
above.





CORPORATION:





FAR
EAST ENERGY CORPORATION








By: /s/ Randall D.
Keys


Randall D. Keys, Chief Financial Officer








PARTICIPANT:








By: /s/ Michael R.
McElwrath


Michael R. McElwrath